BUSINESS WITH PERSONALITY
ROLLS-ROYCE UNDER FRESH FSA ISSUES
Issue 1,261 Thursday 11 November 2010
IRISH BONDS
SHUNNED AS
WOES MOUNT
WORLD ECONOMY
▲
BY MARION DAKERS
IRELAND’S borrowing costs soared to
an 11-year high yesterday on worries
the country is on the brink of asking
for a Greek-style bailout from the EU
or the International Monetary Fund
(IMF).
The Irish central bank governor also
admitted yesterday that the enor-
mous bank rescue had failed to reas-
sure investors and that struggling
Irish institutions might be better off
in foreign hands.
Growing alarm at Ireland’s poten-
tial bankruptcy sent benchmark 10-
year yields up by more than half a
percentage point to 8.64 per cent, the
highest level since 1999, while the
country’s spread over benchmark
German bonds soared to 6.22 per-
centage points, which represents an
all-time high.
European clearing house
LCH.Clearnet made it more expensive
to trade Irish debt due to the threat of
sovereign default, hiking the margin
required by 15 per cent of net expo-
sure.
The EU’s top monetary official Olli
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Rehn has said that while Ireland had troubled assets from banks including
not requested any financial aid, the Allied Irish and Bank of Ireland had
premium investors are demanding to helped build confidence in the coun-
hold Irish bonds rather than German try’s finances.
benchmarks has widened at the same “From a national point of view, the
breakneck speed as Greece’s spread entry of foreign purchasers for some
did shortly before it sought its bailout or all of the banks would help trans-
in May. fer both credit and liquidity risk to
Irish central bank governor Patrick those in a better position to bear
Honohan conceded in a speech yester- them,” he told the International
day “investors are not yet fully con- Financial Services Summit in Dublin.
vinced” that setting up the National He said the central bank would
Asset Management Agency to buy out help search for potential buyers, “as it
is clear that all will benefit from
ANALYSIS l Difference between greater market confidence in the
financial situation of the banks as in
Irish and German 10-year bond yields the sovereign”.
6 The Irish government hopes to pass
an emergency budget to save €6bn
6.175 (£5.13bn) in December, which has
5 10 Nov
already led to public protests.
However, Honohan said yesterday
4 the country will not alter its austerity
plans even if the country requires a
3 bailout. “My take would be the sort of
policy package the IMF would want to
2 see Ireland doing is very much the
sort of policy package that the gov-
ernment is putting together on the
10 Mar May Jul Sep Nov fiscal side,” Honohan told the confer-
ence yesterday.
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The National Union of Students condemned the chaos
Violence at student fees
demo leads to 35 arrests
POLITICS
▲
BY MARION DAKERS
HUNDREDS of protestors stormed the
Conservative party headquarters yes-
terday after a protest over university
tuition fees spiralled out of control,
leading to a total of 35 arrests.
The Metropolitan Police said last
night that 14 people had been taken
to hospital, including seven police
officers, for injuries picked up during
the protests in which 52,000 mostly
peaceful activists took to the streets
against a hike in fees and cuts to gov-
ernment spending on higher educa-
tion.
Around 200 people barricaded
themselves on the roof of Tory HQ on
Millbank after what the National
Union of Students described as a
group of rogue protestors smashed
SALARIES P3
FREE
Picture: PA
the glass front of the building, while
hundreds more built a bonfire made
from placards outside.
Mayor of London Boris Johnson
said police needed to examine how a
small minority had “shamefully
abused their right to protest”.
“This is intolerable and all those
involved will be pursued and they will
face the full force of the law,” he said.
“The Metropolitan Police commission-
er has assured me that there will be a
vigorous post-incident investigation.”
“We did not expect this level of vio-
lence,” Metropolitan Police commis-
sioner Sir Paul Stephenson said in a
TV interview later. “This was thug-
gish and loutish behaviour by crimi-
nals. It’s not acceptable, it is an
embarrassment for London and for
us.”
ALLISTER HEATH: P2
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 2 News
Why protesters need a reality check
EDITOR’S LETTER
ALLISTER HEATH
IT is a tragic day when the headquar-
ters of a political party in a democracy
are stormed by a lawless mob. That is
what happened yesterday to the Tory
HQ in Millbank; it almost happened at
the Liberal Democratic base in Cowley
Street. A minority of thugs in the
crowd – possibly professional agitators
of the sort that caused havoc at the
G20 meetings in 2009 – turned vio-
lent; regrettably, the police failed to
contain the violence properly, for rea-
sons which remain unclear but which
must urgently be investigated. The
authorities need to be better prepared
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Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Pictures Alex Ridley
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WHAT THE OTHER PAPERS SAY THIS MORNING
GREENSPAN WARNS OVER WEAKER
DOLLAR
The US is pursuing a policy of weak-
ening its currency which is driving
up exchange rates in the rest of the
world, according to Alan Greenspan,
the former chairman of the Federal
Reserve. Writing in today’s Financial
Times ahead of the G20 meeting in
Seoul, Greenspan argues that with
China also holding down the renmin-
bi, the upward pressure on currencies
elsewhere risks a return to wide-
spread trade protectionism.
WALL STREET TO SIDESTEP VOLCKER
RULE
Wall Street groups will continue to
invest billions of dollars in property
and companies in spite of new rules
aimed at curbing the bets banks
make with their capital, executives
say. US financial groups such as
Goldman Sachs, JPMorgan Chase and
to deal with this sort of thing in the
future and ensure that people and
property are adequately protected.
Student fees were first introduced
by the Labour government. The £3,290
the universities are allowed to charge
UK students ensures that virtually
every institution loses money on every
British student they accept. This
makes no sense: graduates earn
around £100,000 more over a lifetime
than non-graduates (and often much
more). The reforms to the original sys-
tem proposed by the present govern-
ment are hardly radical and include
numerous safeguards to help the poor
and those whose parents are from less
well-off backgrounds (crucially,
Labour’s fees didn’t discourage the
poor, with demand for places from
the less-well off continuing to rise).
Unfortunately, even fees of £9,000 a
year – the maximum allowed under
the reforms – won’t be enough to
allow the top UK universities to com-
pete globally with the likes of
Harvard, MIT and even now the best
Rolls-Royce hit
in safety blow
AVIATION
▲
BY PHILIP WALLER
EUROPEAN air regulators yesterday
said Airbus super-jumbos with Rolls-
Royce engines similar to the one that
failed last week were “unsafe
enough” to order compulsory checks
on the planes, dealing another blow
to the embattled jet engine maker.
The European Aviation Safety
Agency (EASA) ordered operators of
A380s with Trent 900 engines to
make inspections after a Trent 900 on
a Qantas jet flying to Australia partly
disintegrated in mid-air on Thursday.
An EASA spokesman said: “The
incident that occurred is considered
to be related to a potentially unsafe
condition in the engine.”
Rolls-Royce said it has been work-
ing with Airbus, airlines and safety
authorities to try to determine the
Morgan Stanley intend to take advan-
tage of a little-discussed aspect of the
Volcker rule to continue making
direct investments.
FIRST EASTERN FUND TARGETS UK
First Eastern Investment Group, a
Hong Kong-based private equity firm,
has launched a $500m fund to invest
in small and medium sized enterpris-
es in the uK and help them break into
the Chinese market. The fund was
launched yesterday in Beijing during
Prime Minister David Cameron’s offi-
cial visit.
BA SUFFERS SETBACK IN CABIN CREW
CLASH
British Airways’ attempt to reach a
settlement in its acrimonious dispute
with cabin crew has hit another
stumbling block after two branches
of the trade union involved said they
would not recommend the airline’s
latest offer to members. BA and the
Unite union last month reached a
tentative agreement.
Chinese universities. In this area, as in
others, the UK is in relative decline.
It would be nice if tens of billions of
pounds of free money could be con-
jured up out of thin air. As rational,
grown-up strategies for plugging the
budget deficit go, however, magic isn’t
exactly what most economists would
recommend. There is no such thing as
a free lunch, which is why hard choic-
es are now having to be made about
public spending. Reasonable people
can disagree about what the priorities
should be; but nobody can deny that
the government is spending close to
20 per cent more than it is collecting
in tax. Countries that go on like that
for too long eventually go bust.
Mindsets must change in Britain:
higher education needs to be seen as
an investment, not as an opportunity
to have a good time at taxpayers’
expense. That will mean that students
will have to face more of the costs –
and not merely enjoy the benefits – of
their education. It also means that
they will have to consider more care-
cause of the engine failure.
But one major airline, Dubai’s
Emirates, has called for a clear line of
communications from the UK manu-
facturer over the problem.
Emirates President Tim Clarke said
Rolls-Royce should be more open
about “what’s actually going on.”
So far the engine-maker has issued
just two brief statements. But a Rolls-
Royce spokesman said the company
would provide another update today.
EASA said early findings showed
that an oil fire in part of the engine
might be to blame.
Rolls-Royce CEO Sir
John Rose is under
pressure to tell airlines
what went wrong with
its Trent 900 engine
MACY’S SINGS PRAISES OF MADONNA
A clothing line for teenagers
launched in August by Madonna and
her 13-year-old daughter Lourdes is
helping to breathe new life into
Macy’s. The Material Girl line, which
recalls Madonna’s leather-and-lace
days of the 1980s, represents the
American department store’s attempt
to compete with outlets such as H&M.
BAE HAS SIGHTS ON CYBER WARFARE
AS MERGERS ARE RULED OUT
BAE Systems is to look for acquisi-
tions in high-growth areas such as
cyber warfare, but mega-mergers will
be off the agenda as defence cuts
loom. Ian King, chief executive of
Europe’s largest defence company,
said that the Pentagon had made
clear it did not want more consolida-
tion between the world’s largest
defence contractors because it would
reduce competition.
fully which degrees they wish to study.
In return, they will be able to behave
more like consumers, forcing the sys-
tem to evolve. There will be more two-
year degrees and more distance
learning; for-profit companies need to
enter the market, which is currently
controlled by charities. More innova-
tion and experimentation is needed.
Students should embrace, not fear,
the current, tentative moves towards
the commercialisation of higher edu-
cation. It is a shame yesterday’s pro-
testers couldn’t see this.
ECONOMIC HORROR STORY
If you like the sorts of arguments pre-
sented in this column, you will enjoy a
brilliant polemic on Channel Four at
9pm tonight. It is called Britain’s
Trillion Pound Horror Story and
makes the case that to put Britain
back on track we need to radically
rethink the role of the state, stop
politicians spending money in our
name and introduce a flat tax. It’s
great stuff. allister.heath@cityam.com
Carol Sergeant (inset) is one of the City’s most prominent women
Lloyds risk chief resigns
BANKING
▲
BY MARION DAKERS
LLOYDS Banking Group’s chief risk
officer Carol Sergeant is set to leave
the bank after almost seven years.
Sergeant, who joined the bank
from the Financial Services Authority
in 2003, said in a statement the move
comes at “the right time for me to
seek new challenges”.
She might seek a role at the top of
one of the new bodies created from
the break-up of the FSA, it was report-
PRIVATE DETECTIVES CHASE HP BOSS
The new chief executive of Hewlett-
Packard is being hunted by private
detectives, it has been claimed.
Investigators are said to have been
hired by software group Oracle to find
Leo Apotheker, who took charge at
Hewlett-Packard this month. Oracle is
attempting to serve Mr Apotheker
with a subpoena to testify in a court
case, in which it is fighting SAP, a rival
company that Apotheker formerly led.
ANGLIAN'S JONSON COX IS NEW UK
COAL CHAIRMAN
UK Coal, Britain’s largest coal miner,
has appointed Jonson Cox, the former
head of Anglian Water, as its new
executive chairman. The company
announced in July that David Jones
and Jon Lloyd will step down as chair-
man and chief executive, ahead of the
company being split into its coal
assets and property operations.
CITYA.M. 11 NOVEMBER 2010
NEWS | IN BRIEF
Cisco forecasts disappoint CEO
US technology firm Cisco Systems fore-
cast revenue far short of Wall Street’s
expectations yesterday, as it warned of
uncertain demand from Europe and
other markets, sending its shares tum-
bling 14 per cent. Chief executive John
Chambers said he was disappointed at
the revenue growth of nine to 12 per
cent forecast for the 2011 financial year,
well below the 13.1 per cent expected by
analysts. Chambers said growth in the
current quarter would be three to five
per cent.
Fed reveals more QE details
The Federal Reserve will buy about
$105bn (£65bn) of Treasuries and
Treasury inflation-protected securities in
18 operations from 12 November to 9
December as part of its next batch of
quantitative easing, the New York Fed
said last night. Around $75bn of this
sum is part of the new $600bn easing
programme announced last week, with
the remaining $30bn printed under a
previously announced scheme. The Fed
had already in August undertaken a pro-
gramme of Treasury and TIPS buying,
using funds from agency bonds.
Picture: REUTERS
ed last night.
“She has established an outstand-
ing risk leadership team and has
implemented industry-leading risk-
management standards and prac-
tices,” Chief executive officer Eric
Daniels said in a statement.
Her departure comes a week after
the bank announced that Santander
UK boss Antonio Horta-Osorio was
moving to Lloyds to become its chief
executive.
The bank said in a statement it will
now look for Sergeant’s replacement.
EU MINISTERS, PARLIAMENT TO
NEGOTIATE BUDGET INCREASE
European budget ministers will meet
representatives from the European
Parliament in Brussels on Thursday
to try and reach an agreement on
next year’s EU budget. The council,
which comprises budget ministers
from the bloc’s 27 member states,
wants the budget to increase by no
more than 2.91 per cent from this
year’s level of €122.9bn, while
Parliament wants a 6.2 per cent rise.
SWITZERLAND TIGHTENS BANK
CAPITAL RULES
The Swiss government is asking
banks to set aside more capital as a
cushion against losses on their trad-
ing books, a move that will affect UBS
AG and Credit Suisse more than
smaller institutions. The tighter
rules, which come into force on 1
January, stem from the Basel III rules.
CITYA.M. 11 NOVEMBER 2010
FSA to toughen bank pay law
REGULATION
▲
BY MARION DAKERS
FOREIGN banks operating in the UK
could be forced to disclose the pay
packets of their senior bankers,
according to a consultation paper
released by the Financial Services
Authority (FSA) yesterday.
The FSA said it is seeking feedback
on whether to close the loophole that
exempts banks based outside the
European Economic Area from disclo-
sure rules on remuneration.
All UK banks will be asked to reveal
QE less likely
after Bank’s
new outlook
▲
ECONOMICS
BY JULIET SAMUEL
GILT yields shot up after the Bank of
England’s inflation report yesterday,
with the market moving to price in
lower expectations of further quanti-
tative easing (QE).
Yields on ten-year gilts jumped 14
basis points to 3.18 per cent from 3.04
per cent before the report was
released and sterling rallied to over
$1.60 against the greenback and to
over €1.17 against the euro.
In its first inflation report since the
government’s comprehensive spend-
ing review, the Bank kept its GDP
growth projections at the same level
as in its August report, saying that it
had already factored in the fiscal
crunch.
It forecast that growth would reach
about 2.2 per cent next year and then
rise to three per cent by 2012.
But it pushed back the date by
which it said consumer price infla-
tion was likely fall below its two per
cent target to 2013, cautioning that
details of pay policies on at least an
annual basis, the FSA said, with the
country’s top 26 institutions held up
to the strictest scrutiny in reform
linked to the Basel III global rules.
Bonuses, deferred pay and golden
handshake deals will be among the
list of awards that must be disclosed
by banks operating in the UK, instead
of the current system where banks
only release the total amount spent
on pay each year.
The UK has already introduced a
one-off tax on bonuses and will
impose a four-year levy on banks from
“the risk around its most likely path
are judged to be skewed to the
upside”.
Its probability-weighted fan chart
(see right) shows that it expects CPI to
peak at about 3.4 per cent halfway
through 2010 and then to fall to two
per cent a year later.
The combination of bullish growth
projections and above-target inflation
forecasts convinced City economists
that a second round of QE is off the
books for now.
Ernst & Young’s Nida Ali said:
“Further asset purchases are only like-
ly to occur if there are clear signs that
the recovery is relapsing.”
But many also think that the report
“left the door open” for QE if growth
figures slow, with Capital Economics’
Vicky Redwood claiming it could still
come as early as February.
Most economists now expect inter-
est rates to remain at their current
0.5 per cent level until late 2011, after
which IHS Global Insight’s Howard
Archer said they would rise only
gradually.
News 3
Nokia and Apple lose sales
the start of 2011.
to cheap Chinese phones
Consultancy PwC said the plans
were less onerous than the mandato-
ry breakdown of the number of staff its marketshare slip from 44.6 per
▲
TECHNOLOGY
in each pay band, which had been cent to 36.6 per cent in the period.
mooted by the Treasury. NOKIA and other established handset No-brand manufacturers, mostly
“The proposals do not include makers are quickly losing global mar- small Chinese firms, have this year
some of the more prescriptive ele- ket share to a push by Chinese no- quickly expanded their reach outside
ments of previous proposals, such as brand vendors into emerging China into Africa, India, Latin
disclosure by pay bands. This should markets, research firm Gartner said. America and Russia.
help prevent the unintended conse- Surging growth of no-brand manu- These manufacturers, who sell in
quences that can sometimes follow facturers coupled with growing total roughly as many phones as
pay disclosure, for instance pay ratch- smartphone sales boosted third-quar- Nokia, will soon focus on smart-
eting,” said Tom Gosling, a partner at ter mobile phone sales 35 per cent, phones, using Mediatek’s new
PwC. Gartner said yesterday. But Nokia saw Android chipset, Gartner said.
Inflation report
signals growing
split on MPC
ECONOMICS
▲
THE Bank of England’s quarterly infla-
tion report yesterday revealed a widen-
ing divergence of views as governor
Mervyn King admitted that the
Monetary Policy Committee (MPC) was
caught up in a “vigorous debate”
about policy.
The report stated that “there is a
wider than usual range of views
Mervyn King said there was a growing divide on the MPC Picture: GETTY among committee members” as the
Bank pushed back projections on the
ANALYSIS l CPI inflation projection based on market interest rate expectations timeframe by which the consumer
6 and £200 billion asset purchases price index (CPI) would fall below its
% two per cent target.
5 Increase in
4 prices on a
In a sign of the uncertainty gripping
3
year earlier the MPC, its report stated that the
2
chances of inflation being above-target
1
by the end of 2013 were fifty-fifty. It
0
Inflation target met now seems certain that any decision
-1
on monetary policy will be heavily
-2 reliant on data releases.
2005 07 08 09 10 11 12 13 BGC Partners’ David Buik said that
the report signalled a monetary policy
ANALYSIS l GDP projection based on market interest rate expectations and no of “suck it and see”, with IHS Global
7 % further QE Insight’s Howard Archer agreeing that
6 the Bank “remains perched on the
5
4 monetary policy fence”.
3
2
ONS Data The Institute of Directors’ Graeme
1 Leach said: “Uncertainty is written all
0
-1 Banks over this report and rightly so. There
-2 Projection are so many competing forces towards
-3 estimates of
-4
past growth sustained recovery or recession, the
-5
-6 economic models are overwhelmed.
2006 07 08 09 10 11 12 13 This is a time for judgement.”
 6 News
GM delivers
$2bn in profit
ahead of IPO
▲
AUTOMOTIVE
BY HARRY BANKS
US CARMAKER General Motors (GM)
posted a $2bn (£1.24bn) third-quarter
profit yesterday, driven by an acceler-
ating turnaround in North America
as it rushes to complete an initial
public stock offering (IPO) set for
next week.
The quarterly profit was the
largest for GM since it emerged from
bankruptcy in July 2009 and provides
the last piece of financial data for
investors evaluating the Detroit-
based carmaker’s $13bn initial public
offering due next week.
GM posted revenue of $34.1bn in
the third quarter, and earnings per
share of $1.20.
GM said it expected to post solidly
profitable results for 2010, its first
full-year of profit since 2004.
“It obviously will bode well for the
IPO,” said Van Conway, chief execu-
tive at turnaround specialists
Conway MacKenzie. “It’s more proof
that they have executed the turn-
around – I don’t say completely
because I wouldn’t say that just a
couple of quarters make [a turn-
around].”
GM reported increased cash earn-
ings in North America for a third
consecutive quarter, with its interna-
tional results flat to up slightly and a
bigger loss in Europe.
“We know we have much more
work to do,” chief executive Dan
Akerson said in a conference call.
“We still need to fix Europe. We con-
tinue to be vigilant in reducing cost
in the enterprise, and we have just
started doing a better job in market-
ing our brands to consumers.”
The carmaker’s IPO will include
common and preferred shares and
will allow the US Treasury to reduce
its stake in GM from about 61 per
cent to near 43 per cent.
GM executives have started an
investor road show to support the
IPO plans. Akerson and chief finan-
cial officer Chris Liddell did not take
questions after a presentation on the
results yesterday.
CITYA.M. 11 NOVEMBER 2010
Obama defends
US dollar policy
ahead of G20
ECONOMICS
▲
US PRESIDENT Barack Obama
responded to widespread criticism
that the United States is deliberately
weakening the dollar as he tried to
swing the G20 spotlight back onto
global imbalances at a gathering of
world leaders in Seoul.
The US easy-money policy has been
under fire since the Federal Reserve
announced last week it would pump
an additional $600bn (£372.4bn) into
the economy. In an attempt to ease
tensions, Treasury secretary Timothy
Geithner said he was optimistic the
G20 could reach a deal to limit trade
imbalances during a two-day summit
due to conclude today.
Obama, in an attempt to take his
own country’s policies out of the
glare, said a strong US economy was
vital to the global recovery and urged
his G20 counterparts to put aside dif-
ferences and help promote economic
growth.
“When all nations do their part -
emerging no less than advanced, sur-
plus no less than deficit - we all bene-
fit from higher growth,” Obama said
in a letter sent to G20 leaders.
The bridge-building came after a
day of heated arguments as negotia-
tors struggled to hammer out a state-
ment that all G20 leaders could sign.
Obama is trying to calm tensions ahead of today’s G20 summit Picture: REUTERS MORE ON G20: P9
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CITYA.M. 11 NOVEMBER 2010
Cameron tells
China to avoid
protectionism
POLITICS
▲
BY DAVID CROW
DAVID Cameron yesterday warned
China against protectionist policies
and raised the issue of its currency,
ahead of today’s G20 meeting of
world leaders.
In a carefully worded speech, the
Prime Minister promised to campaign
for greater links between Europe and
China, but said the economic super-
power needed to rebalance its econo-
my towards domestic consumption.
He added: “The truth is that some
countries with current account sur-
pluses have been saving too much
while others like mine with deficits
have been saving too little.
“The result has been a dangerous
tidal wave of money going from one
side of the globe to the other.”
Cameron insisted that he did not
want to punish China for being a suc-
cessful exporter, but highlighted ways
the country could shrink the deficit,
@
A lesson in
Confucius
for the PM
COMMENT
DONATA HUGGINS
CONFUCIUS once said “study the past,
if you would divine the future.”
Someone should have told David
Cameron this before he donned a
poppy in Beijing. To show your respect
for the fallen is a noble pursuit – one
that City A.M. wholeheartedly supports
(see p1 and p20) – but in China wear-
ing what we see as a remembrance
poppy is interpreted very differently.
Cameron should have known that
there is only one thing the Chinese
think of when it comes to poppies and
the British: the Opium Wars. He has
committed a serious cultural faux pas.
But he has got one cultural quirk
very right on his trip to represent
British business -- his presence.
Historically in China, businessmen
rank below peasants in the pecking
order. To know a government official
improves your social status and, unsur-
prisingly in a pseudo-Communist
country, makes business easier to do.
His presence will speed along Sino-
British deals. But speed is a relative
term in a culture of collective decision-
making. In the West we say “Rome
wasn’t built in a day” because it took
around 500 years. The Chinese consid-
er themselves to still be working on
the Han civilisation --- a project started
in 207AD.
WAS CAMERON RIGHT TO BRING UP CHINA’S HUMAN
RIGHTS RECORD ONLY IN PRIVATE?
such as boosting domestic consump-
tion.
In a carefully worded speech, the
Prime Minister also called on China to
“take steps over time toward interna-
tionalising its currency”, setting the
scene for a fraught G20 meeting.
Countries like the US think that
the yuan, which has not been allowed
to appreciate, is too low, fanning glob-
al imbalances in the economy.
The Prime Minister’s speech, deliv-
ered to an audience at Peking
University, capped a high-profile two-
day trade delegation to China that
failed to live up to expectations.
Despite promising trade deals
worth “billions of pounds” before the
trade mission, officials admitted they
were disappointed by the number of
agreements that were signed.
Save for a £750m deal to supply
Rolls-Royce airplane engines, there
were few agreements worth trumpet-
ing. Britain has lagged behind France
and Germany in trade with China.
@
@
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News 9
IFS calls for
Interviews by Juliet Samuel
AMMAR DAKER | FDM GROUP overhaul of
“The focus of the visit is the economy
and it’s not really for the UK to interfere
with internal issues on human rights. It’s
tax system
their issue. We can disagree but we can’t
▲
TAXATION
change it and if we put a lot of pressure
BY KATIE HOPE
on them, it might affect our relationship.”
THE UK tax system is in desperate
need of a radical overhaul in order to
support the country’s economic
FRANK MAASSEN | SUN EUROPEAN PARTNERS recovery, according to a study com-
missioned by independent think-tank
the Institute for Fiscal Studies (IFS).
“It’s a difficult question. He could have The study, conducted by Nobel
been more straightforward and Laureate Sir James Mirrlees, found
the system was overly complex,
expressed his views. There’s limited inequitable and costly to administer.
downside for British interests if he had Mirrlees called for the tax treatment
of different types of income to be
been straightforward and he could aligned so that corporation tax was
have found the right words to raise it properly integrated with personal
effectively.” taxes, and the tax treatment of
income from employment, self-
employment and corporate sources
was the same.
MITESH PATEL | QBE INSURANCE The report also argued that the tax
bias in favor of debt as a source of cor-
“From a human rights perspective, porate funding over equity should be
removed, with the resulting loss of
it’s the wrong approach because he’s corporate tax revenue offset by rais-
not mentioning China’s record. But ing taxes on wages.
Mirrlees said it was “undeniable”
from an economic point of view, he’s that the proposed changes would be
dodging a bullet and they secured “politically difficult”, but said: “We
cannot forever succumb to the tyran-
quite a few good contracts.” ny of the status quo.”
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 The Capitalist
10
REWRITING
THE RULE
BOOK FOR
CITY LIFE
RULES, rules, rules – it’s probably fair to
say the financial services industry is get-
ting a little sick of them by now, after
being hit by a hammer blow of regulatory
changes in the wake of the crisis.
But that hasn’t deterred Canon David
Parrott, guild vicar of the St Lawrence
Jewry church on the Guildhall yard, who’s
taken it upon himself to re-write the City
rule book – quite literally – in order to pro-
vide guidance on how to live a better life.
The original, written by former Lord
Mayor Sir John Barnard in 1740, is still
given to new Freemen of the City of
London today, and features 36 short
“rules” for life, along with references
from the Bible to back them up.
Parrott – whose name may be familiar
to some, since he shot to prominence ear-
lier this year for blessing BlackBerries,
phones and laptops at a Plow Monday
service – has merely updated the rule
book using modern English to make it
more relevant for today.
“The challenges presented to the City by
the financial state it has been in for the
past couple of years have caused some
people to question the values by which
they live their lives – some of the same val-
CITYA.M. 11 NOVEMBER 2010
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“A City vicar
has taken it
upon himself
to rewrite the
rule book,
quite literally,
to guide on
how to live a
growth, the more likely it is that others
better life” will realise that you’re taking part, rather
than just forgetting to have a proper shave
in the mornings. Next stop: the
Edwardian twizzle-sided moustache.
Canon David Parrott has revamped the original rule book from 1740 TALL ORDER
Useless trivia of the week, courtesy of the
ues which are central to the church,” says ing sparse growths of hair on National Business Awards on Tuesday
Parrott, who’s enlisted the business the upper lip, allow The evening – where Dragon Peter Jones’
world’s most famous man of the cloth – Capitalist to explain. National Enterprise Academy was
HSBC chairman Stephen Green – to deliv- We’re currently in the the charity partner.
er the first of a series of lectures to mark middle of “Movember”, the The rather diminutive
the book’s launch later this month at St month when many men go Capitalist had never
Lawrence Jewry. through the public humilia- realised, watching Jones
The sub-headers to the rewritten book – tion of growing a moustache on-screen, that he was
“Rules for living the high-life without from scratch, to raise funds such a statuesque fel-
being a low-life”, for example – certainly and awareness for the Prostate low, standing an
sound like he’s hit the nail on the head on Cancer Charity. impressive 6’7” tall.
the advisory front. Bank of America Merrill Lynch’s “That’s right,” he
Stewart Jones is one charitable soul laughed. “You know
braving the abuse for a good cause, and what? When we’re film-
TOP LIP TOPIARY tells me that the style of choice this ing in the Den, they even have
If you’ve felt baffled over the past week or year is shaping up to be the Mexican to put Theo Paphitis’ chair on
so by the number of usually dapper gentle- drop-down moustache. The reason- stilts so that I don’t look like such
men in the Square Mile who’ve been sport- ing? The more out-there the a giant…”
CITYA.M. 11 NOVEMBER 2010
The Shard owner has retained four property agents
Profits soar
at Credit
Agricole
▲
BANKING
BY HARRY BANKS
FRENCH bank Credit Agricole yester-
day said it did not plan to raise capital
to meet incoming Basel III require-
ments as it posted higher-than-fore-
cast quarterly results, driven by retail
banking.
The bank is seen as one of the most
vulnerable in Europe to the stricter
capital rules because of its cross-share-
holdings with its cooperative parent
group.
“Credit Agricole does not plan to
carry out any rights issue for the pur-
pose of meeting regulatory require-
ments,” the bank said in a statement,
though it said it could take “non-dilu-
tive” measures to strengthen solvency.
The bank said cross-shareholdings
with regional banks could add around
€50bn (£42.6bn) in risk-weighted
assets under Basel rules coming into
force in 2019.
Credit Agricole said third-quarter
net profit more than doubled to
€742m, higher than the €669m aver-
age market consensus.
Strong trends in domestic retail
banking helped offset losses at the
group’s Greek Emporiki unit, while
strong corporate financing activities
helped its investment banking unit
profit. Growth at corporate financing
also helped offset capital markets
sluggishness, delivering overall invest-
ment banking profits of €358m.
ANALYSIS l Credit Agricole
€
12.5 11.66
10 Nov
12
11.5
11
10.5
10
16 Aug 3 Sep 23 Sep 13 Oct 2 Nov
RSM Tenon boosted by pension changes 700 jobs are cut at Rok
▲
PROFESSIONAL SERVICES
BY VICTORIA BATES
BUSINESS advisory firm RSM Tenon
yesterday said it expects to benefit
from changes to pension legislation
in the UK, adding that its first-quarter
results and trading to date support
market expectations for the full-year.
Last month, the government said it
would cut the tax relief on pension
savings for around 100,000 higher
Picture: Micha Theiner/City A.M.
BHP Billiton
earners, in a move designed to raise
£4bn a year for Treasury coffers.
“These changes will encourage fur-
ther activity towards the second half
of the year within taxation and invest-
ment planning,” RSM Tenon said.
The company, which is planning to
migrate a greater proportion of its
risk management services to corpo-
rate clients, said the move would
limit the effects of government
spending cuts on this service line.
Shard starts tenant hunt
▲
PROPERTY
BY MARION DAKERS
SELLAR Property, the developer of the
Shard skyscraper, yesterday appoint-
ed four leasing agents to find tenants
for the tower and office block near
London Bridge.
Jones Lang LaSalle and Knight
Frank will act as joint sole agents for
the 310m Shard tower, while CB
| Rio Tinto
RSM Tenon expects integration of
its recently acquired businesses to be
largely complete around the turn of
the year, and says it is on track to
deliver the expected level of annual
cost savings.
In September, the company posted
a 37 per cent increase in full-year
adjusted pre-tax profit, boosted by the
acquisition of RSM Bentley Jennison
and certain assets of troubled rival
Vantis.
Richard Ellis and Colliers
International will advise on nearby
London Bridge Place.
The Renzo Piano-designed tower is
due for completion in the first quar-
ter of 2013, but has already signed up
and later bought out its first tenant
to try and cash in on rising City rents.
Transport for London accepted a
multi-million pound payment to sur-
render its contract for 200,000 square
| Xstrata
PROPERTY
MORE THAN 700 jobs have been cut at
stricken housing repair company Rok
after it plunged into administration on
Monday.
Administrator PwC said the cuts
mostly fall in the firm’s maintenance
and construction operations, in an
effort to trim down the 3,800-strong
payroll ahead of a possible sale.
Mike Jervis, partner and joint admin-
News 11
feet of office space in June, having
agreed to pay £38.50 per square foot.
The Shangri La hotel is currently the
tower’s only agreed tenant.
Neil Prime, head of markets at
Jones Lang LaSalle, said yesterday:
“Given the current shortage of high
calibre space being delivered we
anticipate very strong demand from
prospective occupiers – both from
within the UK and internationally.”
CharlesStan
boss attacks
regulation
▲
FINANCIAL SERVICES
BY VICTORIA BATES
CHARLES Stanley chairman Sir David
Howard yesterday railed against the
“Monty Python-esque” barrage of new
regulation hitting the independent
stockbroking sector, even as the firm
reported a 33 per cent surge in pre-tax
profit for the half year.
Howard, an ex-Lord Mayor of the
City of London, said new measures
introduced by the FSA are excessively
blunt, without the finesse necessary
to ensure new regulation is appropri-
ate to every corner of the industry.
“The political pressure on the FSA
means they are stretching the new
rules far beyond a sensible level,” he
said. “It’s a death wish on the part of
the UK to make us less competitive.”
Howard said extending the new
remuneration code to independent
fund managers and stockbrokers did
not take into account their business
models, which are entirely different
to those at large investment banks.
Stockbrokers and fund managers
are also having to devote an increas-
ing amount of time and energy to
jumping through hoops on new capi-
tal and liquidity standards, he said.
Charles Stanley itself delivered a
solid performance over the first half,
growing pre-tax profits by a third to
£7.3m and revenue by seven per cent
to £59.7m, thanks to a jump in
income at its private client division.
ANALYSIS l Charles Stanley
260 p 249.00
10 Nov
250
230
210
16 Aug 15 Sep 14 Oct 3 Nov
istrator for PwC said: “Regrettably, the
redundancies made today were neces-
sary for economic reasons where there
has been little or no interest in the
business from prospective purchasers
or where there was insufficient work
for staff to carry out.”
The auditor said more than 100
firms had expressed an interest in the
business, and that it will continue to
meet with suitors today to draw up a
shortlist.
 12 News
Allianz bullish
despite drop
in net income
▲
INSURANCE
BY MATTHEW WEST
GERMAN insurer Allianz said it was
on course to hit the upper end of its
full-year profits target despite a fall in
net earnings in the third quarter.
It said third quarter net income fell
8.8 per cent to €1.3bn (£1.1bn) as a
result of higher tax liabilities.
However, Allianz said revenue in
the third quarter grew by 11.4 per
cent to €24.5bn compared to €22bn a
year earlier, while operating profit
grew by 2.3 per cent to €2.1bn from
€2bn. Operating profit for the nine
months to 30 September stood at
€6.1bn, up 19.8 per cent on the year
before.
Michael Diekmann, chief executive
of Allianz, said: “I expect our full-year
operating profit to trend towards the
upper end of our target range of
around €7.2bn plus or minus €500m.
Also, for the first time since 2005 we
are likely to end the year with total
revenues above €100bn.”
Gross premiums written in
Allianz’s property and causality busi-
ness in the third quarter increased by
3.6 per cent to €10.6bn, compared to
€10.2bn a year before.
Adjusted for currency effects, pre-
miums decreased by 1.1 per cent.
But operating profit grew by 8.8
per cent to €1.1bn in the third quar-
ter compared to €1bn the previous
year as a result of improved under-
writing and higher investment
income.
The insurer’s life and health busi-
ness saw revenue grow by 16.4 per
cent to €12.6bn in the third quarter,
compared to €10.8bn the previous
year as a result of continued demand
for unit-linked as well as traditional
life insurance products.
Operating profit in Allianz’s asset
management business for the third
quarter stood at €521m a 41.6 per
cent increase on the previous year’s
€368m. Total assets under manage-
ment (AUM) grew by 25.5 per cent to
€1.4trn to 30 September, compared to
€1.15 trillion a year ago, Allianz
added.
CITYA.M. 11 NOVEMBER 2010
Ageas UK sees
profits fall on
higher claims
INSURANCE
▲
AGEAS UK reported a 50 per cent fall
in pre-tax profit for the first nine
months of the year following
increased claims from the severe win-
try weather at the start of the year
and poor private car sales.
The insurer, formerly known as
Fortis, reported profits of £16.6m for
the first nine months of the year, 50
per cent lower than the previous
year’s profits of £33.2m.
Ageas also blamed lower invest-
ment yields compared to last year for
the lower set of results. Meanwhile
start up deals with Tesco Bank, which
cost it £7.7m, and Kwik Fit Insurance
services, which cost Aegeas £4.3m,
also impacted on profits.
Ageas owns 50.1 per cent of Tesco
Underwriting, the new insurance
business with Tesco Bank, which
began writing business in October.
The company’s life business, Fortis
Life, which only launched two years
ago made a pre-tax loss of £3.3m for
the year to date compared to a loss of
£6.1m for the same period last year.
Fortis Life is due to be rebranded in
2011 to Ageas.
Barry Smith, chief executive of
Ageas UK, said: “Notwithstanding a
tough 2010, our performance has
improved quarter by quarter which is
Chief executive Michael Diekmann saw net income fall 8.8 per cent Picture: REUTERS really encouraging.”
CITYA.M. 11 NOVEMBER 2010
Pru gets lift
from higher
sales in Asia
▲
INSURANCE
BY MATTHEW WEST
INSURANCE giant Prudential yesterday
said its sales grew on the back of grow-
ing momentum in its Asian business.
The insurer, which was forced to
back out of a $35.5bn bid for AIG’s
Asian insurance unit AIA earlier this
year, said yesterday total group sales
rose 24 per cent to £2.4bn in the first
nine months of the year. The compa-
ny reported new business profit of
£1.3bn for the first nine months of
2010, up from £1.1bn last year and in
line with expectations.
Group sales for the third quarter
alone were £809m compared to
£689m last year an increase of 17 per
cent. The Pru’s Asian unit con-
tributed a significant amount to total
net business profit, adding 46 per
cent of the total with Asian net busi-
ness profit up 34 per cent to £621m
for the year to date compared to
£465m a year earlier.
Sales for the year so far were up 32
per cent to £1.06bn while sales for the
third quarter were £533m, up 25 per
cent on the previous year – the high-
est sales figure for the Asian business
in the third quarter to date.
In the UK, now the smallest slice of
the insurer’s business, it said it was
focused on a strategy of writing new
business with sustainable cash gener-
ation and capital preservation. Total
sales were up three per cent to £548m
for the first nine months compared to
£282m a year earlier. Net business
profit grew 14 per cent year to date to
£192m from £169m a year earlier.
Tidjane Thiam, group chief execu-
tive, said Prudential remained well
positioned to deliver strong growth
and generate strong returns for share-
holders.
“South East Asia, with its high rates
of GDP growth, saving habits and low
penetration of insurance products,
remains the most attractive long-
term opportunity in our industry and
the primary focus for our growth and
investment,” Thiam added.
Pru boss Tidjane Thiam oversaw strong third-quarter results
ANALYST VIEWS: WHAT DO YOU MAKE OF
PRUDENTIAL’S LATEST RESULTS? Interviews by Matthew West
EAMON FLANAGAN| SHORE CAPITAL
“
Another terrific set of new business figures from
”
Prudential which is undervalued, especially when the rating
of the newly-floated AIA in Asia is factored in.
JONATHAN JACKSON | KILLIK & CO
“
The latest results show the success of Prudential’s
”
strategy of focusing on value over volume, and capitalising
on the most profitable growth opportunities.
BARRIE CORNES | PANMURE
“
This is a straightforward set of figures and helps
”
reinforce the strength of the group, despite the AIA loss, the
company is still delivering in spades.
News 13
SAS posts big
loss on back of
EU cargo fine
TRANSPORT
▲
SCANDINAVIAN airlines (SAS) efforts
to cut costs were overshadowed by a
Picture: GETTY fine that dragged it to a third-quarter
pre-tax loss of 1bn krona (£92.5m) yes-
terday.
The airline booked 1.4bn krona in
one-off charges, the biggest of which
was a €70.2m (£60m) fine from the
European Commission related to an
investigation of European airlines
accused of operating a cartel in cargo
charges imposed on Tuesday.
Since 2009 SAS has made efforts to
cut costs by around 6.3bn krona while
helping to boost its underlying busi-
ness. But the airline has been badly
hit by the global downturn and has
struggled to compete with no-frills
airline.
Acting chief executive of SAS, John
Dueholm, said revenues were stabilis-
ing and costs would continue to fall,
though SAS expects continued price
pressure through 2011.
“When you have unit costs decline
more than unit revenue, then of
course you will have a positive impact
on the underlying business,"
Dueholm said.
In the second quarter the company
lost 600m krona mainly due to the
volcanic eruption in Iceland that kept
most of Europe’s air traffic on the
ground for a week.
 14 Consumer News CITYA.M. 11 NOVEMBER 2010

American
Supergroup Apparel suffers
sales in lift another loss

from abroad
RETAIL

▲
US fashion chain American Apparel’s
like-for-like sales plunged by 16 per
cent over the third quarter to 30
September.
Total sales dropped ten per cent to
$134.2m (£84m).
▲

RETAIL stores in the UK and a further 13 con-
BY JOHN DUNNE cessions in House of Fraser depart-
ment stores.
SUPERGROUP yesterday said it had The Superdry label has been boost-
opened a record number of stores ed by celebrities, including David
Increases in production costs hit
the figures, the company said.
American Apparel is working with
Supergroup founder Julian Dunkerton says the firm is making solid progress its primary lender, Lion Capital, in a
bid to breathe new life into the busi-

Living up to the brand name

abroad in the last quarter – as sales
surged by 68.4 per cent.
The company, which is behind the
Superdry label, saw sales jump to
£57.5m in the three months to 31
October. Supergroup opened a record
14 franchise stores overseas in the
quarter, including its first in the
United Arab Emirates, bringing the
total to 49.
The company also launched eight
ANALYSIS l Supergroup
1,300 p
1,100
900
700
500
Mar May
Beckham, who wear the clothes.
Chief executive Julian Dunkerton
said: ‘These figures really demon-
strate the solid progress we are mak-
ing as a brand and as a retail
company. The autumn range has
been well received by the public and
our roll-out is on track both in the UK
and internationally.” The business
floated in March and the share price
has soared since.
1,200.00
10 Nov
Jul Sep Nov
WHEN investors look back over
2010, they’ll see a graveyard of
failed IPOs. Merlin, New Look and
Travelport couldn’t even get away;
those that did, such as Ocado and
Promethean, haven’t lived up to
expectations. One of the flotations
that stands out from the crowd is
Supergroup, which appears to be
living up to its boastful brand
name. Shares have more than dou-
bled since the firm went public,
while sales have done better still.
In its most recent update, cover-
ing the period to 1 August, sales
grew by 60 per cent. Since then, the
trend has accelerated, with sales in
the three months to the end of
October up by 68 per cent.
Valuing such a fast-growing
retailer is tricky, and investors
should urge caution where hype is
involved. Supergroup currently
trades on 23 times calendar earn-
ings in 2011, far more than the
wider retail sector (12.6 times). Bulls
point out that ASOS trades on over
40 times 2011 earnings, although
the online-only retailer has a com-
pletely different business model. No
one can deny Supergroup’s mete-
oric rise, but it is already priced in.
BOTTOMLINE
Analysis by David Crow
ness. Last month, it amended the
terms of the chain’s loan agreement
to prevent it from breaking its bank-
ing covenants.
Tom Casey, acting president of
American Apparel, said: “We expect
to improve financial results by sup-
porting the brand with a customer-
focused supply chain, leveraging our
speed to market capability with lower
distribution costs.
“We are optimising our retail store
base through investment in technolo-
gy and improved allocation while low-
ering our lease costs.”
Earlier this month the company
reported – later than expected – a sec-
ond-quarter net loss of $14.7m
(£9.1m) after sales fell 2.4 per cent to
$132.7m (£86m).
The company added that it would
be concentrating on its basic ranges
in a bid to turn the firm around.
CITYA.M. 11 NOVEMBER 2010 Consumer News 15

Sainsbury’s in profit rise

as expansion pays off
uted to a rise in sales in its luxury form well, notwithstanding the
▲

RETAIL
BY JOHN DUNNE
SAINSBURY’S chief executive Justin
King yesterday said record numbers
of shoppers were flocking to the
supermarket chain which is massive-
ly expanding its floorspace – helping
it to deliver an eight per cent rise in
underlying profit.
The £332m profit for the six
months to 2 October was also attrib-
Taste the Difference ranges as cash-
strapped Brits shunned eating out in
favour of a night in front of the TV
watching the likes of the X Factor.
King revealed that the company –
which opened its biggest store ever
earlier this year – was planning to
create 1.5m square feet of new space
next year, up from the previous target
of 1.25m square feet. He said: “We’re
in a good position to continue to per-
tough environment. Customer num-
bers are now at an all-time high of
over 20m transactions every week,
which is a million more than last year
and an indication of our growing uni-
versal appeal.” Like-for-like sales rose
by two per cent to a total of £11.2bn.
King added: “People are watching
the X Factor and other TV shows ...
but they’re eating well while they’re
doing it.” Sainsbury’s chief executive Justin King said the chain’s expansion plans are going well.

Ralph Lauren ups sales forecasts

Have you ever eaten a Honda?
efited from a recovering demand for
▲

RETAIL
RALPH Lauren reported a higher-
than-expected quarterly profit yester-
day and again raised its full-year sales
outlook.
The fashion company, whose brands
include Polo, saw net revenue rise 11
per cent to $1.53bn (£0.9bn). It has ben-
Well, you might have. At Honda we grow our own soybeans,
luxury items, as well as strong sales
overseas. The most recent quarter is to fill our containers that would otherwise be shipped home empty.
usually Polo’s strongest in wholesale It’s a clever use of space, something we are very good at. Why?
as shipments are made ahead of
Christmas. Company president Ralph Because everything we do goes into everything we do. Just look at
Farah said: “We are encouraged by our the Jazz, with its Magic Seats and clever flexible interior. You’ll be
current business momentum heading
into the holiday season.” amazed at the room inside the cabin. And with a large innovative
boot space, it’s perfect for your next trip to the supermarket.
Just don’t forget the soybeans.

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@\a\Vb` in mpg (l/100km): Urban 42.5 – 43.5 (6.6 – 6.5), Extra Urban 58.9 – 62.8 (4.8 – 4.5),
#+'()*$#)*% Combined 51.4 – 53.3 (5.5 – 5.3). CO2 emissions: 130 – 125 g/km.
Terms and Conditions: Offers valid on cars registered from 1 October to 31 December 2010. Offers applicable at participating Dealers and are
?\aXfTeXbcXa@baWTlgb9e\WTl+T`Â+c`FTgheWTlTaWFhaWTl,T`Â(c`! at the promoters’ absolute discretion. Subject to model and colour stock availability. Price Point: £9,995 price point applies to Jazz 1.2 S Manual
and excludes metallic paint (£430 extra). *Servicing, Road Tax and Finance rates apply to Jazz range excluding Jazz 1.2 S Manual.
ETgXfVbeeXVgTg$$AbiX`UXe%#$#!G[XfXeTgXfTeX_\`\gXWTaW`TlUXj\g[WeTjabeV[TaZXWTgTalg\`X!4iT\_TU\_\gl- Honda Hire Purchase (HP): Indemnities may be required in certain circumstances. Finance is only available to persons aged 18 or over subject
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 16 Focus on Inflation Report
ING prepares
for two IPOs
post bailout
▲
FINANCIAL SERVICES
BY HARRY BANKS
DUTCH bankassurance group ING said
yesterday it planned two initial public
offerings, rather than one, for its
insurance activities as part of a manda-
tory split-up imposed because of its
state bailout.
Chief executive Jan Hommen said
two IPOs could allow ING to achieve a
higher valuation and raise more
money for insurance assets with a
combined book value of €21bn
(£17.9bn). The group still needs to
repay half of its €10bn Dutch state cap-
ital injection. “While the option of one
IPO remains open, we are going to pre-
pare ourselves for a base case of two
IPOs for our insurance business,” he
said.
A Europe-focused IPO would have a
solid cashflow combined with strong
growth positions in developing mar-
kets, he said, while a separate US-
focused IPO would have a strong
position in retirement services.
ING shares opened weaker before
closing 2.4 per cent higher at €8.16,
below a year high of €8.18 set in
October and after a 15.5 per cent rise
this year for a market value of some
€30bn. The two IPOs would give ING
more flexibilty as investors used differ-
ent valuation models for operations in
the US and Europe while European
Solvency II regulatory changes would
make the US business less competitive,
Hommen added.
Hommen said while the fourth
quarter of 2011 was still possible as a
window for the market operations,
2012 was more likely for the floats in
Amsterdam and New York.
He added that the group is still in
talks with many interested parties
about the insurance operations.
The smaller WestlandUtrecht Bank
unit will run as a standalone unit
from 18 November. The ING brand will
stay with banking activities. The split
of ING into banking and insurance
businesses will reverse its creation
through the merger nearly 20 years
ago of bank NMB and insurer
Nationale Nederlanden.
CITYA.M. 11 NOVEMBER 2010
Asset managers
close pay gap
with the banks
REMUNERATION
▲
ASSET managers’ compensation lev-
els are set to creep up on their invest-
ment banking peers this year, as weak
trading results and lower client activ-
ity hit the bank bonus round.
Incentive compensation at asset
managers and hedge funds is expect-
ed to rise by 5 to 15 per cent in 2010,
according to a report by US consultan-
cy Johnson Associates, as assets under
management grow and hedge funds
exceed their high water mark.
By contrast, investment bankers
are likely to see a net fall in their end-
of-year compensation, with equities
and fixed income traders coming off
worse than those involved in under-
writing and advisory activities.
Equities may see a drop of 20 to 25
per cent due to lower client activity,
while fixed income staff could see
ANALYSIS l ING
€ 8.16 their pay fall by up to 30 per cent on
10 Nov the back of unfavourable compar-
8.00 isons with an extremely strong 2009.
Underwriting compensation is like-
7.60
ly to be flat due to mixed results,
though M&A advisers may see a pick-
7.20
up of five per cent as the deal pipeline
begins to improve, the report shows.
6.80
But investment banks still pay
more as a percentage of net revenue,
16 Aug 13 Sep 11 Oct 1 Nov doling out 42 per cent on average so
far this year, compared to around 37
ING chief executive Jan Hommen is planning two IPOs Picture: REUTERS per cent for asset managers.
CITYA.M. 11 NOVEMBER 2010 News 17

Alex fails to scrub up as apprentices get soapy

ble. Last night was his moment to
shine. So what was it that coaxed
him into action? Was he biding his
time all the while, observing and
strategising? No, he was waiting for
the pretty girls.
This was the TV advert challenge
and the teams had to promote a new
APPRENTICE REVIEW cleaning product. As team leader
Christopher quickly cast himself in
GRAEME ALLISTER the ad and started casting for a wife.
“It’s really important for me and the
actress to have chemistry”, he
dressed as an octopus). Nick
despaired (acting as part
Germaine Greer, part Media
Studies teacher) while the
advertising executives sat
agog.
Ordinarily this sort of
behaviour would have been
enough to get the team
hauled back into the board-
room but they were in luck –
the other team was led by
Alex.
about himself: “If I was in an apple
pie, I’d be an orange”.
Sadly, when it came to the
cleaning product he
seemed to be suffering
from writer’s block. With
no other options, they
went for The Germinator,
a piece of punning that
investment banker Chris
was inordinately proud of.
While they avoided calls
from Schwarzenegger’s
breezes usually evoked by cleaning
products they emulated the aesthetic
charms of a bottle of Swarfega.
The TV advert starred a child actor
with a wavering American accent
playing the Germinator. But even
superheroes should read the label:
not to be handled by children.
Back in the boardroom, there was
nothing left to do but sit back and
wait for Alex to talk himself out of a
job as he ranted and blamed all
around him. A victim of Lord Sugar

T
HIS week Christopher finally
burst into life. Who? Well, it’s
hard to say. You might have
spotted him in the background
but so far his input has been negligi-
purred. Such artistic integrity! Alex describes himself lawyers, it was time to (and the Germinator) Alex insisted,
The ad was a sort of “Carry On as a “brand sto- design the prod- “I’m going to be successful. I’m going
Scrubbing”, combining regressive ryteller” and uct; rather to found my own business, I don’t
attitudes about gender roles with a had a little than the need him.”
bit of innuendo (and a woman tale to tell summer In other words: “I’ll be back”.

HMV won’t say

whether chief
executive Simon
Fox has met his
new investor

HMV lifted by
Russian buyer
▲

RETAIL
accessories range, in September,
BY THOMAS HAMED which saw the company partner with
HMV Group saw its shares rise yester- selected fashion brands, including
day after Russian billionaire Boxfresh, Lee Jeans, FLY53 and
Alexander Mamut upped his stake to Eastpak.
above three per cent. A spokesman at HMV said: “We
The company’s stock had slumped recently successfully launched our
49 per cent this year as the DVD and new fashionwear offer at selected
CD seller, which also owns HMV stores around the country.
Waterstones, hit tough times. “Though we have no immediate
HMV has been moving into live plans, we may also look to develop an
music events and venues as it tries to own-label option for HMV – most like-
diversify its operation, as downloads ly for the t-shirts, tops and the like,
have taken their toll on CD sales. and we’ve registered the brand name
Nick Bubb, an analyst at Arden 363 trademark.”
Partners, said in a note yesterday: “An
investment of five million pounds is ANALYSIS l HMV
chicken-feed to Mamut at this stage, 70 p 47.25
but his ultimate intentions are 10 Nov
65
unclear.” Mamut bought 12.5m
shares to raise his stake in the retailer.
Meanwhile HMV has registered the
55
trademark “363”, based on the
address of the company’s first shop,
at 363 Oxford Street and could
45
launch its own fashion label.
HMV, led by Simon Fox, has already
16 Aug 15 Sep 14 Oct 3 Nov
brought out Studio, the clothing and

ALEXANDER
MAMUT
ALEXANDER Mamut is a colourful fig-
ure in Russia’s business elite. Born into
a family of Moscow lawyers, Mamut
was a friend and political adviser to
Russian President Boris Yeltsin in the
1990s.
With a fortune of £900m, he is the
655th richest man alive, according to
Forbes.
The oligarch co-founded Imperial
Bank in Russia, and also ran MDM-
Bank. Mamut also made significant
investments in Troika-Dialog, a
Russian investment bank.
Mamut’s stake in HMV is only his
latest foray into the communications
industry. Mamut bought LiveJournal
in 2007, a popular blogging site in
Russia.
In 2008, he also purchased a 100
per cent stake in Euroset, Russia’s
largest retailer of mobile head sets.
But he has backed failures too, such
as Bookberry, a Russian bookstore
chain, which went bankrupt in 2009.
 18 News
Incoming Lord
Mayor up early
to rehearse for
City’s big parade
▲
CITY
ALDERMAN Michael Bear, who will
become Lord Mayor of the City of
London tomorrow, took part in a pre-
dawn rehearsal yesterday for this
year’s Lord Mayor’s Show (on
Saturday 13 November) in front of St
Paul’s Cathedral.
He will be the 683rd Lord Mayor,
whose duties include representing
UK-based financial services interna-
tionally. This year’s show features a
troupe of zulu warriors, samba
dancers and Hong Kong acrobats.
Events start from Mansion House at
11am and the three-mile long proces-
sion winds its way through the City
streets, via St Paul’s Cathedral, to the
Royal Courts of Justice where the Lord
Mayor swears an oath of allegiance to
the Monarch.
The day culminates at 5pm in a
spectacular firework display lit from
a barge on the Thames.
Maersk hikes profit
guidance after solid
nine-month figures
SHIPPING
▲
BY HARRY BANKS
SHIPPING and oil group AP Moller-
Maersk hiked its 2010 profit forecast to
around $5bn (£3.1bn) as it posted fore-
cast-beating profits for nine months,
driven by cost cuts and higher freight
rates and oil prices.
The upgrade from the previous
guidance for a full-year net result
exceeding $4bn stemmed mainly from
higher rates for container shipping
and efficiency improvements, the
group said.
Maersk’s report followed strong
third-quarter results from Asian rivals
such as China COSCO and Neptune
Orient Lines (NOL) , pointing to a sus-
tained recovery from a dismal 2009 for
shipping as global trade regains
momentum. Net profit at the group,
Alderman Michael Bear was up early to rehearse Picture: Clive Totman which owns the world’s biggest con-
@
@
@
.com
MORE NEWS
ONLINE
www.cityam.com
CITYA.M. 11 NOVEMBER 2010
tainer shipping company Maersk Line,
totalled 23.8bn Danish crowns ($4.4bn)
in January-September against losses of
$3.9bn in the same period last year.
The result beat an average expecta-
tion of a profit of 21.4bn crowns in a
poll of analysts whose estimates
ranged from 19.9bn to 22.9bn crowns.
Cheuvreux analyst Joakim Ahlberg
called the third-quarter results “very
solid” and said he would make minor
increases to earnings estimates on the
back of the report.
Average freight rates, including
bunker surcharges, were up 34 per
cent in the nine months to end-
September from the same period last
year, and volumes seven per cent high-
er, Maersk said. Chief executive Nils
Smedegaard Andersen said the
improved competitiveness through
cost savings was “a very big factor”
driving the results.
CITYA.M. 11 NOVEMBER 2010 News 19

New E.ON chief executive

Johannes Teyssen is seeking
to mend ties with investors
Picture: REUTERS
Tax dispute forces Tullow Oil
to abandon drilling in Uganda
Tullow’s dispute from another, poten- Ugandan side of Lake Albert and

▲
ENERGY
BY HARRY BANKS
EXPLORER Tullow Oil said a dispute
with the government of Uganda had
forced it to abandon drilling at two
oil-rich blocks near Lake Albert and
that it was unsure when this would
recommence.
The London-based company added
that the government was wary of
agreeing to a plan to decouple
tially lengthier, dispute between the
government and Tullow’s former
partner, Heritage Oil, which could
delay a return to drilling.
“We have no definitive timeline
(for a resolution),” chief operating
officer Paul McDade said.
Tullow bought half-shares of two
oil blocks from Heritage earlier this
year, giving it 100 per cent ownership
of three blocks which cover the
which Tullow believes could contain
billions of barrels of oil. Heritage
refused to pay capital gains tax on the
sale, which the government and
Tullow said was due, and subsequent-
ly the government refused to renew
the licences for Tullow which had
planned to sell stakes to France’s
Total and China’s CNOOC. The licence
dispute has forced Tullow to halt
operations at the blocks.

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▲

UTILITIES
BY HARRY BANKS
GERMANY’S E.ON, the world’s largest
utility, promised investors minimum
dividends for two years, seeking to
restore confidence in an industry
unsettled by slumping prices and
demand.
The triple whammy of lower indus-
trial production, declining power and
gas prices as well as prospects of high-
er taxes in markets such as Germany
has made the utility sector the worst-
performing in Europe for the second
year in a row.
New chief executive Johannes
Teyssen is seeking to mend ties with
investors and said yesterday that the
company’s dividend for 2011 would
drop no more than 13 per cent to
€1.30 a share, and its 2012 payout
would remain at that level.
“As prospects for E.ON’s operating
business are weak the dividend was
the last hope” for investors, said
Equinet analyst Michael Schaefer.
Investors seemed unconcerned
that the dividend pledge means E.ON
might pay out more of its earnings
than it had been planning, and E.ON
€22.27, outperforming the STOXX
Europe 600 utilities index. “A stable
1/2
dividend is something fantastic these
days,” said Herbert Wertz, who helps
Price
manage €260bn for insurer Generali.
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Futures Trading Commission’s (CFTC)
▲

FINANCIAL SERVICES
THE US futures regulator released
proposals to govern the “back office”
functions of swap dealers and other
big players yesterday, but said more
controversial elements for swaps par-
ticipants remained to be determined.
The rules, including new firewalls
between analysts and traders, are
part of a series of 50 to 60 regulations
to implement the Commodity
share of the Dodd-Frank Wall Street 20 Tottenham Court Road
reform law.
“These standards for ‘back office’ London - W1T 1BW
functions will help reduce risks
because they require senior manage- Tel: 0845 634 0320
ment of swap dealers to have in place ‘Samsung’ and or other logos are registered trademarks of Samsung Electronics Co. Ltd. All pictures are for
policies to oversee the risks of their illustration purposes only. Actual product may differ. Ask in-store for more details.
swaps desks,” CFTC chairman Gary
Gensler said in a speech yesterday.
The rules aim to reduce risk in the
$615 trillion over-the-counter market.
 20 News
IS Pharma prepares to buy
PHARMACEUTICALS
▲
BY STEVE DINNEEN
PHARMACEUTICAL products supplier
IS Pharma yesterday announced it
will raise £12.5m to fund an acquisi-
tion drive.
The new fundraising comes after
the firm raised £3.6m last month by
placing new shares. Some of the cash
raised will go towards covering con-
tingent payments for past acquisi-
tions. It will be added to its cash
balance of £5.1m.
The firm also reported its revenue
Upbeat Great
Portland sees
strong gains
PROPERTY
▲
BY HARRY BANKS
GREAT Portland Estates booked a 7.3
per cent half-year gain in its London
property portfolio to £1.46bn, buoyed
by higher income as tenants seek its
more affordable office space.
The landlord, known for offering
office and retail space at competitive
rents in the popular West End busi-
ness district, yesterday said its adjust-
ed net asset value rose 11 per cent to
314p a share in the six months to the
end of September.
The valuation gain helped Great
Portland outperform the Investment
Property Databank Central London
index, with a total property return
of 10.1 per cent against an 8.3 per
cent benchmark, but chief executive
Toby Courtauld warned economic
gloom had stripped momentum
from the London real estate market
comeback.
“Whilst there continues to be a
surfeit of buyers over sellers... we
believe these more sedate conditions
rose 10 per cent to £6.5m year-on-year
for its first half.
Its profit jumped an impressive 21
per cent to £4.5m, with gross profit
margins of 68 per cent, compared to
62 per cent last year.
Profit from operations was up 98
per cent to £1.8m with profit after tax
up 192 per cent.
Tim Wright, chief executive of IS
Pharma, said: “We are pleased to
report another period of strong per-
formance as we continue to deliver
against our strategy of building a sig-
nificant European speciality pharma-
will persist into 2011 as the uncertain
macro environment will continue to
affect sentiment in the short term,”
Courtauld said.
Despite the cautious near-term out-
look for London property prices,
Courtauld said the company was
encouraged by demand for its real
estate assets after achieving new leas-
es, reviews and renewals equating to
£8.3m of new income.
Total group revenue, including a
share of joint venture rental income,
was £37.1m, up 10.4 per cent on the
same period last year.
ANALYSIS l Great Portland Estates
360 p
345.00
350 10 Nov
340
330
320
310
16 Aug 15 Sep 14 Oct 3 Nov
ceutical company.
“The IS Pharma team has, once
again, achieved further, sustainable,
revenue and profit growth while at
the same time continuing to grow
our product portfolio.
“The announcement of a dividend
in the period represents a significant
step in the history of the company,
recognising that we are now able to
reward our shareholders investment
while continuing to pursue our
growth strategy. IS Pharma acquires
and commercialises late-stage phar-
maceuticals and medical devices.
Great Portland Estates has seen its net asset value rise 11 per cent to 314p a share in the
six months to the end of September.
STEPHEN
NORCROSS
FINNCAP
STEPHEN Norcross was lead corpo-
rate broker on the placing.
Norcross joined FinnCap in 2006
from St Helen’s Capital, where he had
been head of the Equity Products
Group. At St Helen’s Capital he dealt
with high net worth individuals and
institutional investors interested in
growing companies.
Before working in the City Norcross
had a general sales background, hav-
Picture: Micha Theiner/City A.M.
CITYA.M. 11 NOVEMBER 2010
ing run his own direct sales force in a
number of industries. He studied
Physics at University.
He has been running a number of
small cap fundraisings since 2006
totalling around £200m.
FinnCap, led by chief executive Sam
Smith and chaired by private equity
veteran Jon Moulton, is an independ-
ent institutional broker and corporate
adviser to 73 clients. It specialises in
advising and raising capital, providing
research and after-market care for
both growing and established smaller
companies. It last month hired former
fund manager Tom Hayward from
Herald Investment Management,
where he was responsible for £50m
venture capital funds, as its new
finance director.
Google gives
all its staff a
10pc pay rise
▲
TECHNOLOGY
GOOGLE is handing all of its employ-
ees a 10 per cent pay rise and a pre-
Christmas bonus of $1,000 in a move
that will cost the search giant a
reported $1bn a year.
Employees received the news in an
internal memo emailed to staff from
Google chief executive officer Eric
Schmidt. Tax on the “holiday cash
bonus” will also be paid for by Google.
“While we don’t typically comment
on internal matters, we do believe
that competitive compensation plans
are important to the future of the
company,” a Google spokesman said
in an email.
The news suggests Google is in
strong health as a company – it
recruited 1,500 staff in the three
months to September.
But it also suggests that it is taking
fears over staff attrition in Silicon
Valley seriously – particularly against
main rival Facebook.
The company’s chief financial offi-
cer Patrick Pichette talked about the
Internet industry’s “war for talent”
when presenting bullish third quar-
ter financial results last month.
In 2009, Google repriced millions
of employee stock options whose
value had been wiped out.
CITYA.M. 11 NOVEMBER 2010
SSE posts dip
in profits but
lifts dividend
▲
ENERGY
BY PHILIP WALLER
ELECTRICITY firm Scottish &
Southern Energy yesterday posted
forecast-busting first-half profits and
pledged to stick to plans to raise its
dividend, boosting its shares.
SSE blamed high wholesale gas
prices and low renewable energy out-
put for a 6.1 per cent fall in adjusted
first-half pre-tax profit to £386m,
beating market forecasts of £361m.
The group’s shares rose 3.8 per cent
to 1,160p as it raised its half-year divi-
dend 6.7 per cent to 22.4p and said it
was on track for a two per cent real
rise in 2010/11 to at least 74.5p per
share.
SSE, which has 9.9m customers,
will lift household gas prices by 9.4
per cent from 1 December due to
“continuing losses” at its gas supply
business, Southern Electric Gas,
The group has put off plans to
build more gas storage due to regula-
tory uncertainty and lower profits,
but hopes to open its first nuclear
plant around 2023, it said.
Chairman Robert Smith said lower
renewable energy production and
higher gas costs had made the last six
months tough, but the group’s under-
lying performance was good.
“SSE’s key financial objective is div-
idend growth, and we are on course
to meet our target,” he said.
Bank of America Merrill Lynch said
the results were slightly above expec-
tations and underpinned medium-
term growth prospects.
SSE was expected to report profit of
£1.27bn for the year to March 2011,
against £1.29bn in 2009/10.
SSE and consortium partners GDF
Suez and Iberdrola, expect to decide
whether to build a nuclear plant
around 2015. It has put off a decision
on the Aldbrough II gas storage site
on the east coast, a joint venture with
Norway’s Statoil, due to uncertainty
about usage rules and increasing liq-
uefied natural gas import capacity in
Britain.
New UK Coal executive chairman Jonson Cox will take up his post next week
UK Coal unveils new head
amid reshuffle of its board
RESOURCES
▲
BY HARRY BANKS
BRITAIN’S biggest coal miner UK Coal
appointed Jonson Cox as its new execu-
tive chairman yesterday, as part of the
board restructuring it announced ear-
lier this year.
In July, UK Coal had said chief execu-
tive Jon Lloyd and non-executive chair-
man David Jones would leave the
company, with the company splitting
the responsibility for its coal and prop-
erty operations. The firm also said it
planned to appoint an executive chair-
man, who would be accountable for
the managing directors of the two
businesses, rather than being led by a
non-executive chairman and CEO.
Cox was chief executive of Anglian
Water Group, a provider of water and
wastewater services in the UK, for six
years and will take over his new role
from 15 November. He is currently also
a non-executive director at British
haulier Wincanton.
News 21
Finance chiefs
not concerned
by double dip
UK ECONOMY
▲
FEARS of a double-dip recession
appear to have dissipated, as UK
finance leaders say their greatest con-
cern now is how to manage their bal-
ance sheets, according to a survey
published yesterday.
Specialist recruitment firm Robert
Half said the survey of over 200 chief
finance officers (CFO) found more
than 44 per cent were worried about
managing their balance sheets while
the same number cited cash flow as a
major concern.
Over half of CFO’s (53 per cent) said
raising capital was one of their top
priorities compared to a third last
year. Meanwhile, 26 per cent said they
were looking for new investment
opportunities compared to just 11 per
cent last year.
Only one per cent were concerned
about the threat of a double-dip reces-
sion. Instead 34 per cent said they
were now more concerned about
managing growth compared to a pal-
try nine per cent last year, suggesting
greater confidence in the economy.
Phil Sheridan, managing director
of Robert Half said: “Finance leaders
are placing more emphasis on main-
taining strong accounting practices
and cash flow to capitalise on emerg-
ing opportunities, particularly in the
SME and private sectors.”
22 News
CITY MOVES | WHO’S SWITCHING JOBS
DLA Piper
The law firm said yesterday that Lord (Tim)
Clement-Jones is to become its office managing
partner in London, effective from 1 January.
Clement-Jones, currently head of interna-
tional business relations, has been with DLA
Piper since 1999. Prior to that, he was company
secretary at Kingfisher. He is also the treasurer
of the Liberal Democrats until December this
year, and was made a life peer in 1998.
Aveva appointed James Kidd to its board as
The engineering software group has its new chief financial officer, effective
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Edited by Victoria Bates
from the beginning of next year. He
replaces Paul Taylor, who has been
finance director for the past decade.
Kidd, 40, has been at Aveva since
2004, including four years as head of
finance. A chartered accountant, he
previously worked for Arthur Andersen
and Deloitte clients on transactional
and audit engagements.
GE Capital
GE Capital has named Paul Scott as the
new chief investment officer and head
of sponsor coverage for its leveraged
finance business in Europe and the
in association with
Middle East.
Scott has been at the firm for almost
three years as head of sponsor cover-
age in the UK. He has also worked in
the past at Merrill Lynch, Barclays and
Bank of Scotland.
Legal & General Property
The property fund management firm
has hired Tom Carlton as a research
analyst and Henry MacInnes as a senior
asset manager of its linked pensions
fund.
Carlton joins from Property Market
Analysis (PMA) and will focus on the
Unicredit hurt
as its trading
income drops
▲
BANKING
BY HARRY BANKS
ITALY’S UniCredit SpA will keep
investing in high-return eastern
Europe and won’t curb its investment
bank, new chief executive officer
Federico Ghizzoni said after sluggish
volumes and high tax dragged profit
below forecasts.
In his first earnings presentation
since taking over on 30 September
from Alessandro Profumo, Ghizzoni
said he did not plan to reduce the
bank’s presence in eastern Europe,
nor was he looking to cut investment
in its investment bank or in its sec-
ond-largest market Germany.
Third-quarter net profit at
UniCredit, whose network extends
into Kazakhstan, reached €334m
(£288.9m), above the previous quarter
but 15 per cent down from a year ago
and below an average analyst forecast
of €379m.
“The main reasons for the negative
deviations result from weaker-than-
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CITYA.M. 11 NOVEMBER 2010
retail sector. MacInnes, who will sup-
port linked pensions fund manager Will
Edwards, joins from Endurance Land,
where he concentrated on acquisitions,
asset management and refurbishment
opportunities around central London.
Barclays Wealth
The private bank has appointed
Andrew Corlett as chairman of the
board of its Barclays Private Clients
International (BPCI) division, based in
the Isle of Man.
Corlett is managing director of legal
and professional services group Cains.
+44 (0)20 7557 7245
morganmckinley.com
expected top-line trends in net com-
mission income and net interest
income, as well as the high tax ratio
and an increase in minorities,” said
WestLB analyst Christoph Bossmann.
“The results are not yet convincing.
As long as loan volumes remain sub-
dued and the interest rate environ-
ment remains low we forecast the
earnings recovery to be delayed,” he
added.
UniCredit ruled out a capital
increase as it said that “cumulative
retained earnings (by 1 January 2013)
will be sufficient to offset the full
impact of Basel ... even assuming no
phase-in and conservative assump-
tions on mitigation.”
The bank was forced to tap share-
holders and to scrap cash dividends
during the credit crisis, angering
Italian investors who blamed
Profumo’s risk-taking for the bank’s
woes. UniCredit said its core Tier 1
ratio, a closely-watched sign of finan-
cial strength, had inched up to 8.61
per cent.
Account Value % Difference
£117,902.86 1,079
£94,839.19 848
£90,489.98 805
£81,542.52 715
£78,606.50 686
£52,473.66 425
£47,869.00 379
£45,457.99 354
£43,810.42 338
£39,233.38 292
CITYA.M. 11 NOVEMBER 2010
YouView presses
ahead with plans
for 2011 launch
MEDIA
▲
BY STEVE DINNEEN
BBC-backed online TV service YouView
stepped up preparations for its launch
next year by officially approaching
content providers who want to join
the venture.
YouView, which will support video
and audio streaming as well as web-
based apps, is discussing the technical
implications of uploading content
from disparate providers to a single
platform.
Richard Halton, chief executive of
YouView, said: “Our ambition is to
open up the TV screen to content
providers who until now have been
unable to build an audience, bringing
viewers a brilliant choice of content.
“YouView is creating an open envi-
ronment for content providers to play
in and this will take some technical
BT wins hearing in
fight against DEA
MEDIA
▲
BY STEVE DINNEEN
THE Digital Economy Act was
hanging in the balance last night
after a judge granted a full hearing
into claims the legislation was
rushed through and could contra-
vene EU rules.
BT and TalkTalk have mounted a
legal battle against the act, which
they claim was not properly dis-
cussed before being passed during
“wash-up” – the period between
one parliament being dissolved
and another being formed.
They are particularly concerned
about a clause that could force ISPs
to suspend the accounts of users
suspected of repeatedly infringing
copyright. A hearing will now take
Cable & Wireless Worldwide wins
£10.3m government telco contract
TELECOMS
▲
BY STEVE DINNEEN
RECENTLY demerged
Cable&Wireless Worldwide (CWW)
yesterday announced a new
£10.3m contract with the
Department for International
Development (DFID).
The contract is expected to save
the government department
around £9m over the five-and-half
year term of the contract. The news
follows an £82m contract agreed
with the Foreign & Commonwealth
Office in September.
innovation. To develop the most effec-
tive processes for content providers we
need to at first work closely with a few
that can prove our model and ensure
it’s scalable. Our plan is to extend the
programme out as we start to build
common expertise.”
Ofcom last week gave the green
light to the controversial video-on-
demand service after declining to
launch a competition investigation.
Competitors including Virgin Media
and BSkyB have raised concerns it
could distort competition in the
increasingly important content on-
demand market. The platform will
allow users to stream on-demand con-
tent from a number of providers from
a single set-top box. It is backed by the
BBC, ITV, Channel 4, Five, BT, TalkTalk,
Orange and Arqiva and will allow
providers to stream pay-as-you-go as
well as free-to-air content.
place in February to debate
whether the Act needs to be
amended or scrapped altogether.
A BT spokesman said: “It is
important for everyone involved –
copyright owners, ISPs, broadband
subscribers including consumers
and businesses, and institutions
like libraries and universities – to
have certainty on the law before
proceeding.”
TalkTalk director Andrew
Heaney added: “We are very
TalkTalk director of
strategy Andrew
Heaney says the Act
was rushed through
and is badly flawed
CWW will now provide voice
services including online video and
audio communication across all of
DFID’s 44 sites.
Jim Marsh, chief executive of
Cable&Wireless Worldwide, said: “I
am delighted to announce another
important customer win in our
CWW chief execu-
tive Jim Marsh has
welcomed the win,
which he says will
benefit both parties
Media and Telecomms News 23
BEST OF THE BROKERS
ANALYSIS l Gartmore GARTMORE
NEWS | IN BRIEF
Johnston Press hits new slump
130 p Canaccord Genuity continues to rate the Regional newspaper publisher Johnston
fund manager a “sell” and has reduced its Press said yesterday its slow recovery
125
110.20 from the collapse in advertising had
120
target price from 101p to 71p. The broker been hit by the withdrawal of govern-
10 Nov
believes a 33 per cent drop in assets under ment ads, sending its shares slumping.
115
management next year is likely in the wake The group, which owns the Scotsman
110 of uncertainty caused by company veteran and the Yorkshire Post, had said in
Roger Guy’s decision to leave this week. August it expected to see some growth
16 Aug 6 Sep 24 Sep 14 Oct 3 Nov in its advertising market sometime this
year. But it said the fall in public sector
advertising, and in particular the impact
ANALYSIS l Hammerson HAMMERSON this was having on recruitment ads,
440 p UBS has downgraded the property group meant it now expected growth to hap-
420 421.20 to “neutral” from “buy” with an increased pen sometime next year but it could not
10 Nov 12-month target price of 450p thanks to predict when. The government has cut
400 its spending on advertising as part of
recent share price gains. The broker notes overall austerity cuts designed to reduce
380
the firm has few major developments the deficit.
360 scheduled until 2012 and that its focus will
16 Aug 6 Sep 24 Sep 14 Oct 3 Nov
be on acquisitions until then. Daisy buys SpiriTel for £27.3m
Telecoms firm Daisy yesterday said it
will buy rival SpiriTel in a £27.3m deal.
ANALYSIS l Betfair BETFAIR In addition, Daisy will take on £6.1m of
p SpiriTel’s existing bank debt which,
1,550
Evolution Securities has initiated coverage Daisy will refinance from its existing
of the online betting group with a “sell” rat- banking facilities. SpiriTel, which has
1,500
1,426.00 ing and a target price of £11.40. The broker been advised by FinnCap, unanimously
1,450 10 Nov recommended the offer to shareholders.
believes the current share price ignores the
1,400
financial and regulatory risks of the firm’s Matthew Riley, chief executive of Daisy,
1,350
said: “We believe this acquisition gives
expansion plans. However, Evo predicts us a strong foothold in the mid-market,
25 Oct 1 Nov 8 Nov
revenue will pass £500m by 2013. strengthening our sales team and engi-
neering force, while significantly
To appear in Best of the Brokers email your research to notes@cityam.com enhancing both our product portfolio
and customer base.”
pleased that the Court has recog-
nised that our concerns about the
copyright infringement provisions
in the Digital Economy Act should
be considered in a full hearing.
The Act was rushed through
Parliament with only six per cent
of MPs attending the brief debate
and has very serious flaws.
“The provisions to try to reduce
illegal filesharing are unfair,
won’t work and will potentially
result in millions of innocent cus-
tomers who have broken no law
suffering and having their privacy
invaded.
“We look forward to the hearing
to properly assess whether the Act
is legal and justifiable and so
ensure that all parties have certain-
ty on the law before proceeding.”
public sector business and the sec-
ond contract on our global tele-
coms framework.
“By utilising the one network,
both DFID and the Foreign &
Commonwealth Office stand to
benefit from greater collaboration
and increased efficiencies, all of
which supports the government’s
broader Public Sector Network
strategy.” CWW has said its trading
has been hit hard by the govern-
ment spending squeeze. About
£285m, or 12 per cent of CWW’s
revenue, came from UK public sec-
tor customers last year.
 City Focus
24
| Careers
Making the most
from losing a job
If the worst should happen, you
need honest friends and a fresh
perspective. But first of all, you
will need to get rid of your anger
Enjoy your freedom Picture: GETTY
OCTAVIUS BLACK
CEO OF THE MIND GYM
I
N ANY episode of Mad Men in which
Thinking about your future career? there is no infidelity, you can be sure
Take a big step forward with a professionally that someone will get fired. As the
accredited master’s degree from Glasgow insincerity oozes through Don
Draper’s “I know you’ll do well”, we imag-
Caledonian’s Graduate University College. ine the victim floundering in the harsh
world beyond Sterling Cooper. In fact,
To get the full picture come and have coffee however, they may be better off. People
and cake with our academics at the GCU London who lose their job and find another have
better health and suffer less stress than
campervan in Spitalfields Market on the those who keep their job.
following dates: Here is a plan for turning the pain of
losing your job into gain. Firstly, release
14th Nov – Tourism, Fashion and Luxury the anger. Shout, swear, cry then go for a
long run or whatever is your way of get-
21st Nov – Risk Management and ting distracted and exhausted enough to
Construction Management sleep well.
28th Nov – Banking and Finance,
Tourism and Fashion
and Luxury ODD JOBS
Serving the City its fine wine fix
*UµT
UJNF
UP
NBLF
B
CJH
DIBOHF
UP
ZPVS
DBSFFS
JASON BEDFORD
GENERAL MANAGER, THE MERCER
B
EFORE he made the move to
Threadneedle Street restaurant The
Mercer, Bedford ran restaurants such
Located in the heart of the City, as Dakota in Notting Hill, The
GCU London is a leading-edge Collection in Chelsea and Mocota in
learning environment with excellent Knightsbridge. Although he enjoys all
aspects of managing a restaurant, wine is a
industry links and partnerships. January special interest that has only intensified dur-
start ing his time in the City. “It’s a very compli-
cated subject, obviously I enjoy it, especially
available the buying and the sourcing of the wine.”
Bedford used to go to Champagne once a
To find out more: year but these days he is busier and tends to
call 0203 369 3000 work with the suppliers. “They bring sam-
email enquiries@gculondon.ac.uk ples along and we try them.” What makes it
tricky is that the quality of the wine changes
or visit www.gculondon.ac.uk with every vintage, so that the 2007 version
GCU London is a graduate college of Glasgow Caledonian University, of a wine is totally different form the 2008.
registered Scottish charity, number SC021474 With wines from the Old and the New
Worlds arriving at six-month gaps this is a
CITYA.M. 11 NOVEMBER 2010
Next, chat with honest friends who
won’t let you get away with “this really
isn’t a big deal” and “I never liked the job
anyway”. We all tend to minimise or deny
the significance of bad changes. These are
unstable foundations on which to build
our new future. A challenging voice will
help us come to terms with the reality
faster.
There will be times when it feels like
you’re stuck in a bad place from which
there is no escape, remember how you’ve
got through past disasters – if you’ve done
it before, you can do it again. Look at how
friends or people you admire emerged
from darker tunnels and let their achieve-
ments give you renewed faith.
Then it will be time to reflect on what
you really want in life. When were you at
your best? What are you really good at?
What do you want to have achieved in five
years? Let your mind wander so you con-
jure up a wide range of new dreams about
the (working) life that would make you
happiest. If you rush this you will regret it
later. Go and talk with interesting people,
walk round medieval churches or stay
with an old friend in a different part of
the country. Fresh stimulus will give you a
new perspective.
And finally, start to explore new oppor-
tunities. The bar on a beach in Jamaica
may have been appealing but securing
property rights could scupper the deal.
This is the stage to start planning and see-
ing what could work in practice.
We tend to stick with what we know.
Losing a job gives us the impetus to go out
and do what will make us fulfilled. It real-
ly can be the opportunity of a lifetime.
regular and time-consuming job, made even
more so by the fact that Bedford looks after
500 bins.
At the moment, says Bedford, people are
drinking a lot of Argentinian Malbec and
Chablis, especially a new one called Patrick
Piuze. The average price for a bottle sold at
The Mercer is £35-40 at lunchtime and £50-
55 on an evening although “we get in a good
mix, a lot of people choosing bottles for £20-
25 and a lot around the £100 mark”.
The most expensive wine he has sold was
a 1982 Margaux that went for £1,300, “but
we’ve never yet sold the magnum of Petrus,
which is on the menu for £3,100.” The mark-
up on a bottle at the top end of the list will
be around 40 per cent, he says, and closer to
70 at the bottom.
So has the City wine scene been looking
up? “It has come back a bit in the last few
months,” Bedford says, “but we are looking
forward to Christmas now, when we sell
more champagne. The bigger bottles sell
very well, especially magnums, which is the
best way to drink champagne.”
He adds that he sells a lot of vintage cham-
pagne, which is far better than non-vintage.
“The City is much more knowledgeable
about their wine than most other markets,
some customers have their own cellars, they
know what they are drinking, know what
goes with food too. If they know what they
want, I love that.”
Interview by Jeremy Hazlehurst
 Markets&Investment 25

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Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .324.90 –1.10 328.30 246.90 Cobham . . . . . . . . . . . . . . . . . . .207.20* –2.00 278.60 199.20 JPMorgan Emerg Mkts . . . . . . . .609.00 –9.00 618.00 448.00 Sage . . . . . . . . . . . . . . . . . . . . . .272.30 +1.50 286.80 208.20
3i Infrastructure . . . . . . . . . . . . . 115.40 +0.50 116.00 97.00 COLT Group . . . . . . . . . . . . . . . .120.00 –1.50 144.20 107.70 Jupiter Fnd Mgmt . . . . . . . . . . . .295.00 –5.00 310.00 180.00 Sainsbury(J) . . . . . . . . . . . . . . . .373.20 –4.00 397.00 307.60
A.B. Foods . . . . . . . . . . . . . . . . 1100.00 –7.00 1113.00 790.00 Compass . . . . . . . . . . . . . . . . . .540.50 –2.00 574.50 399.30 Kazakhmys . . . . . . . . . . . . . . . .1494.00 –59.00 1634.00 955.50 Schroders . . . . . . . . . . . . . . . . .1633.00 –34.00 1670.00 1096.00
Aberdeen Asset Man . . . . . . . . . .185.10 –3.40 191.60 111.00 Cookson . . . . . . . . . . . . . . . . . . .563.00 –13.50 616.00 364.80 Kesa Electricals . . . . . . . . . . . . .160.90 +0.40 172.40 98.45 Schroders N/V. . . . . . . . . . . . . .1283.00 –24.00 1330.00 912.50
Admiral. . . . . . . . . . . . . . . . . . .1633.00 –38.00 1721.00 1003.00 Croda Intl . . . . . . . . . . . . . . . . .1450.00 –32.00 1540.00 735.00 Kingfisher . . . . . . . . . . . . . . . . . .238.10* +0.70 255.00 196.50 Scot. & Sthrn Energy. . . . . . . . .1160.00 +42.00 1206.00 1006.00
Aegis . . . . . . . . . . . . . . . . . . . . .132.50 +1.10 137.30 103.10 Daily Mail ‘A’ . . . . . . . . . . . . . . . .562.50 –5.00 573.50 401.70 Ladbrokes . . . . . . . . . . . . . . . . .133.00* –2.00 164.60 114.60
Afren . . . . . . . . . . . . . . . . . . . . .126.50 –2.70 135.90 77.00 Davis Service . . . . . . . . . . . . . . .405.00 –8.00 442.30 356.00 Lamprell . . . . . . . . . . . . . . . . . . .385.10 –4.90 393.90 157.30 Scottish Mortgage. . . . . . . . . . . .677.00 –6.00 684.00 475.00
African Barr Gold . . . . . . . . . . . .549.00 –6.00 685.00 520.50 Debenhams . . . . . . . . . . . . . . . . .71.85 –3.05 90.00 51.95 Lancashire Hldgs . . . . . . . . . . . .617.00 +7.50 618.00 416.70 SEGRO . . . . . . . . . . . . . . . . . . . .300.10 –2.90 389.30 244.00
Aggreko . . . . . . . . . . . . . . . . . .1582.00 –14.00 1698.00 727.50 Derwent London . . . . . . . . . . . .1492.00 –13.00 1633.00 1183.00 Land Securities . . . . . . . . . . . . . .695.00 –1.50 743.50 543.00 Serco . . . . . . . . . . . . . . . . . . . . .562.00 –13.00 656.50 491.20
Alliance Trust . . . . . . . . . . . . . . .355.80 –0.40 357.50 292.80 Dexion Absolute . . . . . . . . . . . . .139.60 –0.40 148.00 131.20 Legal & General . . . . . . . . . . . . .100.70 –1.80 107.50 69.05 Severn Trent . . . . . . . . . . . . . . .1438.00 +9.00 1451.00 946.50
AMEC . . . . . . . . . . . . . . . . . . . .1099.00 –15.00 1144.00 728.00 Diageo . . . . . . . . . . . . . . . . . . . 1150.00 –5.00 1240.00 988.00 Lloyds Banking Gp . . . . . . . . . . . .67.59 –0.89 79.15 45.30 Shaftesbury . . . . . . . . . . . . . . . .437.00 –1.00 465.00 348.00
Amlin . . . . . . . . . . . . . . . . . . . . .396.00 — 437.60 357.30 Dixons Retail . . . . . . . . . . . . . . . .26.64 +0.15 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .129.60 –0.90 149.10 100.80 Shire. . . . . . . . . . . . . . . . . . . . .1496.00 +10.00 1532.00 1117.00
Anglo American . . . . . . . . . . . .2955.00 –4.00 3038.50 2210.00 Domino’s Pizza . . . . . . . . . . . . . .520.00 +0.50 522.50 278.20 London Stk Exchange . . . . . . . . .737.00 –13.50 938.50 540.50 Smith & Nephew . . . . . . . . . . . . .596.50 +2.50 700.50 532.00
Antofagasta . . . . . . . . . . . . . . .1405.00 –56.00 1470.00 755.50 Drax . . . . . . . . . . . . . . . . . . . . . .375.30 –2.50 467.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1806.00 –88.00 2198.00 1344.00 Smith(Ds) . . . . . . . . . . . . . . . . . .182.70 +1.60 185.90 103.00
Aquarius Platinum . . . . . . . . . . .380.70 –16.30 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .490.90 –2.20 515.00 319.40 Man . . . . . . . . . . . . . . . . . . . . . .291.50 –8.20 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . . 1189.00* –13.00 1297.00 930.00
ARM Holdings . . . . . . . . . . . . . . .350.30 –5.70 419.50 150.60 Easyjet . . . . . . . . . . . . . . . . . . . .464.10 –13.20 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .395.60 –10.40 431.40 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .340.50 +16.60 510.00 287.40
Ashmore . . . . . . . . . . . . . . . . . . .377.00* –4.50 400.50 215.00 Edinburgh Inv Tst . . . . . . . . . . . .454.20 –7.70 466.80 345.50 Meggitt . . . . . . . . . . . . . . . . . . . .321.20 –8.90 336.70 234.50 Spectris . . . . . . . . . . . . . . . . . . 1132.00* –4.00 1146.00 653.00
Ashtead . . . . . . . . . . . . . . . . . . .134.90 –0.10 135.60 61.25 Electrocomponents . . . . . . . . . . .252.00 –1.10 261.50 155.00 Melrose . . . . . . . . . . . . . . . . . . .295.60 –7.80 304.90 160.00
Astrazeneca . . . . . . . . . . . . . . .3064.50 –28.50 3389.50 2680.50 EnQuest . . . . . . . . . . . . . . . . . . .129.00 –5.20 138.50 87.35 Mercantile IT . . . . . . . . . . . . . . .1021.00 –7.00 1029.00 822.50 Spirax-Sarco Eng . . . . . . . . . . .1795.00* –14.00 1888.00 1060.00
Atkins(Ws) . . . . . . . . . . . . . . . . .753.00 –7.00 801.00 539.00 Essar Energy . . . . . . . . . . . . . . .543.00 +1.00 566.50 358.50 Michael Page Intl. . . . . . . . . . . . .501.50 –2.00 507.50 326.00 Spirent Comms . . . . . . . . . . . . . .152.00 –4.00 158.30 90.45
Autonomy Corp . . . . . . . . . . . .1426.00 –11.00 2012.00 1319.00 Eurasian Nat Res . . . . . . . . . . . .972.00 –37.00 1276.00 801.00 Micro Focus . . . . . . . . . . . . . . . .353.00 –11.00 550.00 272.20 Sports Direct Intl . . . . . . . . . . . . .125.50 –3.00 154.30 89.85
Aveva . . . . . . . . . . . . . . . . . . . .1454.00 –66.00 1572.00 893.00 Euromoney Inst Inv . . . . . . . . . . .671.50 +16.50 680.00 383.00 Millen & Copthorne . . . . . . . . . . .545.50 –9.00 585.00 329.20 SSL Intl . . . . . . . . . . . . . . . . . . . 1163.00 — 1190.00 634.00
Aviva . . . . . . . . . . . . . . . . . . . . .416.50* –6.60 428.70 290.20 Experian . . . . . . . . . . . . . . . . . . .725.00 –10.50 763.50 559.00 Misys . . . . . . . . . . . . . . . . . . . . .297.10 –1.10 300.00 196.60 St James’s Place . . . . . . . . . . . . .263.90 +1.50 298.00 203.40
Babcock International . . . . . . . . .578.50 –17.50 660.50 489.00 Ferrexpo . . . . . . . . . . . . . . . . . . .357.40 –14.00 396.20 166.90 Mitchells & Butlers . . . . . . . . . . .348.90 +0.40 351.60 242.50 Stagecoach. . . . . . . . . . . . . . . . .215.00 –2.20 226.10 138.40
BAE Systems . . . . . . . . . . . . . . .359.40* +10.90 389.90 288.10 FirstGroup . . . . . . . . . . . . . . . . .398.80 –4.50 428.40 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .197.10 –6.90 248.60 187.60 Standard Chartered . . . . . . . . . .1888.50 –25.00 1975.00 1316.50
Balfour Beatty . . . . . . . . . . . . . . .285.10* +0.60 304.80 228.60 Foreign & Col Inv Tst. . . . . . . . . .295.40 –4.30 300.00 250.00 Mondi . . . . . . . . . . . . . . . . . . . . .509.50 –16.00 562.00 304.70 Standard Life . . . . . . . . . . . . . . .229.40* –3.30 238.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .289.60 –7.40 394.25 253.40 Fresnillo . . . . . . . . . . . . . . . . . .1396.00 –52.00 1455.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .344.00 –5.20 349.70 265.00 SuperGrp . . . . . . . . . . . . . . . . .1200.00 –11.00 1312.00 499.00
Barratt Development . . . . . . . . . . .83.60 –1.75 149.90 75.50 G4S . . . . . . . . . . . . . . . . . . . . . .250.60 –3.00 285.70 238.70 Morrison Wm . . . . . . . . . . . . . . .273.60 +1.10 307.10 255.00 TalkTalk . . . . . . . . . . . . . . . . . . .139.60 — 153.80 106.60
BBA Aviation . . . . . . . . . . . . . . .206.30 –1.20 220.00 145.90 Genesis Emerging Mkts Fd . . . . .538.00 –2.00 542.50 383.00 Murray Intl Tst . . . . . . . . . . . . . . .913.00* –10.50 938.50 720.00 Talvivaara Mining . . . . . . . . . . . .570.00 +20.00 597.00 341.40
Bellway. . . . . . . . . . . . . . . . . . . .553.50 –4.50 838.00 510.00 GKN . . . . . . . . . . . . . . . . . . . . . .176.20 –3.30 188.40 100.40 National Express. . . . . . . . . . . . .250.50 –3.50 261.30 155.86 Tate & Lyle . . . . . . . . . . . . . . . . .527.50 –2.00 534.50 388.00
Berkeley . . . . . . . . . . . . . . . . . . .841.50 –6.00 917.50 735.00 GlaxoSmithKline . . . . . . . . . . . .1238.00* +2.50 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .583.00 +7.50 607.65 474.80
BG . . . . . . . . . . . . . . . . . . . . . .1277.00 –5.00 1302.50 966.90 Great Portland Estates . . . . . . . .345.00 –2.40 368.60 261.60 Next . . . . . . . . . . . . . . . . . . . . . 2118.00 –22.00 2361.00 1816.00 Taylor Wimpey . . . . . . . . . . . . . . .25.93 +0.14 46.34 22.12
BHP Billiton . . . . . . . . . . . . . . .2410.00 –59.00 2489.00 1678.00 Greene King . . . . . . . . . . . . . . . .436.60 +2.20 484.00 372.50 Northumbrian Water . . . . . . . . . .346.30 –5.60 364.00 232.50 Telecity . . . . . . . . . . . . . . . . . . . .468.00 +16.00 546.00 323.50
BlackRock Mining . . . . . . . . . . . .727.00 –10.50 737.50 490.00 Halfords . . . . . . . . . . . . . . . . . . .420.80 –4.80 562.50 370.10 Ocado Grp . . . . . . . . . . . . . . . . .138.60 –2.40 169.00 120.90 Templeton Emrg Mkts . . . . . . . . .680.00 –5.00 688.00 470.00
BlueBay . . . . . . . . . . . . . . . . . . .481.50* +0.10 495.00 251.00 Halma . . . . . . . . . . . . . . . . . . . . .334.70 — 345.50 221.80 Old Mutual . . . . . . . . . . . . . . . . .132.50* +0.10 146.90 95.30 Tesco . . . . . . . . . . . . . . . . . . . . .413.15* –0.15 454.90 368.40
Bluecrest Allblue GBP . . . . . . . . .173.20 +1.10 174.00 151.00 Hammerson . . . . . . . . . . . . . . . .421.20 –8.50 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .219.90 –7.60 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .186.20 +1.70 277.20 167.50
Booker . . . . . . . . . . . . . . . . . . . . .54.50* –1.00 56.00 37.50 Hargreaves Lansdown . . . . . . . .497.10 +13.60 502.50 259.40 Pearson . . . . . . . . . . . . . . . . . . .962.50 –10.00 1069.00 812.00 Travis Perkins . . . . . . . . . . . . . . .882.50* –7.50 915.00 647.50
BP . . . . . . . . . . . . . . . . . . . . . . .445.45 –9.00 658.20 296.00 Hays . . . . . . . . . . . . . . . . . . . . . . 113.20* –2.60 125.30 82.50 Pennon . . . . . . . . . . . . . . . . . . . .628.00 –3.00 644.00 449.90 TUI Travel . . . . . . . . . . . . . . . . . .205.70 –0.60 313.90 189.20
Brit Insurance . . . . . . . . . . . . . .1042.00 –2.00 1052.00 709.00 Henderson . . . . . . . . . . . . . . . . .135.20 –2.90 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .370.80* –1.20 520.00 335.90 Tullett Prebon . . . . . . . . . . . . . . .397.40* –3.60 427.00 261.20
British Airways . . . . . . . . . . . . . .272.80 –5.50 290.00 180.20 Heritage Oil. . . . . . . . . . . . . . . . .370.20 +17.80 585.00 295.90 Petrofac . . . . . . . . . . . . . . . . . .1522.00 –18.00 1545.00 900.00 Tullow Oil . . . . . . . . . . . . . . . . .1248.00 +17.00 1375.00 979.50
British Amer. Tob . . . . . . . . . . .2416.00 –17.50 2490.50 1832.00 Hikma Pharma . . . . . . . . . . . . . .791.00 –2.00 813.00 462.70 Petropavlovsk . . . . . . . . . . . . . .1020.00 –7.00 1370.00 834.00 UK Commercial Prop. . . . . . . . . . .77.65 –0.40 84.90 71.00
British Empire Tst . . . . . . . . . . . .489.70 –3.40 495.20 338.50 Hiscox . . . . . . . . . . . . . . . . . . . .355.40 –1.60 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .674.00 –1.00 775.00 550.50 Ultra Electronics . . . . . . . . . . . .1732.00 –33.00 1903.00 1198.00
British Land . . . . . . . . . . . . . . . .501.00* –10.00 525.00 416.00 Hochschild Mining . . . . . . . . . . .540.00 –29.50 571.50 220.00 Premier Farnell . . . . . . . . . . . . . .283.80 +0.30 290.00 150.50 Unilever . . . . . . . . . . . . . . . . . .1860.00 –37.00 2024.00 1662.00
Britvic. . . . . . . . . . . . . . . . . . . . .477.10 –0.60 518.00 354.30 Home Retail . . . . . . . . . . . . . . . .214.90 +2.30 326.30 201.70 Premier Oil . . . . . . . . . . . . . . . .1770.00 +3.00 1780.00 984.00
Brown(N.) . . . . . . . . . . . . . . . . . .283.50 –8.00 308.00 204.80 Homeserve . . . . . . . . . . . . . . . . .426.90 –4.60 502.00 414.90 Provident Financial . . . . . . . . . . .733.50* –0.50 983.50 728.00 United Utilities . . . . . . . . . . . . . .622.00 +2.00 632.00 447.40
BSkyB . . . . . . . . . . . . . . . . . . . .727.00* –1.00 737.00 521.00 HSBC Hldgs . . . . . . . . . . . . . . . .689.60 –4.80 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .623.00 –7.50 665.00 475.70 Utd Business Media . . . . . . . . . .673.50 –9.00 692.00 408.30
BT . . . . . . . . . . . . . . . . . . . . . . .159.40 +0.20 165.50 108.40 Hunting . . . . . . . . . . . . . . . . . . .655.50* –3.00 663.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .391.50 +3.00 406.80 231.70 Vedanta Resources . . . . . . . . . .2339.00 –72.00 2967.00 1795.00
BTG . . . . . . . . . . . . . . . . . . . . . .260.00 — 270.80 150.00 ICAP . . . . . . . . . . . . . . . . . . . . . .494.00 +5.60 501.50 291.70 Randgold Resources. . . . . . . . .6160.00 –105.00 6755.00 4126.00 Victrex . . . . . . . . . . . . . . . . . . .1284.00 –5.00 1355.00 753.00
Bunzl . . . . . . . . . . . . . . . . . . . . .729.50 –4.00 784.50 614.00 IG . . . . . . . . . . . . . . . . . . . . . . . .513.50 –15.00 560.00 312.60 Reckitt Benckiser . . . . . . . . . . .3575.00 +16.00 3667.00 2997.00 Vodafone . . . . . . . . . . . . . . . . . .173.40 –0.60 179.90 126.50
Burberry . . . . . . . . . . . . . . . . . . .999.00 –28.00 1065.00 555.50 Imagination Tech Gp . . . . . . . . . .409.30 –2.60 445.00 200.00 Reed Elsevier . . . . . . . . . . . . . . .537.00 –1.00 566.00 454.60 Weir . . . . . . . . . . . . . . . . . . . . .1665.00 –44.00 1720.00 660.00
Cable & Wire Comms . . . . . . . . . .50.20 –1.75 150.00 46.51 IMI . . . . . . . . . . . . . . . . . . . . . . .827.50 –21.00 855.50 483.10 Regus . . . . . . . . . . . . . . . . . . . . . .83.70 +0.60 125.50 64.05 Wellstream Hldgs . . . . . . . . . . . .752.50 –2.00 810.00 429.70
Cable & Wire Wwide . . . . . . . . . . .70.00 –1.00 94.80 60.05 Imperial Tobacco. . . . . . . . . . . .2007.00 –23.00 2159.00 1728.00 Renishaw . . . . . . . . . . . . . . . . . 1193.00 –1.00 1250.00 479.00 WH Smith . . . . . . . . . . . . . . . . . .467.50 –0.80 551.00 392.20
Cairn Energy. . . . . . . . . . . . . . . .379.50 –6.80 497.60 306.80 Inchcape. . . . . . . . . . . . . . . . . . .336.00 –11.70 358.00 235.00 Rentokil Initial . . . . . . . . . . . . . . . .90.55 –0.80 140.20 89.40 Whitbread . . . . . . . . . . . . . . . . .1769.00* –28.00 1807.00 1225.00
Caledonia Invs . . . . . . . . . . . . .1804.00 –15.00 1833.00 1496.00 Informa . . . . . . . . . . . . . . . . . . . .439.10 –3.50 450.50 263.30 Resolution . . . . . . . . . . . . . . . . .246.50 –2.50 280.50 220.10 William Hill . . . . . . . . . . . . . . . . .161.00* –3.00 217.80 158.00
Capita . . . . . . . . . . . . . . . . . . . . .730.50 –10.00 829.50 693.00 Inmarsat . . . . . . . . . . . . . . . . . . .705.00 — 831.00 603.50 Rexam . . . . . . . . . . . . . . . . . . . .315.60 –1.90 348.80 271.40 Witan Inv Tst . . . . . . . . . . . . . . . .485.50 –3.90 492.00 397.30
Capital & Counties . . . . . . . . . . .150.10 +0.10 159.00 99.60 Intercontl Hotels . . . . . . . . . . . . 1100.00 –40.00 1244.00 803.00 Rightmove . . . . . . . . . . . . . . . . .783.00* –2.00 830.00 456.90
Capital Shopping Centres . . . . . .385.60 –4.90 523.50 300.10 Intermediate Capital . . . . . . . . . .341.20 –9.70 352.80 233.50 Rio Tinto . . . . . . . . . . . . . . . . . .4333.00 –121.00 4477.50 2751.00 Wolseley . . . . . . . . . . . . . . . . . .1775.00 –42.00 1837.00 1155.00
Carillion . . . . . . . . . . . . . . . . . . .352.70* –2.10 361.90 272.00 Intertek . . . . . . . . . . . . . . . . . . .1932.00* –13.00 1953.00 1136.00 RIT Capital Partners . . . . . . . . .1138.00 –14.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .466.30 –7.80 476.20 279.60
Carnival . . . . . . . . . . . . . . . . . .2709.00 –41.00 2937.00 1963.00 Intl Personal Fin . . . . . . . . . . . . .325.00 –4.00 340.90 181.40 Rolls Royce . . . . . . . . . . . . . . . .588.00* –18.50 661.50 460.90 WPP . . . . . . . . . . . . . . . . . . . . . .744.00 –5.50 758.50 561.00
Catlin . . . . . . . . . . . . . . . . . . . . .354.30 –5.60 394.60 303.20 Intl Power . . . . . . . . . . . . . . . . . .427.90 –6.30 438.10 256.30 Rotork . . . . . . . . . . . . . . . . . . .1746.00 –22.00 1906.00 1101.00 Xstrata . . . . . . . . . . . . . . . . . . .1368.50 –39.00 1417.00 832.50
Centamin Egypt . . . . . . . . . . . . .192.20 –4.90 202.80 103.50 Invensys . . . . . . . . . . . . . . . . . . .313.20 –9.00 350.30 224.90 Royal Bank Of Scot . . . . . . . . . . . .42.16 –1.59 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica . . . . . . . . . . . . . . . . . . .336.20* +1.90 347.00 243.00 Investec . . . . . . . . . . . . . . . . . . .515.00 –6.00 565.00 411.50 Royal Dutch Shell A . . . . . . . . .2036.00* –27.00 2106.50 1621.00
Charter Intl . . . . . . . . . . . . . . . . .722.00 –5.00 855.50 563.50 ITV . . . . . . . . . . . . . . . . . . . . . . . .69.70 –1.75 73.00 46.77 Royal Dutch Shell B . . . . . . . . .2001.50* –21.00 2071.00 1550.00 * Ex-Dividend † Suspended
Chemring . . . . . . . . . . . . . . . . .2832.00 –30.00 3711.00 2551.00 Jardine Lloyd Thompson. . . . . . .589.00 –1.50 604.50 420.70 RSA Insurance . . . . . . . . . . . . . .128.90* –1.30 137.40 114.10
Close Bros . . . . . . . . . . . . . . . . .818.00* –3.50 834.00 657.00 Johnson Matthey . . . . . . . . . . .1925.00 –45.00 1999.00 1435.00 SABMiller . . . . . . . . . . . . . . . . .2037.00 +14.00 2103.00 1638.00 www.interactivedata.com

FTSE 100 falls after gloomy Wall Street rises as

import data and debt worries dollar hits new high
after recent gains. Also Boeing halted test flights of “The US yield curve has steepened,
THELONDON “[Investors are] uneasy given ongo-
ing concerns over... Ireland, and
its long-delayed 787 Dreamliner air-
liner on Wednesday after a test flight THENEW YORK and since the whole world has had
the same position on, we’ve got a lot

REPORT there is also some weakness in met-

als pulling the FTSE back,” Mic Mills,
head of electronic trading at ETX
powered by Rolls-Royce’s latest Trent
1000 engine made an emergency
landing in Texas after smoke
REPORT of end-of-the-year, risk management
going on,” said Sebastien Galy, senior
currency strategist at BNP Paribas.
Capital, said. appeared in the cabin. The euro fell as low as $1.3671 and

B T
RITAIN’S top share index fell to “The downward momentum from Supermarket group J Sainsbury HE dollar hit a one-month high was last changing hands at $1.3777,
a one-week closing low yester- yesterday appears to be still in evi- dropped 1.1 per cent, handing back yesterday after data pointed to barely lower on the day.
day, pressured by miners on dence this afternoon as investors some of its recent gains, after meet- an improving US labour market The dollar climbed as high as 82.79
fears over softening demand look to take some profit from the ing first-half profit forecasts. while Wall Street rose as Japanese yen, up more than 1.0 per
from China after downbeat import recent rally,” he said. Scottish and Southern topped the investors set aside recent worries cent, and last traded at 82.23.
data, with worries about Ireland’s Borrowing costs in Ireland have FTSE 100 leader board, up 3.8 per whether a rally would continue. A decline in initial US jobless
debt also darkening the mood. reached record highs this week as cent, after the electricity generator But global stocks fell as Ireland’s claims had some analysts suggesting
The FTSE 100 closed down 58.25 Dublin plans to push through hefty reported half-year results and raised borrowing costs hit another euro life- the American economy was starting
points, or one per cent, at 5,816.94. spending cuts and tax hikes in an its dividend, with BofA Merrill Lynch time high and investors worried that to gain traction after months of slug-
The index ended up 0.4 per cent on effort to convince investors it is not upgrading its recommendation on a Federal Reserve move announced gish growth.
Tuesday at 5,875.19, having briefly on the verge of financial meltdown. the stock to “buy”. last week to buy $600bn in Treasury US stocks gained as rising oil prices
broken through the 5,900 level for Meanwhile the Bank of England BAE Systems gained 3.1 per cent as debt to bolster the US economy may lifted energy shares and banks
the first time since June 2008 earlier said there was uncertainty among its Investec reiterated its “buy” rating have unintended consequences. rebounded after suffering three per
in the session. Monetary Policy Committee on the following a “bullish” investor day The dollar extended gains as a rise cent losses over the past two sessions.
Miners retreated after a recent economic outlook for the UK. presentation. in US bond yields for most of the ses- The Dow Jones industrial average
advance sparked by the Federal British inflation will fall below tar- sion prompted traders to reduce bets closed up 10.29 points, or 0.09 per
Reserve’s decision to pump more get in two years’ time, the BoE fore- ANALYSIS l FTSE against the greenback. cent, at 11,357.04.
cheap money into the economy, led cast, but said the outlook was highly 5,816.94 Oil prices soared to their highest The Standard & Poor’s 500 Index
down by platinum miner Lonmin, uncertain and it stood ready to 6,000 10 Nov level in 25 months, breaking their gained 5.31 points, or 0.44 per cent, at
off 4.7 per cent, as metals prices fell. change policy in either direction. recent strong inverse correlation with 1,218.71.
5,800
Sentiment surrounding the sector Aero-engine maker Rolls-Royce the dollar. The Nasdaq Composite Index rose
was soured after data showed shed 3.1 per cent after Singapore 5,600 Investors have sold dollars in recent 15.80 points, or 0.62 per cent, at
October import growth in China, the Airlines said it will replace the Trent months and bet that the Fed’s plans 2,578.78.
world's biggest consumer of metals, 900 engines on three of its Airbus 5,400 to pump more money into the US US Treasuries slid in volatile trade
was slower than expected. Investors A380 planes after finding oil stains 5,200
economy to boost growth would drive after a weak auction of 30-year gov-
were looking ahead to Chinese CPI on them, almost a week after already low US rates even lower. So ernment debt, although bargain
data, due to be released last night. Australian rival Qantas grounded its 5,000 far, those expectations have been frus- hunting pulled bonds off the day’s
16 Aug 6 sep 24 Sep 14 Oct 3 Nov
Oil stocks and banks also fell back A380 fleet after a Trent 900 blow-out. trated. lows and led a rebound.
 26 Investment | Listed Products CITYA.M. 11 NOVEMBER 2010

Making money
out of the East
isn’t that easy
China’s economic ing to get exposure to China have tended
to have to buy stocks listed on the Hong
miracle is real, but it Kong stock exchange. Several firms offer
exchange traded funds (ETFs) with signifi-
is still not fully open cant exposure to China based on Hong
Kong stock exchange indices. Both db x-
to British investors, trackers and iShares offer ETFs linked to
the FTSE Xinhua China 25 index, which is
made of Hong Kong listed shares.
says Daniel Knowles Recently, however, investors have also
been offered more direct access to Chinese
equities. Credit Suisse offers an ETF linked
to the CSI 300 index, which tracks the

D
AVID Cameron is not having an easy
time in China. Instead of idle rheto-
ric about trade and cooperation,
Cameron’s visit has been overshad-
owed by human rights concerns, by global
imbalances, and, perhaps most surprising-
ly, by a dispute over the symbolism of the
poppy. China is one of the world’s most
exciting countries, but it is also one of the
most difficult for Westerners such as
Cameron to access. The growth rates may
look stunning, but investors need to be
very careful.
Certainly China has witnessed an eco-
nomic miracle. It has grown at a rate of 9.3
per cent for the last twenty years and its
current account surplus this year should
total around $250bn (£156bn). The
Chinese government has celebrated by
spending tens of billions of dollars on dra-
matic jamborees – £20bn on the Beijing
Olympics, £38bn on the Shanghai World
Expo – and for many, the austerity of the
communist economy seems to have gone
for good. Rising real incomes, a growing
middle class and steady economic liberali-
share prices of the most liquid Chinese
companies listed on the Shanghai and
Shenzhen stock exchanges. Stocks listed
on Chinese mainland exchanges have
tended to be much more volatile, but they
have also offered higher returns.
Perhaps even more important than
returns is the fact that Credit Suisse’s
fund offers exposure to different sectors of
the Chinese economy. Unlike developed
world ETFs, ETFs available in China are
arguably not particularly well balanced.
Both the CSI 300 and the FTSE Xinhua 25
have large concentrations of financial
stocks for example – both of around 47 per
cent. The Xinhua 25 offers a lot of expo-
sure to telecoms, however, while the CSI
300 has more industrial and energy
stocks.
Unfortunately, neither offers much
access to the consumer sectors or to small
sized firms – both of whom ought to do
ANALYSIS l The relative performance of the FTSE Xinhua All-Share index and ANALYSIS l The breakdown of the CSI 300 index SECTOR %
the FTSE Xinhau 25 index Energy 11
375
Rebased Index Values

sation all make China look like a fantastic

FTSE Xinhua All-Share Index
Material 9
place to invest. 325
FTSE Xinhua China 25 Index
But unfortunately, investing in China is Consumer Discretionary 6.5
375
not easy. Growth has been concentrated in
infrastructure, manufacturing and heavy
Consumer Staples 4.1
225
industry, all sectors dominated by large Utilities 3.3
government firms. The Chinese govern- 175
ment has restricted access to the Chinese Healthcare 2.9
stock market, keeping investors out of 125 SECTOR %
many of the most successful parts of the Financial 47.9 IT 1.5
75
economic miracle. Source: FTSE
Industrials 12.4 Telecom 1.4
Thanks to that, British investors want- Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Source: CSI
CITYA.M. 11 NOVEMBER 2010
David Cameron has
been finding it easier to
tap into Chinese cham-
pagne than into
Chinese demand
Picture: PA
well over the next decade. Consumer
goods make up just 1.63 per cent of the
Xinhua 25. Though it looks unlikely
that much will be achieved at the G20
meetings starting today, most accept
that China needs to rebalance its econo-
my towards a higher level of consump-
tion, and so the difficulty of investing in
consumer goods producers ought to be
frustrating.
That is if consumer industries ever
take off, however. Vitaliy Katsenelson, at
Investment Management Associates,
argues that China is in fact suffering
from acute overinvestment in industrial
capacity. He describes China as “the
mother of all grey swans”, citing danger-
ous demographics and an unhealthy
reliance on government driven growth.
If he is right, lack of access may not be
an altogether bad thing for investors.
China is now the world’s second
largest economy, and investors would be
silly to ignore the opportunities that it
offers. But despite over two decades of
reform, China is still a very difficult and
risky economy for Westerners to venture
into. David Cameron has been learning
that, but investors will have to too.
LISTED PRODUCT NEWS
JESSICA MEAD
SOURCE ENTERS SWISS ETF MARKET
Source entered the Swiss ETF market earlier
this week with the listing of 15 exchange-
traded commodities (ETC) on the SIX Swiss
Exchange. Source has initially listed 14 T-
ETCs (Treasury Bill-secured ETCs) that track
S&P GSCI total return commodity indices
and one physical gold P-ETC that tracks the
spot gold price and is secured by gold bullion
held in J.P. Morgan Chase Bank’s London
vaults. The annual fixed fee for all T-ETCs is
0.49 per cent a year while the Source
Physical Gold P-ETC has a fee of 0.29 per
cent a year.
NEW RBS EMERGING MARKETS AUTOCALL
Barclays Stockbrokers clients get exclusive
access to RBS’s new Emerging Markets
Autocall Accelerator until 15 November. It
is a five-year fixed-term investment with
exposure to the MSCI Emerging Markets
Index. Investors will receive a return of 20
per cent after two years, if the level MSCI
Emerging Markets Index is higher than or
at the original closing level. If it is lower
than the original level, then the investment
continues for its full five-year term and
investors’ returns are dependent on the per-
formance of the underlying index.
Investment | Listed products
TRIPLE LEVERAGED ETCS LAUNCHED
ETF Securities yesterday announced that it
had launched 16 Triple Long and Triple
Short Currency exchange-traded currencies
(ETC). These are the first triple leveraged
currency ETCs in Europe. They track the
triple long and triple short versions of
Morgan Stanley’s MSFX indices. The triple
leveraged currency ETCs are at least 100
per cent collateralised and the maximum
possible loss is the value of the initial invest-
ment, ETF Securities said. The products will
be supported by multiple market makers
and carry an annual fee of 0.98 per cent.
27
Sainsbury’s has solid THE
fundamentals, not least
in its property portfolio TIPSTER
Picture: REX
A RARE OPPORTUNITY
TO BUY SAINSBURY’S
T
he supermarket Sainsbury’s recently
saw a dip in its share price, offering a
rare buying opportunity for spread
betters. Thanks to its immense prop-
erty portfolio, Sainsbury’s is still preferred
over competitors like Tesco. Capital CFDs
quotes a price of 373.4p-374.0p.
The G20 meeting in South Korea is now
underway and the world is hoping for
some sort of consensus about how to
tackle currency wars. Systematic change
is rarely achieved overnight, however, so
the market's demand for safe haven assets
is likely to continue for some time yet.
Investor’s saferooms have been gold lined
for a while now, but as the metal gets
more expensive, many have started look-
ing to silver. The price had rallied by more
than 50 per cent over the last three
months but dropped some due to profit
taking earlier in the week. Any suggestions
of further quantitative easing could well
push the price back up again. IG Index
offers a spread on daily spot silver of
$27.42-$27.45.
Royal Bank of Scotland dived some 10
per cent after breaking disappointing
news about earnings last Friday.
Worryingly for RBS, the shares are below
all the major moving averages, and also
below a significant trendline support that
had been in place since January. The bank
could well slide a further 10 per cent to
the next big support at 39p. Spread Co
offers a spread on the rolling daily price of
43.60p-43.68p.
The mining company Randgold report-
ed bumper results on Tuesday, selling
$116.3m of gold and doubling their operat-
ing profits to $30.1m. With the commodi-
ties rally looking set to continue, and the
shares in a rising uptrend since March,
Randgold looks like an excellent buy. A
reasonable target to aim for might be the
eight month price channel top of 6,500p.
Spreadex quotes a rolling spread of
Randgold Resources of 6,153.8p-6,171.2p.
Nobody wants to catch the proverbial
falling knife but Alstom certainly looks like
it might be about to hit the ground. The
power generator has lost 31 per cent in
the year to date, including 7 per cent in
the last week. The fundamentals are
strong however, with the firm holding a
substantial order book and benefiting from
resilient margins in the maintenance and
service divisions. Capital Spreads offers a
spread on the rolling daily price of Alstom
of 34.18p-34.33p.
After seeing the third quarter results, it
looks like wise traders should sell
Unicredit. The Italian bank has suffered
from lower than expected investment
income and core revenues are still suffer-
ing in the low interest environment. Good
results are not expected until 2013High
taxes in particular have made for disap-
pointing results. IG Index offers a spread
of 173.53p-173.87p.
Daniel Knowles
ETF Securities offers a
new way to leverage
your trading
Picture: GETTY
 28 Investment | Listed Products
Five reasons for investing with ETFs
In spite of recent
criticism they should
still form part of an
investor’s portfolio,
writes Jessica Mead
I
T HAS not been an easy few weeks
for exchange-traded products (ETP).
First, analysts as good as wrote off
physically backed industrial metal
exchange-traded commodities (ETCs)
before they had even been launched. And
earlier this week, an American report
from the Kauffman Foundation criticised
ETPs, arguing they might pose a greater
threat to the markets than high frequen-
cy trading.
Authors Harold Bradley and Robert E
Litan point to the ease with which ETFs
can be short-sold as well as the conse-
quences of a short squeeze on ETFs. The
industry is still digesting the report,
which has already come in for a fair
share of criticism.
European investors should remember
that the ETP market this side of the pond
is different to its American counterpart
in size, structure, and complexity. Like
any investment product, ETPs should be
treated with their fair share of caution
but they still offer investors plenty of
advantages.
1. TRANSPARENCY
ETPs are listed on a stock exchange,
which means they can be traded in the
same way as a share and do not have the
opacity of many over-the-counter prod-
ucts. For example, you get continuous
pricing of an ETP and real-time execution
means that you know the price you are
paying for the product.
Many providers of physical ETFs now
list all the securities that they hold and
this is updated on a daily basis. Providers
that have taken the synthetic approach
have also increased their commitment to
become more transparent: they are now
clearer about what counterparty expo-
sure owners of swap-based ETFs have and
whether the ETF is fully collateralised or
not.
2. LIQUIDITY
ETFs are praised for their ability to give
Europe’s largest
ETF Securities gold
– World’s exchange
largest
Exchangecommodities
traded Traded Currency platform
• ETFS Physical Gold (PHAU) – AUM $5.2bn*
• ETFS Gold Bullion Securities (GBS) – AUM $5bn*
*AUM figures as at 29th June 2010
you more liquid exposure to illiquid mar-
kets. Providers argue that the real liquid-
ity of an ETF is the liquidity that a market
maker is available to provide given how
liquid the underlying securities are.
While it is true that most ETFs in
Europe are very liquid, such liquidity
may be more difficult to find if Europe
follows America down the route of
increasingly specialised and esoteric
products.
The Kauffman report warns “just
because small cap companies that may
individually be illiquid are wrapped up
in an ETF, which itself becomes liquid,
does not make those stocks liquid”.
3. DIVERSIFICATION
Under Ucits III, European ETFs (excluding
those from Switzerland) are subject to
much more stringent diversification
rules than their US counterparts. Ucits
dictates that no individual constituent
should represent more than 20 per cent
of a fund’s net asset value, a figure that
can be relaxed to 35 per cent at the regu-
lator’s discretion.
Consequently, you will never be
exposed to single-stock risk if you invest
through an ETP and you get a more
CITYA.M. 11 NOVEMBER 2010
attractive balance of risk and return than Use ETFs as building index-tracking mutual fund and 1.77 per
if you invested in a concentrated portfo- blocks to create a cent for an actively managed mutual
lio. By spreading investments across vari- diversified portfolio fund, according to Morningstar data.
ous assets, the expected return can be However, investors considering ETFs
achieved with less risk, according to Picture: GETTY need to be aware that rebalancing costs
BlackRock’s ETF division iShares. and volatility can affect how accurately
the ETF tracks the underlying index. Any
4. ACCESSIBILITY
For the average retail investor, it is diffi-
difference between the two can be con-
sidered a cost.
Investors should also bear in mind that
cult to gain exposure to the performance the transaction fees for buying and sell-
of stock markets on the other side of the ing ETFs far outstrip the costs (if any) of
world. However, ETPs can provide the funds. For example, Barclays Stockbrokers
building blocks of your portfolio, allow- will charge frequent traders £6.95 per
ing you to allocate to the full range of online trade while ETF trading costs at
asset classes including corporate bonds, Hargreaves Lansdown start from £9.95.
property and single country indices
tracking markets like Vietnam.
This allows you to create a portfolio
with both core and more esoteric invest-
ANALYSIS l European ETP historical quarterly flow
12,000
Source: Deutsche Bank
30%
ments with ease. You can also choose 10,000 25%
between single country indices or region- 8,000 20%
al indices to tailor your exposure.
€million
6,000 15%
4,000 10%
5. COST
One of the main attractions of ETPs is
2,000
-
5%
0%
that they are cheaper than actively man- 2,000 -5%
aged funds. On average, the average total
expense ratio (TER) of an equity ETF is 0.4
per cent compared to 0.82 per cent for an Equity
Q2-09
Fixed Income
Q3-09 Q4-09
Commodity
Q1-10 Q2-10 Q3-10
Quarterly growth in AUM% - (right axis)
• Brought by the management team who invented Gold ETFs/ETCs
•
•
100% LBMA ‘Good Delivery’1 investment grade bars
Traded and settled as a share through your stock broker or bank2
•
•
Open ended and can be created and redeemed to demand
Multiple market makers and traded in USD, EUR and GBP on
all major Exchanges
• Physical delivery available
• Part of the ‘Exchange Traded Gold’ stable a World Gold Council initiative
For more information T: +44 (0) 20 7448 4330
www.etfsecurities.com
The advertisement is issued by ETF Securities Marketing LLP (“ETFSM”) and is intended for and directed towards
persons who are considered professional investors (as defined in the UK Financial Services and Markets Act or its
equivalent under applicable law or regulation in the relevant jurisdiction) and have professional experience in investing.
It has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 (“the Act”)
by Flow Traders B.V.PHAU is issued by ETFS Metals Securities Ltd (MSL). GBS is issued by Gold Bullion Securities
Ltd (GBS). MSL and GBS are each regulated by the Jersey Financial Services Commission. The United Kingdom
Listing Authority (UKLA) is the ‘home regulator’ for purposes of listing and passporting the prospectus under the
Prospectus Directive.
The products in this advertisement may or may not be suitable for a particular investor.
You should obtain your own independent financial, taxation and legal advice before making
any decisions about any investment. Investment in the products discussed carry with it
certain risks, including those set out in the relevant prospectus, which can be obtained from
the ETFSM at +44 (0)20 7448 4330 or info@etfsecurities.com. All codes listed above are
for the London Stock Exchange.
1 ‘Good Delivery’ as defined by the LBMA in relation to the standard of gold bars.
Please see prospectus for more information.
2 Brokerage fees may apply.
CITYA.M. 11 NOVEMBER 2010 Lifestyle | TV& Games 29

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders: BBC News
8pm Watchdog
9pm Have I Got News for You
9.30pm CHOICE Reggie Perrin
10pm BBC News
10.25pm Regional News
10.35pm Question Time
11.35pm This Week: Holiday
Weatherview
12.30am Sign Zone: Are You Paying
Too Much Tax?: Panorama: Alleged
chaos inside HM Revenue & Customs.
1am Sign Zone: Countryfile 1.55am
Sign Zone: Olympic Dreams 2.50am
Sign Zone: Antiques Roadshow
3.50am Sign Zone: Restoration
Roadshow 4.20am-6am BBC News
6pm Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm CHOICE The Culture
Show: The work of war artist
Henry Tonks.
8pm Nigella Kitchen
8.30pm Autumnwatch 2010
9.30pm Autumnwatch
Unsprung
10pm Never Mind the
Buzzcocks
10.30pm Newsnight. With
Kirsty Wark: Weather
11.20pm The Culture Show
12.20am The Apprentice:
You’re Fired!
1.05am BBC News 4am-6am BBC
Learning Zone
6pm London Tonight
6.30pm ITV News
7pm Emmerdale
7.30pm The Cost of Caring:
Tonight
8pm Emmerdale
8.30pm Coronation Street
9pm Monte Carlo or Bust
10pm ITV News at Ten
10.30pm London News
10.35pm FILM Memphis Belle:
Drama, starring Matthew
Modine. 1990.
12.30am The Zone; ITV News
Headlines
2.30am FILM Matchstick Men:
Comedy, with Nicolas Cage. 2003.
4.30am The Jeremy Kyle Show
5.20am-5.30am ITV Nightscreen
6pm The Simpsons 6pm Home and Away
6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Channel 4 News 7pm Five News at 7
7.55pm 4thought.tv 7.30pm Jaguar Adventure with
8pm River Cottage Every Day Nigel Marven: Five News
9pm CHOICE Britain’s Trillion Update
Pound Horror Story 8pm Battle of Arnhem: Tour of
10.30pm True Blood Duty: Five News at 9
11.40pm Rory Peck Awards 9pm FILM Heartbreak Ridge:
2010 Action adventure, directed by
11.45pm Reaper and starring Clint Eastwood. REGGIE PERRIN
12.40am King of the Hill 1986. BBC1, 9.30PM
1.05am King of the Hill 1.30am The success of the new product range
Coppers 2.25am Unreported World. 11.40pm The World of Stupid
Criminals leaves Reggie with a difficult decision,
2.50am Dispatches 3.40am What
the Green Movement Got Wrong 12.10am SuperCasino which could result in redundancy for
4.50am What the Green Movement 4am House Doctor 4.25am How some of his colleagues.
Got Wrong: The Debate 5.30am- Not to Decorate 5.10am Michaela’s
6.15am Countdown: With Colin Wild Challenge 5.35am-6am
Jackson. Michaela’s Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT 3.50am Charmed 4.40am CSI: 1.20am Scrubs 2.10am Misfits DISCOVERY HOME &
SATELLITE & CABLE

Crime Scene Investigation 3.05am Glee 3.50am Reno 911!

7pm Sky Sports News at Seven
7.30pm SPL Round-Up 8pm The
Rugby Club 9pm Ringside
Special 10pm Time of Our Lives
11pm Premier League Review
12am Ringside Special 1am Live
NFL 4.30am Time of Our Lives
5.30am-6am Premier League
World
SKY SPORTS 2
6.30pm Premier League Review
7.30pm Live Premier League
Snooker 11pm Race World
12am Urban Ride 12.30am
Karting 1am-4.30am Premier
League Snooker
SKY SPORTS 3
6pm Live PGA Tour Golf 9pm
European Tour Golf 11pm Golfing
World 12am The Rugby Club
1am Race World 2am Urban
Ride 2.30am Karting 3am ATP
Tour Uncovered 3.30am Golfing
World 4.30am Urban Ride 5am-
6am Live European Tour Golf
5.25pm Live Fencing 7.15pm
International One-Day Cricket
8.45pm Fight Club 11.30pm
Strongest Man 12.30am-
12.45am WATTS
ESPN
6.45pm Goal! 7.15pm ESPN
Scottish Premier League
Kicks 7.30pm ESPN Premier
League Kicks 7.45pm Live Serie
A 9.45pm ESPN Scottish
Premier League Kicks 10pm
MMA Live 10.45pm Ultimate
Fighting Championship 11.45pm
Motor Racing 1.45am ESPN
Premier League Kicks 2am Live
Major League Soccer 4.30am-
5am Goal!
LIVING
7pm Private Practice 8pm
Drop Dead Diva 9pm Nikita
10pm Chuck 11pm Criminal
Minds 1am CSI: Crime
Scene Investigation 3am
America’s Next Top Model
5.30am-6am Home Shopping
BBC THREE
7pm Doctor Who 7.45pm
Doctor Who Confidential 8pm
EastEnders: The Greatest
Weddings 9pm Kara Tointon:
Don’t Call Me Stupid 10pm
EastEnders 10.30pm Russell
Howard’s Good News 11pm
Family Guy 11.45pm Freak Like
Me 12.15am EastEnders: The
Greatest Weddings 1.15am
Russell Howard’s Good News
1.45am Kara Tointon: Don’t Call
Me Stupid 2.45am Sex
Trafficking in Cambodia –
Stacey Dooley Investigates
3.40am Lip Service 4.40am-
5.10am Freak Like Me
E4
7pm Hollyoaks 7.30pm Friends
9pm The Big Bang Theory
9.30pm How I Met Your
Mother 10pm Misfits 11.05pm
FILM The Omen 1976.
4.10am Switched 4.30am HEALTH
7pm Baby Whisperer 8pm 10
Accidentally on Purpose
4.50am-6am Switched Years Younger 9pm I Didn’t
Know I Was Pregnant 10pm
HISTORY Strange Sex 11pm I’m Pregnant THE CULTURE SHOW
7pm How the Earth Was Made and Anorexic 11.30pm I’m
8pm Ice Road Truckers 10pm Pregnant and Bi-Polar 12am
BBC2, 7PM
Andrew Graham-Dixon remembers
America: The Story of the US I Didn’t Know I Was Pregnant
1am Strange Sex 2am I’m war artist Henry Tonks, and Mark
11pm Decoding the Past 12am
Ice Road Truckers 1am Life Pregnant and Anorexic 2.30am Kermode celebrates the 50th
After People 2am Evolve 3am I’m Pregnant and Bi-Polar 3am anniversary of Peeping Tom.
Mega Disasters 4am-5am 10 Years Younger 4am Bringing
Ancient Discoveries Home the Babies 5am-6am
From Here to Maternity
DISCOVERY
8pm How Do They Do It? The SKY1
creation of an artificial reef. 7pm The Middle 7.30pm The
8.30pm How It’s Made 9pm Simpsons 8pm Modern Family
I Shouldn’t Be Alive 10pm 8.30pm The Simpsons 9pm An
Deadliest Catch 1am Bear Grylls: Idiot Abroad 10pm A League of
Born Survivor 2am Chris Their Own 11pm NCIS: Los
Barrie’s Massive Speed 3am Angeles 12am Road Wars 1am BRITAIN’S TRILLION POUND
World War Two: The Complete UK Border Force 2am Road HORROR STORY CHANNEL4, 9PM
History 3.50am Clash of the Wars 2.55am Oops TV 3.20am With the UK in an estimated
Dinosaurs 4.40am Days That Lost 4.20am Sell Me the £4.8trillion of national debt, Martin
Shook the World 5.30am-6am Answer 5.10am-6am Are You Durkin explores the full extent of the
How Does That Work? Smarter Than a 10 Year Old? financial crisis.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
16 4 23 13 3 15 41 28 
21 26

16 10
Place the numbers from 1 to 9 in each empty cell so that each 42  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 17 16
19 38 15
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 4 24 17
  
above or to the left of it. 10 20
You can only use the digits 1-9 11 15    
   and you must not use the
7 9
45  
same digit twice in a block.
   The same digit may occur 27 6 
11 30
   more than once in a row or
column, but it must be in a
9
22
12
18
15

8 21
  separate block.
8 9 6 
17 29
    29 12


  ACROSS DOWN
3 Arranging at intervals (7) 1 Russian soup,
  
   WORDWHEEL I F
6 Abstract form of painting
that produces dramatic
visual effects (2,3)
with a beetroot
juice base (6)
2 Confused mixture
Using only the letters in the Wordwheel, you have
   ten minutes to find as many words as possible,
T O 7 Convenient facility (7)
of things (7)
3 Remains (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters T 8 Digress (5)
10 Difficult to understand,
4 Puzzled (8)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
S R obscure (8) 5 Spice used on top
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E B 13 Massive (4)
of rice pudding (6)
9 City in north-eastern
15 Epic tale (4)
QUICK CROSSWORD 1 3 4 1 2 1 5
Scotland (8)

2 / $ = < 6 8 6 $ 1
6 5 8 9 7 3 8 9 SUDOKU         
17 Wizard (8)
11 Definite article (3)
2 1 4 1 7 2          19 Mammary gland
9 ( 2 / 2
9 4 6 7 8 8 4 9 12 Small fish (7)
( 5 $ 7 2 $ ' / , %          of bovids (5)
5 5 2 0 $ 1 2 9 8 8 1 3 5 6 9 3 7 14 Loan shark (6)
         20 Free from tears (3-4)
& 2 1 ( 6 * 8 ( 6 7 7 8 9 3
        
2
$ / ,
1
$ 6 %
*
/ $
7
' (
1 3 5
8 7 9
3 6
9 7
2 4
5 8
1
3
WORDWHEEL          21 Basic unit of money
16 First light (6)
7 ' , $ * 5 $ 0 5          in Jordan (5) 18 Reddish colour often
6 : ( / / , 6 $ $ & 4 2 8 8 4 9 The nine-letter word associated with
9 1 6 3 5 1 2 4          22 Storehouse for
$ 9 1 = 8
7 2
was SCHEDULED          good health (5)
& 2 / / ( $ * 8 ( 3 9 2 6 7 9 threshed grain (7)
 30 Lifestyle | ING Discerning Eye 2010 CITYA.M. 11 NOVEMBER 2010

Left, Fragile
Existence by David
Harrison, £3,760.
Right, Courtyard –
Japonica by Judith
Cain, £2,200.

ART
need is
All you

Above, Future Vision by Marie Mackay, £600;

below right, Visitation: grey and gold, by Paul Newland, £800;
below, Ellie by Anastasia Pollard, £2,500.

Above, Girl with fish by Jhuma Sharma

Roy, £450; below, Darnety by Keren
Luchtenstein, £1,900.

Above, Sweet Song by Margaret Ashman, £185.

CITYA.M. 11 NOVEMBER 2010 Lifestyle | ING Discerning Eye 2010 31

Left, Untitled by
Susan Fynes, £750.
Right, Figure in pur-
ple, yellow and
green by Marcus
West, £105.

TIMOTHY BARBER
SELECTOR FOR ING DISCERNING EYE 2010
The ING Discerning Eye exhibition is at The
Mall Galleries, The Mall, SW1Y 5BD, until
21 November. Entrance is free.
www.discerningeye.org
O
N Tuesday night this week the
Dutch bank ING hosted a pri-
vate view for the annual art
event it sponsors, the ING
Discerning Eye exhibition, which fea-
tures the works on this page among
hundreds of others. Focussing on
small works – small enough for easy
hanging in the home – the exhibition
is a giddy swirl of colour, styles, tech-
niques and talents.
At the event I noticed a guest close-
ly inspecting a haunting night-time
streetscape by the painter Selwyn
Leamy. He explained the picture
reminded him of a long walk home
he’d made as a young man after miss-
ing his last train one night, when
he’d found his irritation at having to
make the journey suddenly dissipat-
ed by the realisation of how beautiful
deserted suburbia looked by the glow
of street lamps. He told me he’d
decided to buy the painting.
I found this heartening for two rea-
sons. One, it’s the reason people
should buy art – the fact that it
evokes a personal response, whatever
form that may take, is far more
important than, say, its investment
prospects or the fact that it might “go
well” in a particular room. It should
be an expression and reflection of
the buyer’s tastes, outlook and experi-
ence as much as the artist’s.
Second, because Leamy is one of 41
artists I selected to take part. This is
the 19th annual Discerning Eye show,
and each year a different panel of
selectors – two artists, two collectors,
two critics – invite artists to exhibit, as
well as sifting through thousands of
works submitted directly from people
across the country. This year it’s been
my privilege to take a place on the
panel (as a critic, since you ask).
It’s been a stirring, inspiring expe-
rience. Each selector gets their own
section of the show – there’s no col-
laborative element to fall back on –
which they must fill with around 100
works. It gives you a view of the cre-
ative, visionary talent that, away
from headlines and trends, bubbles
away constantly and quietly, making
artworks that will mean something
to someone somewhere, and make a
house a home.

Above, In the
balance by Angela
Smith, £200; far
right, Sunrise over
St Paul’s by Edward
Haddon, £495;
right, Green bottle
and jar on a narrow
shelf by Susan
Angharad Williams,
£4,800.
 Sport
Foden wants England to be
film stars against Australia
England and Northampton full-back hoping to repeat
Sydney victory at Twickenham, says Frank Dalleres
E
NGLAND full-back Ben Foden
may have close links with the
world of pop music, but video
is his preferred form of enter-
tainment. Well, one recording in par-
ticular: that of the landmark victory
over Australia in Sydney in June.
Foden – currently dating a mem-
ber of girl band The Saturdays –
admits he has pored over that 21-20
win on several occasions since
returning from a tour on which he
and a clutch of other emerging
young backs cemented their place in
Martin Johnson’s team. At the time
Finn sees the funny side as he
prepares for Ashes sledging
▲
CRICKET
BY JAMES GOLDMAN
ENGLAND pace bowler Steven Finn
has a simple message for those
Aussies lining up to question his
Ashes credentials: Bring it on.
The 6ft 8in Middlesex seamer came
in for some stick from the notoriously
opinionated Australian crowd during
England’s warm-up victory in Perth
last week.
Speaking ahead of England’s sec-
ond tour match against South
Australia, which starts today, Finn
revealed he would revel in the “ban-
ter” that goes towards making the
Ashes such a special occasion. “We
the Northampton star declared it the
greatest moment of his career but, as
he prepares to face the gold and
green ranks again on Saturday,
Foden says a repeat in front of a
packed home crowd would taste
sweeter still.
“To win at Twickenham would be
special for me. It was good to beat
them in their back yard but this is a
massive game for us. We have to hit
the ground running,” he tells City
A.M. Of his cherished recording, he
adds: “I watched it when I came back
from the tour and have done every
copped a bit of abuse at the WACA
last week in that last innings. It’s
something we’re prepared for, we’ll
embrace and we’re going to try to
enjoy,” he said.
“You can see the funny side when
people are chirping you. It’s part of
what we have to expect as interna-
tional cricketers, and to be able to
deal with that is important.”
Finn failed to fire in the opening
tour match, but hopes to find his
rhythm over the course of the next
three days.
He said: “I’m 21 years old, and
understand that I’m going to be
inconsistent now and again. But it’s
important that I don’t settle for that.”
ESSIEN MARKS COMEBACK
WITH GOAL AND RED CARD
EVENTFUL RETURN FOR MIDFIELDER
AS CHELSEA EXTEND LEAD: P34
now and then. But there are things
we can improve on – we are by no
means the finished article.”
Foden, 25, endured a bittersweet
occasion last weekend, when his first
Test start at Twickenham ended in
an ultimately hard-fought 16-26
defeat to New Zealand.
“I will always remember it because
it was such a big game, but we did
lose and as a professional sportsman
that is not what I’m here to do,” says
Foden. “We showed a lot of guts by
coming out in the second half and
chasing New Zealand hard. But we
learned that we need to play for the
full 80 minutes.”
If the more generous observers
could have put England’s defeat to
All Blacks down to rustiness, Foden
insists there will be no room for such
THE BEST OF ASHES SLEDGING
l Merv Hughes to Graeme Hick: “Mate, if you
just turn the bat over you’ll find the instructions
on the other side.”
l Aussie fan to Phil Tufnell: “Tuffers, can I bor-
row your brain? I’m building an idiot.”
l Rod Marsh and Ian Botham: Marsh: “How’s
the wife and kids?” Botham responds: “The
wife’s fine – the kids are retarded.”
l Mark Waugh and Jimmy Ormond: Waugh:
“What are you doing here? You’re not good
enough to play for England.” Ormond: “That may
be true, but at least I’m the best in my family.”
Foden made his
first home start in
last weekend’s
defeat to New
Zealand.
Picture: PA
excuses against the Wallabies. “Last
week was our first game of the
autumn,” he says. “There is nothing
we can palm off our performance on
in this game.”
Tickets for the Investec International
between England and Samoa on Saturday
20 November at Twickenham are available
from £25 for adults and £10 for under 16s
via www.rfu.com/tickets or 0844 8472492.
SPORT | IN BRIEF
Pakistan board suspends Haider
CRICKET: The future of Pakistan wicket-
keeper Zulqarnain Haider was thrown
into further doubt yesterday after the
Pakistan Cricket Board suspended his
central contract. Amid fresh suggestions
that the 24-year-old had applied for asy-
lum in Britain, the PCB took the step in
response to Haider’s decision to leave
Pakistan’s current series against South
Africa early, claiming it represented a
violation of his contract. A PCB state-
ment read: “The PCB has suspended the
contract of Mr Zulqarnain Haider for vio-
lating terms and conditions. PCB is trying
to get in touch with Mr Haider but the
attempts to contact him have so far
remained unsuccessful.”
Murray edges past Nalbandian
TENNIS: Britain’s Andy Murray is
through to the third round of the ATP
Masters 1000 event in Paris following a
2-6 6-4 6-3 win over David Nalbandian.
Murray was broken twice in the first set,
but took the second after breaking in the
33
Sarries hope
to show that
plastic really
is fantastic
▲
EXCLUSIVE
BY JAMES GOLDMAN
SARACENS chief executive Edward
Griffiths believes the club’s plan to
play on an artificial surface from next
season will produce a far more enter-
taining brand of rugby.
The club yesterday announced its
plans to leave Watford’s Vicarage
Road and build a new £10m stadi-
um – fit to host rugby and athletics –
at Barnet Copthall in north London.
Sarries hope to move in for the
start of next season, subject to gain-
ing approval from the London
Borough of Barnet, with an artificial
pitch, to be installed at a cost of
£500,000, central to their plans.
“Artificial turf will take the game
forward in this country,” said
Griffiths, who confirmed the 3G sur-
face, which would be the first of its
kind to be used by an English rugby
club, will comply with IRB rules.
“The traditional view held by many
people is that sport and technology
don’t sit hand in hand. This is a clear
example of when it does.
“We can no longer tolerate playing
a sport on pitches which are frozen in
the winter and barely have a blade of
grass on them come the end of the
season. That’s not conducive to any
sort of entertainment.
“Obviously, the fact that it will cost
less to maintain came into considera-
tion. Clearly you don’t have to mow it.
But we also want to make sure we are
building a community venue that can
be used all year round.
“By going ahead with an artificial
pitch we can guarantee that, as well
as ensuring a safer and more enter-
taining sport is on offer for our fans.”
Meanwhile, Watford last night con-
firmed Saracens will leave Vicarage
Road next summer, regardless of
whether their move to Barnet
Copthall goes ahead.
final game of the set. Murray was trou-
bled by a wrist injury in the decider, but,
after receiving treatment, kept his com-
posure to close out the match with a late
break. Murray faces Croatian Marin Cilic
next round and played down the signifi-
cance of his wrist complaint. He said: “I
hit the half-volley and felt a sharp pain
up my wrist. I’ve had a couple of prob-
lems there in the past so I got a little bit
scared. At the end of the match it felt
okay. We’ll see when I cool down.”
All Blacks appeal Mealamu ban
RUGBY UNION: New Zealand will appeal
the four-week ban handed out to Keven
Mealamu after the hooker was adjudged
to have headbutted England captain
Lewis Moody during last weekend’s 26-
16 win at Twickenham. “He is not a dirty
player, he never has been. This is a case
we’ll go to the death on,” said All Blacks
assistant coach Steve Hansen. “Everyone
knows it’s not in his nature to do that and
everyone knows if Kevvy says he didn’t
do it, he didn’t do it.”
 34 Sport | Football CITYA.M. 11 NOVEMBER 2010

Results
BARCLAYS PREMIER LEAGUE
Aston Villa....................(1) 3 Blackpool............................(1) 2
Chelsea ...........................(1) 1 Fulham .................................(0) 0
Late red card
sours boost
Everton ..........................(0) 1 Bolton...................................(0) 1
Man City .......................(0) 0 Man Utd ..............................(0) 0
Newcastle....................(0) 1 Blackburn...........................(1) 2
West Ham .....................(1) 2 West Brom.........................(1) 2
Wigan..............................(0) 1 Liverpool.............................(1) 1
Wolverhampton ......(0) 0 Arsenal.................................(1) 2
P W D L F A GD Pts
Chelsea 12 9 1 2 28 5 23 28

to Chelsea’s
Man Utd 12 6 6 0 24 13 11 24
Arsenal 12 7 2 3 24 11 13 23
Man City 12 6 3 3 15 10 5 21
Newcastle 12 5 2 5 21 16 5 17
Bolton 12 3 7 2 18 17 1 16
Tottenham 12 4 4 4 14 15 -1 16
Sunderland 12 3 7 2 12 13 -1 16

title charge
Liverpool 12 4 4 4 13 15 -2 16
Aston Villa 12 4 4 4 13 16 -3 16
West Brom 12 4 4 4 16 21 -5 16
Everton 12 3 6 3 13 11 2 15
Blackburn 12 4 3 5 13 14 -1 15
Blackpool 12 4 2 6 19 26 -7 14
Fulham 12 2 7 3 13 13 0 13
Stoke 12 4 1 7 13 18 -5 13
Birminghm 12 2 6 4 14 17 -3 12
Wigan 12 2 5 5 9 21 -12 11
Wolves 12 2 3 7 11 20 -9 9 wait; I want to watch the replay
West Ham 12 1 5 6 11 22 -11 8
NPOWER CHAMPIONSHIP
CHELSEA 1 before doing anything.”
Fulham manager Mark Hughes
Leicester........................(1) 2 Sheff Utd............................(2) 2 was wholehearted in his support
Reading...........................(1) 1 Cardiff..................................(0) 1
Swansea........................(0) 0 Bristol City ........................(1) 1
P W D L F A GD Pts
FULHAM 0 for Atkinson’s decision, and cited
an apparent injury to Chelsea strik-
QPR 16 9 7 0 30 7 23 34 er Didier Drogba as a distraction to
Cardiff 16 10 3 3 29 14 15 33 his defenders in the build-up to
▲

Swansea 16 9 2 5 21 13 8 29
PREMIER LEAGUE
BY FRANK DALLERES Essien’s goal.
Derby 16 8 3 5 29 17 12 27
Norwich 16 7 4 5 23 21 2 25 “The guy has jumped in with two
Coventry 16 7 3 6 24 21 3 24 CHELSEA manager Carlo Ancelotti feet, so it’s a straight red,” he said.
Ipswich 16 7 3 6 19 18 1 24 leapt to the defence of Michael “As for the goal, that’s a disappoint-
Leeds 16 7 3 6 28 30 -2 24 Essien after the midfielder’s match- ment. We were distracted by
Burnley 16 5 8 3 25 19 6 23
Reading 16 6 5 5 24 18 6 23 winning heroics were soured by a Drogba lying prone in the box. You
Nottm For 16 5 8 3 19 16 3 23 straight red card in stoppage time. still have to play to the whistle, so
Doncaster 16 6 5 5 26 25 1 23 Essien notched the only goal of maybe we were guilty of expecting
Watford 16 6 4 6 29 26 3 22 the game, and extended the Blues’ the referee to blow up. He didn’t
Portsmouth 16 6 4 6 22 22 0 22
Millwall 16 5 5 6 20 20 0 20 lead at the top of the table to four and we paid the penalty.”
Scunthorpe 16 6 2 8 19 23 -4 20 points, when he met Salomon Victory saw Chelsea equal a club
Leicester 16 5 4 7 21 29 -8 19 Kalou’s left-wing cross with a bullet record of nine consecutive clean
Barnsley 16 5 4 7 20 28 -8 19 header on the half-hour mark. sheets at Stamford Bridge, while
Middlesbro' 16 5 2 9 17 25 -8 17
Bristol City 16 4 5 7 16 25 -9 17 But the Ghanaian blotted his the draw in the Manchester derby
Sheff Utd 16 4 4 8 12 22 -10 16 copybook in the dying moments at Eastlands allowed the Blues to
Hull 16 3 6 7 12 21 -9 15 when he appeared to leap in two- stretch their gap. Ancelotti added:
Preston 16 4 2 10 22 33 -11 14 footed on Fulham’s Clint Dempsey, “The Manchester result was good
Crystal Pal 16 4 2 10 18 32 -14 14
prompting referee Martin Atkinson for us, though, to be four points
JOHNSTONE'S PAINT TROPHY NORTHERN to send him off. clear. That’s a good gap. Nothing is
SECTION QUARTER-FINAL
Essien now faces a three-match decided, but that’s a good gap. We’d
Sheff Wed....................(2) 4 Hartlepool..........................(1) 1
ban, meaning he would miss fix- like to stay there in that position.”
CLYDESDALE BANK PREMIER LEAGUE tures against Sunderland, Essien was sorely missed by
Dundee Utd .................(0) 1 St Mirren ............................(1) 2
Hearts..............................(1) 2 Celtic.....................................(0) 0 Birmingham and Newcastle, but Chelsea in Sunday’s 2-0 defeat at
Kilmarnock..................(1) 3 Hamilton.............................(0) 0 Ancelotti hinted the club may Liverpool, and proved his worth last
Motherwell .................(3) 4 St Johnstne......................(0) 0 appeal Atkinson’s decision, insist- night with the goal and a typically
Rangers .........................(0) 0 Hibernian ...........................(2) 3 ing the challenge was harmless. tireless performance. He, Salomon
THE IRN-BRU SCOTTISH FOOTBALL LEAGUE “I don’t like to judge the deci- Kalou and Didier Drogba all threat-
CHAMPIONSHIP THIRD DIVISION sion,” he said. “But maybe it wasn’t ened to increase the lead, while
East Stirling ................(1) 1 Arbroath.............................(1) 3 a red card because Essien made a Dempsey and Zoltan Gera tested
strong tackle, but on the ball. There Petr Cech from distance late on.
TODAY’S DIARY was not a risk on the opponent. I Michael Essien
Blue Square Bet Premier
Wrexham v Luton (7.45pm) ....................................................................................
think he went for the ball, the last
ball of the game, an important ball. TOP FOUR scored the only
goal as Chelsea
CRICKET “I’m not sure it was a sending-off. TEAM PLD W D L F A PTS stretched their lead
Tour Match—day 2 of 3: South Australia v England I’d like to see it again but directly, Chelsea 12 9 1 2 28 5 28 in the table, but
(Adelaide). on the pitch, I didn’t think it was a was later sent off.
Man Utd 12 6 6 0 24 13 24
dangerous tackle. I hope we won’t
SPORTS EDITOR FRANK DALLERES lose him for three games – that Arsenal 12 7 2 3 24 11 23 Picture: GETTY
email sport@cityam.com would be a problem. We have to Man City 12 6 3 3 15 10 21

Spain and Qatar back under Modric: Cattermole could

microscope after note fiasco have finished my career
PREMIER LEAGUE Cattermole learned to curb their
▲

aggression in order to protect the safe-

luded to help each other win the punishment from the ethics com- TOTTENHAM midfielder Luka Modric ty of their fellow professionals.
▲

WORLD CUP BID

BY FRANK DALLERES 2018 and 2022 votes respectively,
it has been interpreted by some
SURREPTITIOUS note passing may as evidence of foul play.
sound like harmless classroom mis- Suggestions of a conspiracy
chief but it is threatening to wreak between the two countries were
serious damage on Spain, England’s already being investigated by
rivals to host the 2018 World Cup. the world governing body’s
It was confirmed yesterday that the ethics committee before the
Spanish member of Fifa’s executive meeting in question, and the
committee, Angel Villar Llona, passed note incident threatens to muddy
a note to his Qatari colleague, the waters further.
Mohamed bin Hammam, (right) dur- But Chuck Blazer, the USA’s execu-
ing a meeting last month that read: tive committee member and the man
“Congratulations, we are going to who verified the note’s existence,
win”. insisted it was no smoking gun.
Against a backdrop of allegations Blazer said he believed it referred
that Spain and Qatar may have col- not to winning the bid, but escaping
mittee. “It is more likely the note
referred to the subject that the
previous conversation had been
about,” said Blazer. “That discus-
sion had been about the ethics
committee and the fact that
nobody had provided any hard
evidence. It’s the type of thing
that shouldn’t have happened
but nothing more than that.”
England’s bid looks to have lost
ground to its main rivals in the run-
up to the vote, which takes place on
2 December. Russia had been seen
as the biggest threat but a joint bid
from Spain and Portugal has gath-
ered momentum.
has let rip at Sunderland midfielder
Lee Cattermole, accusing the England
Under-21 international of endanger-
ing his career.
Cattermole, who has been warned
by his own manager to clean up his
act having already been sent off twice
this season, was involved in an ugly
flashpoint midway through the sec-
ond-half of Tuesday’s 1-1 draw at
White Hart Lane.
The 22-year-old left Modric nursing
a swollen knee after a studs-up chal-
lenge, for which he only received a
yellow card from referee Howard
Webb, and the Croatia playmaker
believes it is high time the likes of
“Players who tackle like that need
to think before making a tackle
because they can ruin careers of
friends and professionals,” he said.
“He should have been sent off. I
can’t show you now but there is a big
swelling on my knee and he should
have got a red card but the referee
decided differently.
“When you see tackles like that, it
is a little upsetting, and if they are
not punished properly then even
more so.
“I jumped and if I stayed with my
legs on the floor it would have been
even worse. Thank God everything
finished well.”
CITYA.M. 11 NOVEMBER 2010
Tempers fray on
X-rated night for
top-flight stars
Chelsea hero Essien is shown a
straight red card for a two-footed,
off-the-ground tackle on Fulham’s
Clint Dempsey
Wolves’ Stephen Ward is carried
off on a stretcher after a late tack-
le from Arsenal captain Cesc
Fabregas that sparked controversy
Arguably the Manchester derby’s
most notable action was when ex-
United star Carlos Tevez (left)
squared up to old colleague Rafael
Piquionne scored but it was not enough for West Ham.
Chamakh at the double as Arsenal
and Fabianksi bounce back in style
WOLVES 0
ARSENAL 2
▲
PREMIER LEAGUE
BY JAMES GOLDMAN
ARSENAL manager Arsene Wenger
saluted the performance of two-goal
hero Marouane Chamakh after the
Gunners bounced back from
Sunday’s defeat against Newcastle.
The Morocco international scored
after just 37 seconds – the fastest goal
Arsenal have ever scored in the
Premier League – and capped an
impressive display with an injury-
time clincher.
Chamakh, a free signing from
Bordeaux in the summer, made a
strong start to life in red and white,
but had failed to score away from
home in the league, and had been
withdrawn after an hour at the week-
end.
But he was back with a bang last
night, much to Wenger’s delight.
He said: “Chamakh was not sharp
against Newcastle and I only played
him for an hour after he had been
sick for all the previous week.
“I thought he would be sharper
Ferguson frustrated as derby fails to live up to billing
MANCHESTER CITY 0 home as the target before the game.
MANCHESTER UTD 0 do that,” said Ferguson.
PREMIER LEAGUE
▲
MANCHESTER UNITED boss Sir Alex
Ferguson bemoaned two points
dropped after a hotly anticipated
derby ended in stalemate.
United enjoyed the better of an
anticlimactic evening at Eastlands
but failed to severely test Joe Hart and
paid for it by slipping further behind
leaders Chelsea. “It’s a decent result
Picture: ACTION IMAGES
tonight. If you look back since the
start of season, he has been decisive
in many games.”
Wenger was also delighted with
the performance of much-maligned
goalkeeper Lukasz Fabianski, who
responded to Sunday’s costly error
with a string of fine saves.
Wenger said: “Fabianski had great
game and I’m pleased as it shows he
has the mental strength to do it.
but we don’t count draws away from
Our target is to win the game and I
think we had enough possession to
“Some of our football was good, we
were good on the ball but we needed
to create openings to win the match
and we only really made two which
was difficult.”
United’s most dangerous moment
came when full-back Patrice Evra
(right) charged into the Manchester
City penalty area but could only
shoot at Hart.
Dimitar Berbatov was responsible
for the visitors’ only other notable
chance, the Bulgarian executing an
Ibanez piles the pressure
on struggling Hammers
WEST HAM 2 decent fist of life in the Premier
WEST BROM 2 signing Peter Odemwingie scored
PREMIER LEAGUE
▲
WEST HAM remain rooted to the bot-
tom of the table after Pablo Ibanez’s
strike 20 minutes from time helped
West Brom snatch a point from Upton
Park.
With Blackpool coming to town on
Saturday, manager Avram Grant
would have hoped to have boosted his
side’s survival chances with maxi-
mum points from successive home
games against newly promoted sides.
Sport| Football
“We went early into the lead and
the victory was so important for us
tonight that the focus was on defend-
ing and keeping the result safe.”
The main talking point came mid-
way through the second half when
Arsenal skipper Cesc Fabregas
launched into a heavy tackle on
Stephen Ward which saw the Wolves
player leave on a stretcher.
Fabregas made a point of apologis-
overhead kick that found
the goalkeeper ideally posi-
tioned.
City, who now trail
Chelsea by seven points and
United by three but retain
their grip on fourth place,
threatened briefly through
Carlos Tevez, the former Old
Trafford striker testing Edwin
van der Sar with a free-kick.
They might even have
snatched victory at the death
but full-back Pablo Zabaleta
blazed over from a promising
position.
Roberto Mancini, the
City manager, rejected
But Albion have been making a
League and they stunned Upton Park
in the 38th minute when summer
from the spot after Luis Boa Morte
bundled over Steven Reid in the penal-
ty area.
Captain Scott Parker equalised five
minutes later with a rasping 25-yard
drive – his fifth goal of an increasing-
ly impressive season.
And a first home league win since
September looked to be on the cards
when Frederic Piquionne put the
Hammers ahead from the spot at the
start of the second half.
But Ibanez had the last laugh, pow-
ering home Chris Brunt’s deep cross
at the far post.
35
Chamakh made the
points safe late on
having earlier put
his side ahead with
a powerful header.
Picture:
ACTION IMAGES
ing to Ward after the game and
Wenger insisted that there was no
malice in the challenge.
He said: “I think it was an acciden-
tal tackle. That’s what Cesc told me.
He wanted to play the ball.”
Wolves boss Mick McCarthy added:
“It wasn’t a bad tackle. I have no prob-
lem with it. What I do have a problem
with is when people bitch about my
players making a tackle.”
suggestions his team had failed to
show enough desire, for a home
side, to win the game.
“I wanted to win this game
but sometimes it is better to
draw than lose. We played the
game to win, though,” said the
Italian. City were stung by late
United goals repeatedly last sea-
son and Mancini added: “I
think it was a difficult game
for both teams. I think the
result is correct but we improved
from last year because we didn’t
concede a goal in the last
minute. I prefer one point to
zero points, which was the case
last season.”
Rodallega ruins
Liverpool’s run
HUGO RODALLEGA’S second-half lev-
eller prevented Liverpool from
recording a fourth straight league
win. Fernando Torres had stroked the
Merseysiders ahead, but the
Colombian’s 52nd minute effort
earned Wigan a deserved 1-1 draw.
Liverpool’s local rivals, Everton,
required a 94th minute Jermaine
Beckford strike to earn a 1-1 draw at
home to Bolton, who had taken the
lead 11 minutes from the end through
Ivan Klasnic. Andy Carroll kept his
goalscoring run going for Newcastle,
but couldn’t prevent the Magpies slip-
ping to a 2-1 home defeat by
Blackburn – Jason Roberts scoring
the winner. Finally, James Collins was
the unlikely hero as Aston Villa beat
Blackpool by the odd goal in five.