FTSE 100 t5,766.80 -109.02 DOW t12,759.15 -203.66 NASDAQ t2,910.32 -40.16 /$ 1.57 t -0.02 / 1.20 unc /$ 1.

20 unc /$ 1.31 t -0.01

Banks: stop
FSAs block
on credit
BANKS have hit out at the City watch-
dog for introducing new rules that are
crippling the flow of credit to small
firms, according to a secret document
seen by City A.M.
In a sign of frustration at the FSAs
hyper-strict regime, banks have called
on a special government taskforce to
intervene and curb what they see as an
over-zealous approach.
The banks blame the FSA for mak-
ing it harder to sell on bundles of
small business debt to investors, cut-
ting off a major source of credit.
The Cabinet Office has summoned
senior bankers to a pre-Budget meet-
ing on how regulation is affecting
lending, suggesting that banks argu-
ments could gain traction as the coali-
tion becomes desperate for growth.
The document, sent to the Breedon
Taskforce in the department for busi-
ness late last month, points the finger
at the FSA for destroying large parts of
the small business (SME) credit mar-
ket. In failing to create a clear and
transparent framework for unrated
issuance [of bundled SME debt], regula-
tors are effectively constraining bank
lending capacity to those borrowers
who need it most, the paper says. In
recent instances, investors have
walked away from transactions due to
regulatory uncertainty.
It claims that resolving the uncer-
tainty would have a substantial
impact on credit supply and cost.
The paper also criticises the FSA for
being inflexible on how banks assess
the riskiness of SME loans. The FSA
declined to comment. MORE: P7
BRAZILS economy is now bigger
than the UKs, making it the second
emerging market to enter the top-
tier of world economies and herald-
ing the beginning of the end of
Western economic dominance.
Britains star is fading fast the
country now has the seventh biggest
economy in the world, down from
fourth in 2005, thanks to the long
booms in China and Brazil.
The International Monetary Fund
(IMF) expects France to fall behind
Brazil by 2015, leaving the US and
Germany as the only western
economies in the top five.
The news will further fuel fears
that the UKs high tax, high regula-
tion and high debt economic model
is costing growth and jobs.
It will also rekindle the debate
about what should be done to boost
the UKs competitiveness and to pre-
vent a growing exodus of people and
capital to emerging economies,
where opportunities are now often
much greater than in the high-
unemployment West.
In US dollars, Brazils output in
2011 stood at $2.469 trillion (1.57
trillion), some $49.2bn larger than
the UKs GDP of $2.42 trillion.
The emerging giant registered
GDP growth of 2.7 per cent in 2011,
far outstripping Britains 0.8 per
BY TIM WALLACE
WORLD ECONOMY

www.cityam.com Issue 1,586 Wednesday 7 March 2012 FREE

ARSENAL
CRASH OUT
GUNNERS HAMMER
MILAN BUT ITS
NOT ENOUGH P27
STANFORD FOUND GUILTY
OF $7BN PONZI SCHEME
CRICKET TYCOON FACES JAIL P3
BUSINESS WITH PERSONALITY
cent. The lead is set to widen, with
the IMF forecasting growth of three
per cent this year against the UKs
0.6 per cent.
However, Brazils 2011 growth rate
is sluggish for a BRIC country
Chinas economy expanded by 8.7
per cent, Indias by 6.1 per cent and
well below the 7.5 per cent seen in
the country in 2010.
Yet there are hints the Brazilian
economy is moving to a stronger
footing. Merger and acquisition
activity is up 177 per cent in the first
two months of 2012 compared with
the same period of 2011, and con-
sumer spending registered healthy
growth in the final quarter of 2011.
British politicians would consider
growth of three per cent a nice prob-
lem to have. British GDP is still way
below its pre-recession peak and esti-
mates from the Office for Budget
Responsibility (OBR) expect growth
to reach the three per cent level by
2015-16.
ALLISTER HEATH: P2
Certified Distribution
02/01/12 till 29/01/12 is 92,258
ORDEM E PROGRES
S
O
USA CHINA JAPAN GERMANY FRANCE
$15.06 trillion $7 trillion $5.86 trillion $3.63 trillion $2.81 trillion
BRAZIL UK ITALY INDIA CANADA
$2.47 trillion $2.42 trillion $2.25 trillion $1.56 trillion
BRAZILS ECONOMY
OVERTAKES THE UK
$1.84 trillion
Overall GDP in 2011 expressed in US dollars at current prices Sources: ONS, Central Bank of Brazil, CIA World Factbook
BY JULIET SAMUEL
EXCLUSIVE

News
2 CITYA.M. 7 MARCH 2012
MITT Romney notched up early wins
as he fought to establish his domi-
nance in the race for the Republican
US presidential nomination last night
but Ohio, the biggest prize of the
evening, was too close to call.
Romney won as expected in Virginia
and Vermont, while rival Newt
Gingrich won in his home state of
Georgia, according to network projec-
tions. Results from the seven other
states holding contests on Super
Tuesday were due to follow overnight.
Some 419 of the 1,144 delegates
needed to win the partys nomination
were at stake. Polls show Romney has
effectively erased Rick Santorums lead
in Ohio, a bellwether state.
Contests were also being held in
Massachusetts, Oklahoma, Tennessee,
Idaho, Alaska and North Dakota.
Romney edges
ahead in race
to fight Obama
US POLITICS

Greek nerves
dent markets
PRE-BAILOUT nerves set global mar-
kets tumbling yesterday, as investors
fretted about the prospect of Greeces
looming bond swap failing as well as
the broader health of the Eurozones
economy.
The FTSE 100 lost 1.9 per cent to
close at 5,765.80 points yesterday, suf-
fering its biggest one-day fall in nearly
three months, while Pariss CAC 40
and the Dax in Frankfurt plunged 3.6
and 3.4 per cent respectively.
In the US, the Dow dropped 203
points, or 1.6 per cent, in its hardest
fall this year, with the S&P and Nasdaq
diving 1.6 and 1.4 per cent.
Wall Streets anxiety gauge, the VIX,
jumped about 16 per cent to near 21,
above its 50-day moving average for
the first time since November.
Yields on 10-year US bonds dropped
from 2.02 to 1.94 per cent as nervous
investors clustered around safe
haven assets.
Global financial systemic risk is at
the forefront right now. The question
is whether there will be a successful
tender come Thursday of enough pri-
vate bondholders to avoid the spectre
of default with a capital D, said David
Dietze, investment strategist at Point
View Wealth Management.
Greece is racing to sign a deal to
enforce haircuts of more than 50 per
cent on private bondholders by tomor-
row night if it is to receive critical
bailout funds and avoid a disorderly
default.
Though UniCredit, Socit Gnrale
and six Greek banks yesterday threw
their weight behind the initiative,
Greek authorities resorted to threats
of a default last night to try and obtain
BY MARION DAKERS
MARKETS

FEARS GROW FOR $45BN UTILITY AS

BUYOUT GROUPS HEDGES NEAR
EXPIRY
The worlds biggest private equity
deal is facing rising financial pres-
sure during the next two years with
the expiry of contracts that under-
pinned the takeover of utility TXU.
Investors in the $45bn buyout of the
company, now known as Energy
Future Holdings, fear a sharp drop in
revenue as hedges that protected it
from a fall in natural gas prices pro-
gressively expire by 2014.
SEARCH FOR MINERALS HINDERED AS
EXPLORATION BUDGETS DRY UP
Mining exploration budgets are being
reined in this year as companies
struggle to raise capital to fund the
search for new reserves to meet surg-
ing Chinese demand for commodities
from copper to iron ore.
STATOIL IN POLE POSITION TO BUY
BRAZILIAN BUSINESS OF ANADARKO
Norways state-controlled energy
group Statoil is in pole position to
buy the Brazilian business of US-listed
explorer Anadarko for about $3bn,
which would mark the latest big foray
by a global oil group into the South
American country.
EX-PEACOCKS MAN TRIES ON CLOTHES
ROLE AT MORRISON
Wm Morrison has hired the former
managing director of Peacocks, Tim
Bettley, as its first head of clothing, to
spearhead the development of its
non-food business.
CAPCOM SAYS GAME MUST BATTLE
FOR SURVIVAL WITHOUT STREET
FIGHTER
The failure to get Street Fighter on its
side has pushed Game Group even
closer to the brink. Capcoms decision
to withhold its latest releases from
the ailing entertainments chain
comes after Electronic Arts and
Nintendo withdrew stock last week.
CAMELOT GIVEN MORE TIME TO HELP
GOOD CAUSES AND TO FIGHT
DESMOND
Camelot is to press the button on a
100m expansion of its lottery termi-
nal network after winning a four-year
extension to its licence to run the
National Lottery.
HUNDREDS OF JOBS TO GO AS RIO
TINTO CLOSES UK ALUMINIUM PLANT
More than 500 people will lose their
jobs after Rio Tinto announced it will
close its Lynemouth aluminium
smelter at the end of the month. The
FTSE 100 mining company said 323
out of the 515 people working at the
Northumberland plant will be made
redundant in May after production
shuts down.
MATALAN PROFITS SLUMP ON HIGH
STREET SLOWDOWN AND LARGE DEBTS
Matalan has suffered a slump in prof-
its, becoming the latest privately-
owned retailer to be hit by a
slowdown on the high street and large
debts.
UPS-TNT TALKS HIT A BUMP
United Parcel Services talks to take
over Dutch rival TNT Express have
slowed as a result of friction between
the two package-shipping companies
over a range of issues, according to
people familiar with the matter.
Though the people expressed hope
the two sides will still reach a deal,
they are unlikely to do so this week.
BOEING FORMS ALLIANCE WITH
CHINESE JET MAKER
Boeing formed a partnership with
Commercial Aircraft of China, or
Comac, a nascent competitor in jet
manufacturing, to research ways to
make planes more fuel-efficient and
cut greenhouse-gas emissions.
WHAT THE OTHER PAPERS SAY THIS MORNING
Industrial policies are doomed to fail
SLOWLY but surely, the British estab-
lishment is forgetting the lessons of
the past 35 years. We have seen the
return of high taxes, a softer approach
to inflation, talk of wealth taxes (eerily
similar to those supported by the
Labour party in 1979), the rationalisa-
tion of envy and now even a comeback
for economic nationalism.
On the day the UK economy was
officially overtaken by Brazils now
the sixth largest in the world it was
hard to know what was most depress-
ing: Ed Milibands call for an industrial
policy based on patriotism, by which
he seems to mean uselessly exhorting
consumers to buy UK goods and using
a state-backed bank to lend money to
pet projects (the laughable example he
cited was a windfarm maker in
Scotland); or Vince Cables call for a
more ambitious and strategic
industrial policy. Both men have long
specialised in attacking wealth cre-
ators and the financial services indus-
try a key source of jobs so it was
hard to take either of them seriously.
The real problem is that the
experts advising politicians dont
have a clue about which industries will
do well. Futurologists are inevitably
wrong. Of course, technology is a
growth area but a few years ago it
seemed flat screen TVs were the future
and that the value added in mobile
telephony was to be found in carrying
calls, rather than producing handsets.
That view turned out to be hopelessly
incorrect. Fifteen years ago, everybody
thought Microsoft-style software was
where the money would remain and
that whoever built the best browsers
would control the web. Nobody pre-
dicted the return of Apple, or the rise
of the smartphone, or social networks.
Attempts at directing resources
always end in tears. Take the crucial
decision by John Major and Tony Blair
to massively increase the number of
young people who go to university:
that was a major strategic, industrial
and social policy aimed at helping the
UK succeed in a new, knowledge based
globalised world. It was also an
appalling failure because the supply of
graduates has become too great for the
number of graduate-level jobs, and
because some universities are of too
low quality. The result has been many
a tragically shattered dream: the per-
centage of recent graduates employed
in lower skilled jobs has risen from
26.7 per cent in 2001 to 35.9 per cent
today. Had so many of the best and
brightest graduates not left Britain,
especially those with science degrees,
the scale of under-employment would
be even greater.
Top-down strategic decisions fail not
merely because the future is inherent-
ly uncertain but also because ideolo-
gy and vote-buying are always the
dominant imperative. Many of the
UKs most successful industries such
as supermarkets, accountancy firms,
hedge funds, currency trading compa-
nies or private schools (which are rated
higher than those of any other econo-
my apart from New Zealand on the
OECDs league table) are politically
incorrect or located in the wrong
part of the country. They will never be
backed under an industrial policy.
We need less hubris and more real-
ism from governments. They must
focus on the basics: an education sys-
tem which delivers numeracy, literacy
and knowledge for all; lower taxes;
reduced public spending and red tape;
more (privately-financed) infrastruc-
ture; a sound monetary policy that
doesnt fuel booms and busts; no
bailouts or hidden subsidies and
trust the private sector to do the rest.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Greek leader Lucas Papademos has until Thursday to convince bondholders of his plan
EDITORS LETTER
ALLISTER HEATH
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
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Pictures Alice Hepple
Commercial
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Commercial Director Harry Owen
Head of Distribution Nick Owen
The new jobs website for London professionals
CAREERS.com
a deal with the required 75 per cent of
bondholders in time.
The markets were also spooked by a
0.3 per cent drop in output in the
Eurozone, which was revealed by offi-
cial statistics office Eurostat.
Brent crude also headed lower, after
news of Tehrans softening stance
helped take the sting out of oils recent
price surge.
Iranian authorities have agreed to a
new round of talks with the United
States, Russia, China, France, Britain
and Germany over its disputed nuclear
programme and oil trade.
The price of crude for April delivery
slid nearly $2 during the day to settle
at $121.98 a barrel, down from near-
record highs of $128 last month.
Other commodities were hit by the
chilling effect of Greece, coupled with
unexpectedly weak growth forecasts
from China on Monday.
Copper fell 2.5 per cent to a two-
week low of $8289.50 on the London
Metal Exchange.
Gold fell more than two per cent to
$1,674 an ounce and silver tumbled
three per cent, as investors looked to
the dollar as a safer place to park cash.
1 Mar 29Feb 2Mar 5Mar 6Mar
5,950
5,850
5,875
5,900
5,775
5,800
5,825
5,925
ANALYSIS l FTSE
5,765.80
6 Mar
VINCE Cable, the business secretary,
has called for the break-up of Royal
Bank of Scotland in a leaked letter that
shows a withering view of the direc-
tion of the coalition.
The Treasury should use the loss-
making RBS, which is 82 per cent tax-
payer-owned, to create a bank
dedicated to boosting business lending
and supporting exports, Cable (pic-
tured) said in a letter to
David Cameron and
Nick Clegg.
My suggestion
is that we recog-
nise that RBS
will not return to
the market in its
current shape and
use its time as ward
of state to carve out of
it a British
Business
B a n k
with a clean balance sheet and a man-
date to expand lending rapidly to
sound business, he said.
In a four page letter the Liberal
Democrat MP, a regular critic of bank
lending levels, said the government
needed to explain how British people
will earn our living in future and
highlighted a series of growth indus-
tries such as advanced manufacturing
and low carbon technology.
He also said the government lacked
a compelling vision for the future
beyond sorting out the fiscal mess.
The letter, dated 8 February,
angered Conservative backbenchers
who have clashed with Cable.
Last night Cable told the BBC it cer-
tainly wasnt a comprehensive attack
on the governments economic poli-
cies. Chuka Umunna, Labours shad-
ow business secretary, said it
underlines the extent to
which the department of
business lacks clout and
has become margin-
alised.
Time to split
up RBS, Cable
tells Cameron
GEORGE Osborne and Ed Miliband
fought over the best way to boost busi-
ness in the UK last night, with the
chancellor firmly rejecting the
Labour leaders calls for the govern-
ment to become more involved with
firms plans and development.
Miliband argued the government
should be more patriotic in promot-
ing British business, spending money
in the UK to boost jobs even if better
value for money could be gained by
procurement abroad.
Osborne hit out at politicians who
flirt with protectionist rhetoric, say-
ing free trade is beneficial to every-
one, and undermining free trade
risks doing huge damage to business
and jobs and investment in Britain.
Meanwhile immigration minister
Damian Green was forced to defend
his attempts to cut net immigration,
claiming he still welcomes migrants
with the skills and talents that
Britain needs.
Osborne toned down the anti-
immigration rhetoric, arguing one
of our countrys greatest advantages
is our openness.
However, there is still movement
towards more government interven-
tion in industry, with Vince Cable
arguing in favour of state investment
in research. MORE: P17
ALLEN Stanford was convicted yester-
day of running a $7bn (4.5bn) Ponzi
scheme, a verdict that caps a riches-
to-rags trajectory for the former Texas
financier and Caribbean playboy.
Stanford, who created the Stanford
20/20 Cricket tournament, was found
guilty on 13 of 14 criminal counts by a
US jury, including fraud, conspiracy
and obstructing a investigation.
Stanford, who has in jail since his
June 2009 arrest, is expected to be
sentenced in the next few months,
and is considering an appeal.
The charges carry a potential
prison sentence of more than 200
years, but Stanford is more likely to
face a maximum of about 20 years.
Most of his victims have received
none of the money back they invested
in his certificates of deposit.
Stanfords personal fortune was once
valued at $2.2bn.
Osborne hits
out at Labour
protectionism
Stanford guilty of running
Ponzi scheme worth $7bn
Financier Allen Stanford is facing jail after his 13 convictions Picture: GETTY
BY PETER EDWARDS
POLITICS

POLITICS

News
CITYA.M. 7 MARCH 2012
BY HARRY BANKS
COURTS

3
ONLINE stockbroker Share saw under-
lying profits increase 43 per cent to
1.6m during 2011, helped by a seven
per cent rise in income to 14.3m, it
said yesterday.
Chairman Sir Martin Jacomb said
the company was still looking to
boost revenue through more focus
on those who trade frequently and
providing a comprehensive range of
Junior ISAs.
The Aylesbury-based firm, which
makes most of its money from its
Share Centre business, announced
plans to increase its dividend for 2011
by 20 per cent to 0.36p per share.
THE property management company
run by Vincent Tchenguiz before he
became embroiled in a fraud probe
has been rescued from administration
in a 62m deal.
Peverel has been taken over by pri-
vate equity houses Chamonix and
Electra Partners, who said they would
secure more than 4,200 jobs.
It comes nearly a year after the hold-
ing companies of Peverel, which
looks after around 190,000 residen-
tial and retirement units, were
placed in administration following
the arrest of Vincent Tchenguiz, his
brother, Robert, and seven other
people in a Serious Fraud Office (SFO)
investigation into the collapse of
Icelands Kaupthing Bank.
At the time Vincent
Tchenguiz said he had no
choice but to call in adminis-
trator Zolfo Cooper after
Bank of America Merrill
Lynch demanded repayment
within 24 hours of a
124.6m loan plus 11.4m in
accrued interest.
The brothers were released
without charge by the SFO and last
month won the right for a judicial
review of the circumstances surround-
ing their arrest. The hearing is due to
begin in May.
Yesterdays deal will see Peverels
debt pile cut by 100m to 25m.
Janet Entwistle (pictured), the for-
mer managing director of BT Fleet, has
been appointed chief executive and
Paul Lester, the former head of VT
Group, the support services firm,
becomes non-executive chair-
man.
Peverel has previously
faced claims of poor serv-
ice and yesterday
Entwistle said: This trans-
action marks a new begin-
ning for Peverel.
Vincent Tchenguiz
bought Peverel from its
US owner Holiday
R e t i r e m e n t
Corporation in 2007,
funding the pur-
chase with 500m
finance from
Merrill Lynch,
before the US bank
was taken over by
Bank of America.
Ex-Tchenguiz
property firm
in 62m deal
THE RECORD $639bn (406.8bn)
bankruptcy of Lehman Brothers
ended yesterday, clearing the way for
it to start distributing about $65bn to
creditors starting on 17 April, court
documents show.
Lehman has said that it expects
that first group of payments to credi-
tors to be at least $10bn.
Lehman, now a small fraction of its
former size, collapsed on 15
September 2008 with $639bn in
assets, acting as a catalyst for the
financial crisis. The legal end to the
case enables Lehman to start paying
back its creditors.
Bankruptcy of
Lehman ends
Profits up 43pc
at broker Share
BY PETER EDWARDS
PROPERTY

CAPITAL MARKETS

BANKING

SANTANDER UK has overhauled its

board and appointed a new chief
financial officer in a move widely seen
as preparation for the float of the busi-
ness when market conditions improve.
Stephen Jones, who the bank
poached from Barclays last year, will
join the board as CFO and head of reg-
ulation, so that the lender has the
management structure of a listed com-
pany before it floats.
Steve Pateman, meanwhile, has
been promoted from head of corpo-
rate banking to head of all UK bank-
ing, so that his brief now also includes
retail banking and marketing.
Santander UK has been looking for a
good opportunity to float in London
for over a year in a deal expected to
raise around 4bn.
Much of that cash will be used to
pay back its parent company in
Madrid for the 5bn it injected so that
Santander UK could snap up 300 RBS
branches.
But delays in integrating those
branches and the moribund state of
Londons capital markets have delayed
the deal. The group is keen for the UK
business to float as soon as possible
but its management in London is
inclined to wait for better conditions,
with a deal unlikely until next year.
Santander UK prepares for
float with a board overhaul
Vincent Tchenguiz is still waging war on the SFO Picture: GETTY
News
4 CITYA.M. 7 MARCH 2012
BY JULIET SAMUEL
BANKING

Voted Britains favourite cofee shop

8ource. lu iudepeudeut surve]s of the British coffee shop market puolished iu 0ecemoer 2010 aud 0ecemoer 2011 o] Allegra 8trategies,
Costa was voted Britaiu's favourite coffee shop oraud. For more iuformatiou please visit www.costa.co.uk
)25 &2))(( /29(56
BANKS could face 3bn in further
costs from mis-selling payment pro-
tection insurance (PPI) after the FSA
hit them with new guidelines saying
they must write to every customer
who could potentially be affected.
That means lenders will now have
to go back through over 16m policies
worth 17bn sold over the last seven
years and write to every consumer
who could have been mis-sold the
insurance. They might also have to
include those sold before 2005,
which were worth another 17bn.
The new guidelines means that PPI
will now switch from being a one-
off hit to banks 2011 profits into an
ongoing and costly headache.
So far, lenders have paid out just
1.9bn in compensation, a quarter of
the total cost of the scandal, which
was a key factor in the FSAs decision.
The guidelines also aim to cut
claims management companies out
of the equation firms that try to
convince customers that their servic-
es are required to claim compensa-
tion and who then bag a large chunk
of the pay-out.
FSA managing director Martin
Wheatley said: We think that the
redress due from this process may
well exceed what has been paid so
far, and that is why we are acting
now to clarify our expectations. The
FSA has warned firms to ensure the
letters are free from financial jar-
gon or marketing material.
PPI is insurance to cover loan
repayments for a certain period if a
borrower loses her job, but it was
quietly bundled into many products
sold to customers who did not want
or need it, increasing the cost of
their loans.
New FSA rules
add 3bn cost
to PPI scandal
BY JULIET SAMUEL
BANKING

THE head of Alliance Trust said she

had witnessed a perfect storm in the
global economy as the firm offered its
largest dividend increase in 20 years.
Katherine Garrett-Cox, chief execu-
tive, said equity markets remain as
challenging as at any time in genera-
tions.
We have witnessed a perfect storm
created by the global financial crisis
which has culminated in the recent
uncertainty within the Eurozone, the
increased dependence on sovereign
debt and the need to substitute con-
sumer demand from the West with
that from the Far East, she said.
The firms full-year dividend rose
7.2 per cent to 9p as the investment
trust posted results for the 11 months
to 31 December. Net asset value total
return was minus 5.7 per cent, ahead
of the global average.
Alliance hit the headlines last year
when investors voted down calls from
hedge fund Laxey Partners to force the
trust to buy back shares whenever its
share price fell more than ten per cent
below Alliances net asset value.
Yesterday the trust made no refer-
ence to the dispute in its results state-
ment. However the Dundee-based
firm called for clarity over the impact
on investment trusts should Scotland
vote for independence.
Alliance Trust raises dividend
despite year of global turmoil
INVESTMENTS

ENERGY firms Essar and Cairn look set

to crash out of the FTSE 100 in next
weeks index reshuffle, based on their
closing prices yesterday.
Essar, which has seen its share price
slump nearly 60 per cent in the last
three months on worries about tax
and delays at its Indian plants, fell
more than five per cent yesterday to
leave its market capitalisation at a rel-
atively paltry 1.6bn.
And while Cairn shares have gained
about five per cent since the FTSEs
last quarterly review, firms in the FTSE
250 index have overtaken it.
Hargreaves Lansdown, which
looked to be at risk of losing its place,
is likely to stay in the blue-chip index
after its shares rallied 3.1 per cent in
heavy trading yesterday one of just
two rising stocks in the FTSE 100.
The changes will be formally
announced by the FTSE compiler after
the market close today, after being
confirmed by a FTSE committee using
yesterdays closing prices. They will be
made effective after the market closes
on Friday 16 March.
Aberdeen Asset Management is set
to enter the top index for the first time
in its history, despite a wobble last
week when its shares tumbled five per
cent, as is chemicals firm Croda.
Essar and Cairn expected to
lose their places in FTSE 100
BY MARION DAKERS
MARKETS

News
5 CITYA.M. 7 MARCH 2012
Katherine Garrett-Cox said it is a hugely challenging time for working in equity markets
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INSURER Omega has cancelled its div-
idend after pre-tax losses doubled to
$94.7m (60m) in 2011, up from
$42.9m the year before.
Investors were dismayed that the
firm made no mention of a possible
takeover in its annual report and its
shares which have already lost half
their value in the last year dropped
a further two per cent to 49.25p.
Last year Omega turned down at
least three approaches, including an
83p per share bid from rival
Canopius.
The risk remains that the longer
this company is allowed to limp on as
an independent entity the less there
is that will be of value to a third party
acquirer, analysts at Peel Hunt wrote
in a note.
Independent shareholders should
take decisive action to secure what lit-
tle value is left.
Gross premiums written declined
from $356.1m to $304.6m, contribut-
ing to a negative return on equity of
over 23 per cent.
The entire insurance industry had
a tough year following a spate of nat-
ural disasters in Japan, New Zealand
and Thailand but Omegas results are
worse than most of its Lloyds of
London rivals.
The firm is one of the smallest
operators on the market and only just
survived a torrid 2010 during which
almost its entire board, including
chief executive and chairman, were
replaced as part of a bloody board-
room battle.
Losses double
and bidders
desert Omega
INTER-DEALER broker Tullett Prebon
yesterday said it would cut a further
80 jobs as it announced that profits
had dropped for a second consecutive
year.
Terry Smith, chief executive, said
the group needed to reduce costs
and maintain flexibility in the cost
business and warned the firm faced
higher costs from developing new
electronic platforms and dealing
with new regulation.
The news comes just two months
after it announced that 80 traders in
New York and London would lose
their jobs.
Pre-tax profits for 2011 were
119.2m, a drop of 15 per cent, while
revenue remained flat at 910m.
To make matters worse, ratings
agency Moodys has downgraded the
firms outlook from stable to nega-
tive, citing a challenging operating
environment due to the deteriorat-
ing creditworthiness of many of
Tulletts traditional customers and
the potential decline in Tulletts
broking revenues.
Tullett Prebon cuts another
80 jobs as profits tumble
Tullett Prebon chief executive Terry Smith has a tough year ahead of him
BY JAMES WATERSON
INSURANCE

CAPITAL MARKETS

News
6 CITYA.M. 7 MARCH 2012
ANALYSIS l Omega Insurance Holdings Ltd
p
29Feb 1 Mar 2Mar 5Mar 6Mar
52.0
51.5
51.0
50.5
50.0
49.5
49.0
p
49.25
6 Mar
BP paid former chief executive Tony
Hayward a share-based bonus worth
more than $1m for last year, despite
his resignation from the oil giant in
July 2010, a US filing showed last night.
Hayward, who quit in the aftermath
of the Gulf of Mexico oil spill, received
144,422 shares valued at 720,000. The
Briton who now works for oil group
Genel Energy had retained an entitle-
ment under a long-term share plan
linked to company performance.
The Securities and Exchange
Commission filing comes just days
after BP reached a $7.8bn (6.5bn) set-
tlement with more than 100,000 peo-
ple and businesses affected by the spill
that killed 11 workers.
Bob Dudley, Haywards successor,
received a $6.8m package for 2011, a
big rise from the prior year.
A BP spokesman said: Bob Dudley
and his management team performed
exceptionally well. They have put BP
back on tracks to recovery. They
turned a $5bn loss in 2010 into a
$24bn profit in 2011.
The downstream business deliv-
ered a record year of earnings and the
company generally made huge
progress in implementing a new safety
organisation worldwide and funda-
mentally restructuring its upstream
business.
Tony Hayward
picks up $1m
bonus from BP
BY PETER EDWARDS
ENERGY

News
7 CITYA.M. 7 MARCH 2012
MICHAEL Page saw 2011 revenues
boosted by growth in its Asia-Pacific
business, but it wasnt enough to lift
operating profits, which fell by three
per cent over the year.
Revenues in the recruitment spe-
cialists Asian operations rose 38 per
cent to 166m while overall revenues
hit 1.02bn up from 832m in
2010.
Chief executive Steve Ingham said
2011 became more challenging as
the year went on, as trading became
more challenging as general busi-
ness confidence fell.
He said all of the countrys geo-
graphic regions were hit but that
growth had remained positive
despite slowing growth rates.
Ingham was also relatively upbeat
on the outlook for 2012, though he
admitted that stagnation in the UK
banking sector meant its finance
and accounting group had stalled.
In the first two months of 2012,
with the exception of financial serv-
ices, we have seen no significant fur-
ther slowing, he said.
Though gross profit at the firm
rose by a record 25.2 per cent, it put
the slight fall in operating profit
down to investment in both head-
count and growing the business
abroad.
The UK contributed 24 per cent of
the groups gross profit in 2011, a
drop of four per cent on the previous
year, with operating profit coming
in 6.7 per cent lower at 18.3m.
Shares in Michael Page fell 7.5 per
cent yesterday to close at 443p.
Finance lags
as recruiter
grows in Asia
BANKS are stepping up their efforts to
convince ministers that the FSAs
approach to regulation could perma-
nently damage the UK economy.
In a policy paper sent to the
Breedon Taskforce, a special govern-
ment policy unit set up to examine
how to expand credit supply to small
businesses (SMEs), the banks slam the
FSA for choking off a major source of
capital. A key issue is the rules govern-
ing securitisation the bundling and
selling of SME debt to investors who
would not buy single loans because
they are too small to be liquid enough.
Banks argue that the uncertainty
over whether and how they can bun-
dle SME debt together means investors
are simply walking away from deals.
But they also claim the FSA is tak-
ing too inflexible an approach to let-
ting banks assess the riskiness of their
lending to SMEs.
Lenders argue that the government
should push the FSA to:
Speedily resolve what kinds of SME
securitisation are allowed.
Allow banks to classify SMEs that
are suppliers to large, established com-
panies as less risky, meaning lenders
could hold less capital against such
loans and lend to them more cheaply.
Allow banks to hold less capital
against credit facilities that are not in
use, such as an overdraft that an SME
has arranged but not drawn. This
would again make it cheaper to
expand capacity, they say.
Impose less harsh rules for when an
SME default is triggered, taking into
account how much money is past due
rather than simply classifying all late
repayments as a default.
The FSA declined to comment.
Swiss parliament votes
to weaken bank secrecy
SWITZERLANDS parliament has
passed a proposal that aims to settle
an ongoing dispute with the US over
the tax evasion involving hidden off-
shore accounts.
The lower house agreed to back the
plan which clarifies how
Switzerland would hand over data on
Americans suspected of dodging
taxes at home by 110 votes to 56.
Switzerlands upper house passed
the plan in December.
The proposal will allow
Switzerland to hand over data on sus-
pected tax evaders, even if US tax
authorities can only identify alleged
offenders by suspicious patterns of
behaviour, rather than by name or
bank account.
It seeks to backstop an expected
deal over US probes into 11 banks
including Credit Suisse and Julius
Baer that is likely to comprise a data
handover and fine payment.
The move represented a weakening
of Switzerlands secrecy laws, which
have underpinned its finance indus-
try on which the economy relies heav-
ily.
But the Swiss authorities have
agreed to compromise after the US
indicted Wegelin, a small private
bank, for allegedly assisting
Americans to avoid $1.2bn of taxes.
Banks blame FSA for choking
off credit to small businesses
BY ELIZABETH FOURNIER
RECRUITMENT

BANKING

Steve Ingham said the end of 2011 was challenging

Long-term growth
takes time to pay
ITS becoming a familiar story by
now. Recruiters who built their busi-
nesses by focusing on the UK and its
once lucrative financial services sec-
tor are having to turn their back on
the past in search of growth pas-
tures new.
Michael Pages results only
cement the increasingly downbeat
picture of City jobs financial serv-
ices is the only sector that hasnt
picked up since the start of the year,
and the UK generates four per cent
less in revenues for the firm than it
did in 2010.
The inevitable flip side is overseas
growth, and Michael Page certainly
seems hungry for a slice of emerg-
ing markets pie, opening 19 new
offices and moving into three new
countries during 2011. Its Asian and
Americas revenues are growing
nicely as a result but investment
comes with inevitable costs, and
shareholders will be looking for ben-
efits to start filtering through soon.
Though shares fell yesterday
theyve been riding high recently.
We dont think the value is there
yet.
BOTTOMLINE
Analysis by Elizabeth Fournier
L
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ENGINEERS DRIVE 2011 REVENUE
AT MICHAEL PAGE

1
.0
2
B
N
2011
revenue
22.4%
THE
BANKING FILES
BY JULIET SAMUEL
EXCLUSIVE

BRITISH new car sales edged down

2.5 per cent on the year in February
to 61,868 vehicles, the Society of
Motor Manufacturers and Traders
(SMMT) said yesterday.
However, February typically
accounts for just 3.3 per cent of
annual new car registrations, ahead
of the registration plate change in
March.
The March market will provide a
much better indicator of industry
health than the relatively low vol-
umes traditionally seen in February,
said SMMT chief executive Paul
Everitt.
BRITAIN will build at least an extra
100,000 Nissan cars each year after the
Japanese firm agreed to invest $200m
(127m) in its Sunderland site.
Production of the Invitation hatch-
back will begin in the middle of next
year in a boost to the automotive
industry, which is becoming more
anxious over the future of General
Motors plant in Ellesmere Port, near
Merseyside, after a senior executive
yesterday declined to provide solid
reassurances publicly.
Nissan, run by Carlos Ghosn, said it
will take on 600 staff in Sunderland,
where it makes the Qashqai and Juke
models, taking the total there to 6,000.
Japans second-largest carmaker,
which is being supported by a 9.3m
loan from Britains regional growth
fund, expects the Invitation to create
2,000 jobs in-house and at suppliers.
Business secretary Vince Cable, at
the Geneva motor show yesterday,
said: The investment is a boost for
jobs at Nissans plant as well as the
wider supply chain Global vehicle
manufacturers are beating a path to
the UKs door.
Britain faces a battle, however, to
persuade GM to keep its plant in
Ellesmere Port beyond 2014. Yesterday
vice-chairman Steve Girsky, a former
Wall Street banker, said he had a
viable plan for its loss-making
European arm but gave few details.
Theres uncertainty in the econom-
ic environment across Europe. That is
what we have to live with and what we
have to work our way through.
Working together, we think we can get
this done.
Last night the Business Department
declined to say if Cable had met GM
executives in Geneva. It comes days
after he flew to New York to make the
case for Ellesmere Port to GM chief
executive Dan Akerson.
Nissan in jobs
boost but GM
fears mount
GERMAN state prosecutors have
charged three employees at
Porsche with credit fraud, the lat-
est fallout from a legal dispute
alleging the sportscar maker ille-
gally cornered the market in
Volkswagen shares in 2008.
The unnamed Porsche employees
are accused of giving false informa-
tion about the number of options
Porsche held on Volkswagen ordi-
nary shares during talks over a
10bn (8.35bn) loan refinancing
in March 2009, prosecutors in
Stuttgart said in a statement yester-
day.
Porsche staff
in fraud case
New car sales
fall in February
BY PETER EDWARDS
AUTOMOTIVE

AUTOMOTIVE

AUTOMOTIVE

FRENCH carmaker PSA Peugeot

Citroen announced the terms of a
1bn (832m) share sale to fund its
alliance with General Motors, offering
a big discount to draw in funds for
overseas expansion and new models.
GM and Peugeot announced an
alliance last week to co-operate on
developing new cars with the aim of
saving $2bn (1.27bn) annually via
pooling purchasing and research and
development. The French carmaker
hopes the deal will help it step up
expansion in lucrative new markets as
Europes car market struggles.
Peugeot said yesterday it would offer
16 new shares for every 31 existing
shares held by investors at 8.27 each,
a 42 per cent discount to its closing
stock price on Monday. The deal will
see GM take a seven per cent stake in
Peugeot for roughly 320m.
Peugeot offers big
discount on shares
AUTOMOTIVE

Nissan chief execu-

tive Carlos Ghosn is
rumoured to be
considering a
revival of the
Datsun sports car
Picture: GETTY
News
8 CITYA.M. 7 MARCH 2012
ANALYSIS l Nissan Motor Co Ltd

29Feb 1 Mar 2Mar 5Mar 6Mar

850
840
830
820
810
800
799
6 Mar
QR SCAN HERE
ftfftI.tem
FINANCE, LEGAL & I.T.
SALARIES UP TO
250K 1000
OVER
JOBS
WWW.CITYAMCAREERS.COM























I t f f t f .



. m e t .


















News
9 CITYA.M. 7 MARCH 2012
HOUSEHOLD spending, invest-
ment and exports all fell in the
final quarter of 2011, official sta-
tistics confirmed yesterday,
prompting fears the Eurozone will
suffer months of slow growth or
even recession.
The broad based decline in
activity dragged GDP down 0.3 per
cent in the last three months of
the year, compared with expan-
sion of 0.3 per cent in the previous
quarter.
GDP was up 0.7 per cent com-
pared with the final quarter of
2010 and, thanks to downward
revisions to earlier growth, took
expansion over 2011 to just 0.7 per
cent.
The worst published performer
in the country was Portugal,
where GDP fell 1.3 per cent, and
Sweden, which contracted by 1.1
per cent.
The most recent Greek data
comes from the second quarter of
2011, which fell 7.3 per cent com-
pared with the same quarter of
2010.
Polands economy expanded 1.1
per cent in the final quarter, while
Lithuanias grew by one per cent.
The underlying outlook
remains bleak survey measures
of export orders point to contin-
ued weakness in external
demand, and domestic spending
will continue to suffer the effects
of draconian fiscal tightening,
said Jennifer McKeown from
Capital Economics.
Even in countries with relative-
ly sound public finances like
Germany, fears of more bail-outs
for peripheral economies might
prompt households to save rather
than spend their income.
Recession looms as
investors cut back
BY TIM WALLACE
EUROZONE

FRENCH President Nicolas Sarkozy

said yesterday that if re-elected he
would propose a minimum tax on
the profits of big listed companies,
which could raise 2bn to 3bn
(1.67bn to 2.5bn) in a year to go
towards cutting the public deficit.
As the latest poll showed Sarkozy
trailing further behind Socialist
presidential candidate Francois
Hollande, he said: We are going to
create a tax on minimum profits
for big companies in France, compa-
nies in the CAC 40, because I have
discovered something which is not
normal, it's that these big compa-
nies maximise their tax benefits
and some of them do not pay tax at
all.
The conservative leader told a TV
debate that he would propose the
measure in the 2013 budget.
Sarkozy has been criticised on
the left for changes to the tax sys-
tem that favour companies and the
wealthy.
He told France 2 television that
the minimum tax would target
international companies like oil
group Total.
A poll by CSA yesterday showed
Hollande getting 30 per cent sup-
port in the first round of a two-
round election, up two percentage
points, while Sarkozy gained one
point to 28 per cent.
In the decisive final round of vot-
ing on 6 May, Hollande was seen
retaining a wide lead over Sarkozy,
beating him by 54 per cent to 46 per
cent, unchanged from the previous
month.
Marine Le Pen, head of the far-
right National Front, fell two per-
centage points to 15 per cent
support in the first round of voting.
Sarkozy promises to crack down on
corporate tax as he trails in the polls
EUROZONE

PORTUGUESE PM: WE WONT FORCE HAIRCUTS

PORTUGAL will pay its debts and will not follow Greece in forcing haircuts on investors,
Prime Minister Pedro Passos Coelho said yesterday. He told Bloomberg TV the country
has showed to all European partners its commitment to reach the targets in fiscal and
economic reforms. Picture: GETTY
WEAK economic data cooled investors
demand for Italian and Spanish debt
yesterday, reversing some of the gains
seen after last weeks huge cash injec-
tion from the European Central Bank.
The European Financial Stability
Facility (EFSF), Holland, Austria and
the UK all successfully sold debt, show-
ing investor sentiment remains
stronger than at the end of 2011.
Yields rose above five per cent on
Spanish and Italian 10-year bonds after
plummeting below the psychological-
ly important level last week.
Spanish yields rose 0.173 percentage
points yesterday to 5.145 per cent, and
Italian yields rose 0.139 percentage
points to 5.069 per cent.
Britain successfully sold 1bn in 30-
year index linked bonds at a real yield
of 0.044 per cent, maintaining its safe-
haven status as a secure government
from which to buy debt.
The EFSF sold 3.443bn (2.87bn) of
three-month bonds at a yield of 0.0516
per cent, with Japan buying 160m of
the debt issue.
The country intends to keep buying
the debt as long as European govern-
ments try to resolve the debt crisis.
Italian debt yields
rise as ECB cash
injection wears off
BY TIM WALLACE
EUROZONE

ANALYSIS l EZ GDP growth

%
2008Q1 2007Q1 2009Q1 2010Q1 2011 Q1
1.5
1
0.5
0
-0.5
-1
-1.5
-2
-2.5
-3
ANALYSIS l Italian yields
2:00 4:00 6:00 8:00 10:00 12:00
5.1
5.05
5
4.95
A DISORDERLY Greek default would
cause more than 1 trillion (833bn)
of damage to the Eurozone and could
leave Italy and Spain dependent on
outside help to stop contagion spread-
ing, the main bondholders group has
said.
There are some very important
and damaging ramifications that
would result from a disorderly
default, the IIF said in a letter to
bondholders.
It is difficult to add all these con-
tingent liabilities up with any degree
of precision although it is hard to see
how they would not exceed 1 tril-
lion.
Greek private creditors have until
tomorrow night to say whether they
will participate in a bond swap.
Greece ratcheted up the pressure
on bondholders to sign up after sig-
nalling it will make the offer binding
and force losses on those who do not
volunteer if it gets enough support
from its other creditors.
IIF warns of
1 trillion risk if
Greece defaults
EUROZONE

HINES new UK managing director

said there were trillions waiting
to be invested into London in the
years to come, highlighting that the
city remained one of the most
attractive global cities to invest in
amid the turmoil in the Eurozone.
Ross Blair (pictured) told City A.M.
at the Mipim conference in Cannes
yesterday that the US investor and
developer will plough 1bn into the
UK real estate market over the next
three years and double the size of its
investment portfolio from 2m sq ft
to about 4m sq ft.
London still remains one of the
most attractive cities to invest in,
Blair said, while stressing that bid-
ding for core assets coming onto the
London market continued to be
fiercely competitive.
The developer of Cannon Place in
the City plans to shift its focus from
development to investment in the
UK in order to balance the books
and provide more steady revenue
streams in an uncertain economic
environment.
Meanwhile, property adviser
CBRE said today that real estate
investors in Europe view the United
Kingdom as the most attractive
market for purchases in 2012, with
London standing out as the single
most attractive city.
CBREs survey, completed by
more than 340 leading property
investors, found that the UK is the
most attractive real estate market
for investment in Europe for 31 per
cent of investors, up significantly
from 16 per cent
in 2011.
Ger many
was the sec-
ond most
a t t r a c t i ve
m a r k e t ,
selected by 27
per cent of
investors.
High hopes for UK
at Hines and CBRE
BY KASMIRA JEFFORD IN CANNES
PROPERTY

THE ARRIVAL of senior debt funds

could provide welcome new sources
of liquidity in the European proper-
ty market as the banks continue to
reduce their exposure to real estate
lending, new research shows.
Cushman & Wakefields latest
European real estate lending sur-
vey found that just 36 out of the 78
leading global real estate finance
providers interviewed said they
would be willing to lend to new
customers, while a further nine
would only lend to existing clients.
This represents a 33 per cent fall
in active lenders since the first
quarter of 2011.
Even those willing to lend have
highly restrictive lending criteria,
with some only willing to lend in
Central London, for example.
There are 32 senior debt lenders
active in the European market,
mostly targeting loan sizes of
20m-50m, although five lenders
interviewed did signal their capac-
ity to underwrite over 100m.
Lenders continue to target prime
assets, with much of their business
in the short term set to come from
refinancing rather than purchases.
According to the report, alterna-
tive finance providers will become
more established and active but
are not expected to fill the debt
funding gap, at least in 2012.
Michael Lindsay, head of EMEA
corporate finance at Cushman &
Wakefield, said: Looking ahead,
the bright star is the increased
lending activity and intentions of
non-bank financial institutions
and the potential arrival of senior
debt funds this year which will pro-
vide some welcome new sources of
liquidity.
PROPERTY

ULSTER Bank, the troubled Irish busi-

ness unit of Royal Bank of Scotland, is
readying itself to sell off assets worth
1bn (833m) according to a source
close to the situation.
This could see Ulster Bank compet-
ing against the state-run National
Asset Management Association
(NAMA) in trying to offload property
portfolios in Ireland.
Ulster Bank, which operates in
Northern Ireland and the Republic of
Ireland, has approached agents. They
are believed to have until the end of
the week to respond with their pro-
posals.
The source said the deal related to
asset sales, not loan sales.
Property consultant CBRE said last
week new properties are expected to
come to market in coming months in
Ireland, as banks, receivers and
NAMA look to offload sites.
The move by Ulster Bank will be
keenly watched to see what level of
pricing can be achieved for such
assets.
Ulster Bank set
for 1bn sale of
property assets
PROPERTY

Focus on Mipim
10 CITYA.M. 7 MARCH 2012
ROYAL MAIL TO DEVELOP BATTERSEA DEPOT
THE ROYAL Mail has won planning permission from Wandsworth Council to redevelop its
South London mail centre next to Battersea Power Station into a residential scheme. The 13-
acre development includes 1,800 homes, a primary school and retail and public space. Royal
Mail will also invest around 50m in the extension of the Northern line and infrastructure.
THE BRITISH Property Federation has
called on the government to provide
more clarity on the minimum energy
standards that will be required by
commercial and residential landlords
beyond 2018 under new legislation.
Changes being brought by the
Energy Act 2011 will mean that hun-
dreds of thousands of UK properties
with the least energy efficiency rat-
ings of F and G could be rendered
unlettable by 2018.
Delegates at a seminar in Cannes,
where the property industry is gath-
ering for its annual Mipim confer-
ence, heard that landlords will be
forced to take on the cost of refurbish-
ing or refitting their buildings to
meet the government standards and
to prevent them from becoming obso-
lete within six years.
While there is likely to be a green
premium higher rents for better
performing properties in the near
term, government legislation will eat
into the value of F- and G-rated prop-
erties, according to British Land boss
Chris Grigg, who sat on the panel
Patrick Brown, BPFs assistant direc-
tor of sustainability, told City A.M. the
government needed to make it clear
whether E-rated and better perform-
ing properties faced a similar fate.
What the BPF would want to see is
an approach that took account of the
natural opportunities that arise
when a building is vacant. We would
prefer the government to take an
approach where only lease transac-
tions which involved a change in
occupancy were captured by the natu-
ral energy efficiencies opportunities,
he said.
Green rules could
make it impossible
to rent some flats
BY KASMIRA JEFFORD IN CANNES
PROPERTY

Real estate firms look to alternative

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FORMER Bank of England MPC
member Andrew Sentance has
taken on a new role on the board
of trustees at Build IT, a charity
that helps with building
health facilities, housing
and schools in rural
Zambia.
A keen guitar player
in a band called
Revelation, Sentance
joins Build IT at the same
time as the Canadian
musician Bryan Adams
of (Everything I Do) I Do It
For You fame (pictured) who fre-
quently fills stadiums with his chart-
bothering brand of soft rock.
Sentance, who is currently
PwCs senior economic adviser,
will not be displeased to be
linked with such a leg-
endary music
figure. And on
his appoint-
ment he says: I
have been very
impressed by the work
that Build IT International has
developed in Zambia.
NEW GIG FOR SENTANCE
11
The Capitalist
CITYA.M. 7 MARCH 2012
Got A Story? Email
thecapitalist@cityam.com
WHERE IS BARNABUS ?
Well done to the lucky winner who guessed that
Barnabus was at Tower Bridge yesterday! To win a
pair of VIP tickets to The Gaucho International Polo
(www.gauchopolo.com) taking place at The O2 Arena,
this week readers have been guessing which iconic
London landmark their mascot, Barnabus, the small-
est polo pony in the world, has got to. Today we are
delighted to offer a pair of VIP tickets and a chance
to win a night's stay at Cannizaro House, the only lux-
ury boutique hotel in Wimbledon. To win this incredi-
ble prize here is todays clue: Barnabus will be
counting every second today, so where's Barnabus? To
enter please let us know where you think he is via the
Gaucho Polo Twitter site@GauchoPolo
Three of Brewin Dolphins winning team
BREWIN Dolphin took on and beat a team
from Rathbones in a rugby match played last
week in the City. The match, in front of around 200
spectators, was a warm-up for a bigger fundraiser
for Leukaemia & Lymphoma Research: the London-
Paris 2012 cycle ride. Brewin Dolphin is proving its
pedal power with a team of 16 cyclists for the event,
including BBC sports commentator Jill Douglas, ex-
Irish international rugby player Paddy Johns, thir-
teen of its investment managers and a doctor
working on the charitys clinical trials. The
fundraising target is 50,000, with 10,000 raised
already from the rugby match.
BREWIN DOLPHIN IN
VICTORIOUS MOOD
@
@
@
MORE NEWS
ONLINE
www.cityam.com
BETFAIR, the online betting group,
yesterday said it took 50m of bets on
the marathon Australian Open tennis
final between Novak Djokovic and
Rafael Nadal, highlighting the grow-
ing popularity of in-play gaming on
major sporting events.
Horse racing was also a driver of
growth, with races such as Kauto
Stars victory in the King George VI
Chase on Boxing Day stimulating
renewed interest in the sport, the
worlds biggest betting exchange said
yesterday.
We had our best-ever Australian
Open, which culminated in almost
50m of bets being placed on the
final, said acting chief executive
Stephen Morana.
Betfair, founded 12 years ago by
one-time professional gambler
Andrew Black and former JP Morgan
trader Ed Wray, reported an 11 per
cent rise in third-quarter revenue to
85.3m, topping a consensus forecast
for 84.8m, according to a company-
supplied poll of ten analysts.
Morana, the companys finance
director, is holding the chief execu-
tive role on a temporary basis ahead
of the arrival of Breon Corcoran, who
will join the company in August from
Irish bookmaker Paddy Power.
The company also confirmed Ed
Wray would step down as chairman
to be replaced by ex-Railtrack chief
executive and city veteran Gerald
Corbett.
Shares in Betfair, which have risen
by 45 per cent in the past six months,
were down 0.45 per cent at 881p.
Betfair gets
a boost from
Aussie Open
BT and TalkTalk lost a court appeal
yesterday, meaning the internet serv-
ice providers (ISPs) will now have to
identify and warn customers who
are suspected of illegally accessing
copyrighted material online.
The two major British ISPs chal-
lenged a High Court ruling, claiming
the Digital Economy Act a crack
down on illegal file sharing is
incompatible with EU law and could
constitute an invasion of privacy and
run up significant costs for con-
sumers.
But the judges disagreed, so the
ISPs will now have to send warning
letters to customers suspected by
film studios or record labels of hav-
ing illegally accessed pirate sites.
If this scheme is found not to be
effective after one year, further legis-
lation could be implemented to pun-
ish persistent offenders by slowing
or suspending their internet access.
BT said it would look at the judg-
ment carefully to understand its
implications and consider our next
steps.
But TalkTalks response was
firmer. The telecoms group said it
was also considering its options but
will continue fighting to defend our
customers rights against this ill-
judged legislation.
Telecom firms
must warn over
web copyright
Novak Djokovic won the marathon final of the Australian Open Picture: GETTY
BY HARRY BANKS
LEISURE

TELECOMS

News
12 CITYA.M. 7 MARCH 2012
ANALYSIS l Betfair Group PLC
p
29Feb 1 Mar 2Mar 5Mar 6Mar
885
880
875
870
865
860
855
881.00
6 Mar
INMARSAT admitted its future with
LightSquared is on the rocks and urged
investors to take a conservative stance
on payments being received from the
US wireless company, which was the
primary driver of revenue growth at
Inmarsat in 2010 but defaulted on its
most recent $56m (36m) rent cheque.
But the British satellite group said it
was confident of a return to growth
albeit a modest one next year.
Inmarsat boss Rupert Pearce told
City A.M.: No one is optimistic about
LightSquared getting resuscitated
theyve got serious regulatory prob-
lems in the US they need to solve.
But green shoots of recovery in the
last year point to a return to growth in
our mobile satellite service franchise.
Pearce noted Inmarsats new mar-
itime FleetBroadband service is ramp-
ing up subscribers at record levels,
with average revenue per user up 15
per cent over the year as customers
transfer to the cheaper service but use
it more.
Inmarsat grew annual revenues 20
per cent to $1.4bn, with pre-tax profits
up 10 per cent to $367m.
Pearce expects future growth rates
to be fuelled by the launch of Global
Xpress, the firms its new super-fast
broadband network for the govern-
ment, energy, maritime and aviation
sectors, and in-flight connectivity for
air passengers, which is at a tipping
point in a couple of years it will be a
must have.
Growth again
for Inmarsat
BY LAUREN DAVIDSON
TELECOMS

PACE shares jumped 13 per cent yester-

day after a fall of nine per cent in the
previous days trading, despite the tele-
vision set-top box developer posting a
drastic slump in profits.
After a year in which the company
axed its senior management team,
issued three profit warnings and saw
its main hard disk suppliers hit by
floods in Thailand, Pace reported a
pre-tax profit of $54.7m for fiscal
2011, less than half the $110.2m it
took the year before.
But the main impact of the floods
is yet to come, as the Yorkshire-based
business only took a $9m revenue hit
last year, leaving $25m to $35m more
to come in the first half of this year.
Like-for-like revenues at Pace fell
seven per cent as Europe where
income dropped 19.5 per cent from
$568.2m to $249.6m failed to deliver
growth.
Organic revenues fell 7.1 per cent,
but, including the effect of acquisi-
tions, revenues were up 11.9 per cent
to $2.3bn.
Paces new chief Mike Pulli said he
was not fazed by the rise of online
video streaming, reiterating his confi-
dence in the pay-TV industry.
BY LAUREN DAVIDSON
TECHNOLOGY

Pace ends a tough

year with a profit
News
13 CITYA.M. 7 MARCH 2012
LOVE IS ALL AROUND AS CUPID EXPANDS MORE
Online dating company Cupid more than doubled revenues last year from 25.7m to
53.6m, half of which was generated outside the UK in one of the 15 countries the website
now operates in. The Edinburgh-based group grew pre-tax profits 67 per cent to 7m
website subscribers grew to 486,776. The firm also announced it had hired Ian McCaig
and Russ Shaw as non-executive directors. Picture: GETTY
ANALYSIS l Inmarsat PLC
p
29Feb 1 Mar 2Mar 5Mar 6Mar
490
480
470
460
450
440
430
433.20
6 Mar
NEWS | IN BRIEF
Textile rental boosts Johnsons
Year-end profits at Johnson Service Group
grew to 13.7m on revenues of 242.3m
in 2011, up from 4.5m the year before.
The results were boosted by a 15.4m
operating profit from its textile rental divi-
sion, which provides linen to the hotel,
catering and corporate hospitality mar-
kets. However earnings from the firms
flagship dry cleaning arm, responsible for
the Johnsons Dry Cleaners and Jeeves of
Belgravia chains, stayed static at 2m as
revenues dipped slightly to 77.3m.
UK tops list of matured loans
Half a trillion dollars of European lever-
aged buy-out loans are due to mature
between now and 2016, according to law
firm Linklaters. The largest burden will
fall on the UK with $172bn of loans that
need refinancing, compared to $86bn in
France and $83bn in Germany. The tele-
coms sector is set to take the biggest hit
with $67bn, followed by retail with
$47bn and healthcare with $40bn.
Bwin.party sells poker website
Gaming hybrid Bwin.party has agreed to
sell Ongame, its business-to-business
online poker network, to US rival Shuffle
Master for a maximum of 29.5m. The
digital entertainment business has been
trying to offload Ongame since June as
part of a strategy to divest peripheral
parts of the business since Bwin and
Partygamings merger. Shuffle Master will
pay an initial 19.5m, with a 10m top-up.
ANALYST VIEWS: CAN PACE DELIVER ON ITS
TURNAROUND STRATEGY? Interviews by Lauren Davidson

JONATHAN IMLAH | COLLINS STEWART

While the short term outlook is better than expected, the medium to long
term negatives will continue to outweigh the positives. The price reflects scepticism
at Paces ability to execute its turnaround plan and fundamental questions about the
long term relevance of the set-top box and both assumptions are sensible.

NICK JAMES | NUMIS

The new management team provided a much-needed breath of fresh
air, however fundamentally the story is unchanged. Pace is still in denial of the
prospect that Apple could be disruptive to the video/set-top box market and we
continue to believe this risk is material. We maintain cautious estimates.

IAN ROBERTSON | SEYMOUR PIERCE

It is good to see no kitchen sinking, but the impressive performance by
new chief Mike Pulli is what is driving our change in recommendation from hold
to buy. We have greatly increased confidence that the company can deliver on
the strategy set out in November.

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News
15 CITYA.M. 7 MARCH 2012
BUDGET airline EasyJet has reported a
3.7 per cent year-on-year rise in passen-
ger numbers for February.
EasyJet carried 3.97m passengers
last month, compared with 3.83m a
year ago.
The figures mark a return to strong
passenger growth for the airline, after
it posted a fall of 0.4 per cent in
January.
Its load factor, a measure of how
many available seats are sold, rose 1.2
percentage points to 87.6 per cent.
In the year to February 2012, the
carrier reported a 9.5 per cent rise in
passenger numbers to 55.6m.
RWE, Germanys second-biggest utili-
ty, plans to sell fewer assets after find-
ing another 1bn (834m) of cost cuts
and raising its capital as it positions
itself for a future without nuclear
power in its home market.
The company, which owns British
utility NPower, reported a 45 per cent
drop in 2011 net profit yesterday.
It now plans to sell assets worth up
to 7bn by the end of 2013, less than
the previously targeted 11bn.
The future looks much brighter
than it did six months ago, incoming
chief executive Peter Terium said,
adding he expects operating profit to
remain flat this year and next as new
power plant capacity and cost-cuts off-
set the impact of asset disposals.
Terium, who takes over as chief
executive in July, is expected to lead a
swift transformation of RWE to pre-
pare for a phasing out of nuclear
power in Germany by 2022, following
Japans Fukushima disaster last year.
Shares of RWE rose to their highest
level since early August in morning
trading, rising 2.1 per cent before
falling back to close down 0.1 per cent.
RWE, which has already sold 1.5bn
worth of assets, now plans to keep its
DEA oil and gas exploration unit,
which accounted for almost 10 per
cent of 2011 operating profit, but
would sell stakes in some of its proj-
ects.
RWEs earnings before interest, tax,
depreciation and amortisation slipped
17.5 per cent to 8.4bn, hit by a drop in
profits from power generation caused
by the nuclear exit and a widening
loss at its energy trading unit.
Its NPower unit reported a 34 per cent
rise in operating profits to 357m
(313m), but it said gains in energy
sales were hampered by costs related
to energy saving programmes.
RWE to scale
back its asset
sell-off plans
JOHN Menzies yesterday posted a full-
year pre-tax profit that topped expec-
tations, boosted by contract wins in its
airline ground handling business.
John Menzies, which also distrib-
utes newspapers in the UK, said it
made a positive start to the year and
was trading in line with its expecta-
tions.
Its Menzies Aviation unit reported a
31 per cent jump in operating profit,
making it the top profit contributor
for the year.
January-December underlying pre-
tax profit rose 25 per cent to 56.4m.
Turnover rose marginally to 2.01bn.
Aviation boosts
John Menzies
EasyJet back in
traffic growth
BY HARRY BANKS
ENERGY

TRANSPORT

INDUSTRY

Apple can even generate buzz with no product

A
PPLES new iPad has had an
impact even before it is
unveiled. The products overall
Buzz score on YouGovs
BrandIndex has increased by two
points since the announcement of its
release less than a week ago.
Looking at longer term trends over
the last year, we have seen the unin-
terrupted rise in its recommend
scores and most surprising it has
moved from a luxury product to a
value product, rising from -6.4 on 7
March 2011 on that metric to +1.1
today.
This doesnt compete with the
Value score of, say, Android at 16
points, which, despite being available
on both smartphones and tablet, has-
nt moved more than one point in the
last 12 months. If the new price is
right, we could be seeing substantial-
ly more colleagues wandering in with
an iPad under their arm.
More surprising results this week
came out of a YouGov SixthSense
report, which indicated that the shop-
ping catalogue remains a firm
favourite for UK consumers. Just
under one quarter ordered an item
direct from a company after browsing
a printed catalogue in the last 12
months.
Argos was shown to be winning the
race on catalogue shopping, with 58
per cent of respondents saying they
have an Argos catalogue at home.
Competitors Tesco Direct, Next and
Littlewoods were trailing behind in
terms of coverage, reaching 27 per
cent, 11 per cent and six per cent of
UK homes respectively. Over a quarter
of those who buy from shopping cata-
logues use three channels to com-
plete their purchase using their
catalogue to browse, going online to
order and visiting their local store for
collection.
Such research highlights the new
role of the catalogue, moving from its
original mail-order purpose to that of
catalyst for online sales.
Stephan Shakespeare is the chief executive
of YouGov
BRANDINDEX
STEPHAN SHAKESPEARE
ANALYSIS l Recommend score
2Jan
2011
1 Apr
2011
1 Jun
2011
1 Aug
2011
1 Oct
2011
1 Dec
2011
1 Jan
2012
20.0
15.0
10.0
5.0
iPad Recommend score
ANALYSIS l Value score
2Jan
2011
1 Apr
2011
1 Jun
2011
1 Aug
2011
1 Oct
2011
1 Dec
2011
1 Jan
2012
5.0
0.0
-5.0
-10.0
iPad Value score
ANALYSIS l RWE AG

29Feb 1 Mar 2Mar 5Mar 6Mar

36.5
36.0
35.5
35.0
34.5
34.0
34.44
6 Mar
FRESNILLO, the worlds largest pri-
mary silver producer, said high met-
als prices boosted 2011 profit and
helped more than double its final div-
idend, offsetting rising electricity
prices, wages and the cost of tighter
safety controls.
The Mexican miner has no debt
and $685m (434m) in cash on its bal-
ance sheet at the end of 2011, but said
it was unlikely to repeat Decembers
extraordinary dividend this year
because of its exploration push and
spending on new mines to offset
lower grades at its flagship Fresnillo
mine, active for 500 years.
London-listed Fresnillo also poured
cold water on deal speculation,
almost three years after withdrawing
its bid for smaller Canadian rival
MAG Silver, still its partner in the
Juanicipio project.
Prices at this moment are very
high, it is very expensive to buy any-
thing. And on top of that, the quality
of many of the projects that we have
evaluated (means they) do not give
proper value to our shareholders,
chief executive Jaime Lomelin said.
For the moment we prefer organic
growth. Core profit, or earnings
before interest, tax, depreciation and
amortisation (EBITDA), at the
Mexican miner rose 63 per cent to
$1.54bn in 2011, in line with analyst
expectations, while profit before
interest and tax rose 39 per cent.
The miner also boosted its final div-
idend to 40 cents per share, taking its
total payment to 102.85 cents from
44.8 cents.
A good set of results... I suspect
they will be over a billion dollars in
cash by the end of this year, analyst
Cailey Barker at Numis said.
Fresnillo sees
silver price
lift its profits
BY HARRY BANKS
MINING

OIL industry services group John

Wood yesterday reported a better
than expected 16 per cent rise in full-
year profits, helped by a strong per-
formance at its core engineering unit
where it expects to see further
growth this year.
The company, which designs,
builds and maintains oil and gas facil-
ities and pipelines, said increased
exploration and production (E&P)
activity drove sales at its engineering
unit, and it expects further growth at
the division. We are forecasting
strong growth in engineering driven
by increased E&P capex spend and
have good visibility in our Wood
Group GTS Power Solutions business
into 2012, the company said.
Last years earnings before interest,
tax and amortisation (EBITDA) were
up 15.6 per cent at $398.7m
(252.5m), ahead of a consensus mar-
ket forecast of $364m according to a
company-supplied survey of analysts
estimates.
The engineering divisions EBITDA
rose 33 per cent, the company said,
accounting for nearly half of group
earnings. During 2011, we saw E&P
spend growing at around 10 per cent
on a global basis, chief executive
Allister Langlands said. We see an
increase in the range of 5-10 per cent
in 2012. It could well be spending ulti-
mately grows towards the top of that
range.
Wood Group profits rise is
fuelled by engineering unit
OIL

News
16 CITYA.M. 7 MARCH 2012
Fresnillo chief executive Jaime Lomelin says he is not on the acquisition trail.
ANALYSIS l Fresnillo PLC
p
29Feb 1 Mar 2Mar 5Mar 6Mar
1,975
1,950
1,925
1,900
1,875
1,850
1,825
1,830.00
6 Mar
NEWS | IN BRIEF
Meggitt growth lifts off
British aircraft parts supplier Meggitt
expects to benefit from airlines renewing
fleets with more fuel-efficient planes this
year, after that trend helped it deliver
strong growth in 2011 profit. The compa-
ny, which supplies flight displays and
wheels to planemakers Airbus and
Boeing, said yesterday 2011 pre-tax prof-
it rose 26 per cent to 323m on sales 25
per cent higher at 1.45bn. Meggitts civil
aerospace unit, which accounts for 45
per cent of group revenue, grew sales by
16 per cent during the year and the com-
pany expects this trend to continue in
2012. Commercial aircraft demand is ris-
ing as soaring oil prices force airlines to
renew fleets with more fuel-efficient
planes.
Cape sees record revenues
Industrial service firm Cape said yester-
day it had achieved record revenues in its
first year in the FTSE 250. The company
provides insulation, painting, industrial
cleaning and training. Revenue jumped
11.1 per cent to 722.5m in 2011 with
adjusted pre-tax profits of 69.4m com-
pared with 69.1m the year before. In
spite of delays to key construction proj-
ects in Algeria and also in Abu Dhabi, the
business was able to deliver substantial
second-half revenue growth," JP Morgan
Cazenove analyst James Thompson said.
Ashstead helped by weather
Plant hire group Ashtead yesterday
reported record third quarter pre-tax
profits. For the three months to 31
January the group saw profits of 21m
compared with a 2m loss the same
period a year ago. Improved weather
conditions helped the company as more
outdoor building work was possible.
Meanwhile revenue rose 21 per cent to
271.3m during the period.
P
i
c
t
u
r
e
:

R
E
U
T
E
R
S
LEADING politicians from Labour
and the Liberal Democrats yesterday
promised manufacturers they will
resurrect the idea of an active indus-
trial policy, using the governments
influence and funds to support
British business.
Labour leader Ed Miliband told the
EEF conference that spending money
to boost jobs, rather than just supply-
ing good public services, is a patriot-
ic policy, and that Britons should
take more pride in UK manufactur-
ing.
Meanwhile business secretary
Vince Cable said the government
will boost investment in new tech-
nologies and aid firms in obtaining
overseas contracts.
Government has a legitimate role
in making choices and addressing
the market failures that hinder the
development of core technologies,
especially during the innovation
phase, Cable said.
It is often too risky, or simply too
expensive, for an individual compa-
ny to undertake the necessary invest-
ment in R&D by itself.
Miliband denied that industrial
patriotism amounted to old fash-
ioned protectionism, arguing that
supporting British firms with subsi-
dies and contracts would boost the
economy, not cripple the UK by sup-
porting inefficient industries as
industrial policies had in the past.
He also gave his backing to the
Made in Britain campaign led by a
manufacturing firm, arguing it pro-
motes pride in British products and
shows the sector is still a major force.
A future Labour government
would see every government depart-
ment focusing on pro-industry, pro-
manufacturing policies, not just the
department for business,innovation
and skills, Miliband said, criticising
current programmes, like the
regional growth fund, as being
patchy and inconsistent.
He pledged to set up a UK invest-
ment bank to support small business
lending, and said government pro-
curement would have to take into
account local jobs under Labour.
Cultural changes are also crucial,
Miliband argued, saying that Britain
needs to be more like Germany in
seeing the manufacturing sector as
offering a worthwhile and well-paid
career path for young people enter-
ing the workforce.
Speaking earlier in the day, Cable
said the Lib Dems were open to cut-
ting the 50p top rate of income tax
as long as it is accompanied by the
introduction of a wealth tax to make
sure the rich pay their fair share.
Lib Dems and
Labour back
industry aid
BY TIM WALLACE
POLITICS

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INFLATION across the developed
world dropped again in January as
energy price rises slowed, figures
suggested yesterday.
Data from the Organisation for
Economic Co-operation and
Development showed inflation
fell to 2.8 per cent in the year to
January across its 34 member
countries.
That represents a small decline
from the 2.9 per cent seen in the
year to December, and continues
the steady decline from the 3.3 per
cent peak in September.
Energy prices rose 7.4 per cent,
slowing from 8.1 per cent in the
year to December, and food price
inflation slowed from 4.5 per cent
to 4.3 per cent.
The highest rate of consumer
inflation came in Turkey at 10.6
per cent, followed by Iceland at 6.5
per cent, while the lowest rates
were Japans 0.1 per cent and
Switzerlands deflation at 0.8 per
cent.
The UKs 3.6 per cent remains
the highest among the seven
major western economies in the
group, though it is well down on
the 5.2 per cent experienced in the
year to September.
Among the major merging
economies, South Africas infla-
tion is highest at 6.4 per cent, fol-
lowed by Brazils 6.2 per cent and
Indias 5.3 per cent.
Inflation slows across world thanks
to cooling energy prices in late 2011
BY TIM WALLACE
WORLD ECONOMY

House price
slump not
finished yet
HOUSE prices fell again in February,
reversing Januarys rise and continu-
ing the slow downward trend of the
year.
Prices dropped 0.5 per cent in the
month, following Januarys 0.6 per
cent rise, taking the average price to
160,118.
Over the last three months, prices
are down 1.1 per cent, and 1.9 per
cent on February 2012.
The fall makes houses increasingly
affordable, with the price to earn-
ings ratio sliding to 4.31, based on
average full-time male earnings,
from 4.32 in January and 4.46 a year
ago.
Housing activity has picked up in
recent months, in part due to the
stamp duty holiday for first time
buyers drawing to a close, but econo-
mists expect prices to fall further.
Although the economy looks like
it is returning to growth in the first
quarter, the economic fundamentals
still look far from rosy for the hous-
ing market with unemployment
high and likely to rise further, earn-
ings growth muted, debt levels high
and the outlook uncertain, said IHS
Global Insights Howard Archer.
In addition, credit conditions
may well tighten, making it harder
to get a mortgage.
In fact, some mortgage rates are
now rising due to lenders higher
borrowing costs in wholesale mar-
kets and this could well weigh down
on housing market activity.
BY TIM WALLACE
HOUSING

News
17 CITYA.M. 7 MARCH 2012
Ed Miliband backed a Made in Britain campaign
www.RateSetter.com Customer Phoneline: 08442490115
In association with RateSetter: A better way to Save and Borrow, Peer to Peer
MARK WILLIAMS | PEEL HUNT
No. What an absurd idea. Items should be made in countries that
have a competitive advantage. Making goods in the UK is ridicu-
lous, unless they are specialised high-value items.
RICHARD THOMAS | GATEHOUSE BANK
No. It might work for tourists but it is unlikely to appeal to British
consumers. For that reason, I think a bigger Made in Britain label
is unlikely to boost manufacturing in this country.
KEVIN SHEPHERD | BACB
Well, Britain did once have a reputation for high quality items,
although Im not sure if thats still the case. I do find overseas items
break easily though, and it could boost UK manufacturing.
* These views are those of the individuals below and not necessarily those of their company
CITY VIEWS: WOULD YOU BE MORE LIKELY TO
BUY SOMETHING MADE IN BRITAIN? Interviews by PhoebeTorrance
ANALYSIS l OECD inflation
%
All items less
foodless energ
All items
2005 06 07 08 09 10 11 12
5.0
4.0
30
2.0
1.0
0.0
-1.0
Do you think the UK is becoming more protectionist?
In association with
Apply to join today at www.cityam.com/panel
PoliticsHome.com PoliticsHome.com
Ed Miliband has called for a new
Made in Britain label to encour-
age people to buy British.
The government has asked British
firms to stop hiring foreign work-
ers instead of British ones.
And multinational firms say they
are finding it hard to bring in tal-
ent from abroad due to the immi-
gration cap.
So what do you think: are these
policies right to boost growth in
Britain, or is the government just
erecting protectionist barriers?
Have your say by joining our panel.
DC Advisory Partners
The pan-European corporate finance
advisory firm has appointed a third
managing director to its debt advisory
group. Sergio Ronga will be responsible
for providing advice on infrastructure
and social service transactions. Rongas
14-year career in finance includes
almost six years with Macquarie, where
he was a managing director in the debt
advisory team.
Irwin Mitchell
The law firm has appointed Jayne
Schnider as corporate real estate part-
ner. Schnider joins from Taylor Wessing
where she is currently a corporate part-
ner. Schnider's primary focus over the
past 10 years has been on corporate
real estate transactions.
KPMG
KPMGs international real estate prac-
tice has appointed Stephen Barter as
chairman. Barter was previously UK
chief executive of Qatari Diar, part of
the Qatar Investment Authority, and
has held senior roles at Grosvenor and
Richard Ellis (now CBRE). Barter will be
based in London and will focus on
expanding KPMGs international client
base and growing the real estate adviso-
ry business.
Ropes & Gray
The global law firm has announced that
Anand Damodaran will be joining the
London office as a partner in its private
investment funds group. Damodaran will
join Ropes & Gray from White & Case
where he was a senior associate in its
funds practice. He follows partner Matt
Judd, who joined the firms London
practice in February of this year and
with whom he has worked for a number
of years.
Nomura
The Japanese investment bank has
named company veteran Koji Nagai as
the new head of its securities business
as part of a reshuffle aimed at bolster-
ing management of its struggling global
operations.
Marex Spectron
The private broker has hired Willie Sim
as head of foreign exchange for Asia-
Pacific, based in Singapore. It also hired
Simon Durno, Kelvin Jouhar, and Hetal
Patel in its foreign exchange team in
London and Anna Dahan in Geneva.
CITY MOVES | WHOS SWITCHING JOBS Edited by Phoebe Torrance
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Dow drops more
than 200 points
T
HE Dow dropped more than 200
points yesterday, handing Wall
Street its worst day in almost
three months on renewed fears
of a disorderly default in Greece and
concerns that Chinas slowdown
would hit global growth.
Analysts have expected a pullback
for weeks, citing an overstretched
market. Despite the days decline, the
S&P 500 is still up almost 7 per cent
for the year. If fourth-quarter gains
are included, the benchmark index is
still up almost 20 percent since 30
September.
Wall Streets anxiety gauge, the
CBOE Volatility Index or VIX, jumped
about 16 per cent to near 21, rising
above its 50-day moving average for
the first time since November. About
10 stocks fell for every one that rose
the New York Stock Exchange, with
bank and miner shares among the
top decliners.
Equities recent rally has continued
without a substantial pullback since
December, supported in part by
expectations that Europes credit cri-
sis would be contained and Chinas
economy could avoid a hard landing.
It might be just the time we have a
bit of pullback here as this market
begins to reassess what the future
growth prospects for the year look
like, said Burt White, managing
director and chief investment officer
at LPL Financial in Boston.
The Dow Jones industrial average
slid 203.66 points, or 1.57 per cent, to
12,759.15 at the close. The Standard &
Poors 500 Index dropped 20.97
points, or 1.54 per cent, to 1,343.36.
The Nasdaq Composite Index fell
40.16 points, or 1.36 per cent, to
2,910.32.
Apple shares fell, but outperformed
the broader market after volatile
swings in recent days. The stock
closed down 0.5 per cent at $530.26.
Europes downturn appeared ready
to turn into a full-fledged recession
due to a collapse in household spend-
ing, exports and manufacturing in
the final months of 2011, the
European Union said.
Brazils gross domestic product
expanded by a meagre 2.7 per cent in
2011, data showed, adding to con-
cerns after China cut its growth out-
look earlier in the week.
The S&P financial sector index
dropped 2.5 per cent and the KBW
bank index fell 2.7 per cent. Morgan
Stanley lost 5.3 per cent to $17.32.
Basic materials stocks also tumbled
as commodity prices fell.
Aluminium producer Alcoa lost
4.1 per cent to $9.47 and Freeport-
McMoRan Copper & Gold fell 2.5 per
cent to $39.44.
B
RITAINS top share index
ploughed down through sup-
port levels yesterday as slowing
global growth and Greeces
dithering over its debt swap plan
intensified pressure on riskier assets,
prompting a flight to safety and
sparking fears of a deeper sell-off.
Londons blue chip index, which is
heavily weighted towards riskier
banking and commodity stocks, post-
ed its biggest one-day fall since 14
December, shedding 109.02 points or
1.9 per cent to 5,765.80.
The UKs benchmark index fell
through various technical levels
including its 50-day moving average
and more importantly the uptrend
support that had been in place since
late November.
The FTSE 100 move lower today
has taken us through uptrend sup-
port ... 5,700 would beckon near term
on a break here [5,870 level], a
London-based trader said.
Commodity stocks led the fallers as
investors fled to safer havens such as
the dollar, sparking a fall in the price
of crude oil, off recent highs, and a
retreat in base metal prices, which
crimp earnings capabilities of inte-
grated oils and miners.
Russian gold mining group
Polymetal International dropped 6.3
per cent as UBS downgraded its rat-
ing to neutral from buy and cut
its target price and earnings esti-
mates. UBS said without catalysts
such as a strong gold/silver price or
expansion in reserves base, the stock
is unlikely to outperform the sector
in the short term.
The fall in commodity stocks coin-
cided with renewed fears of recession
in the Eurozone as a collapse in
household spending, exports and
manufacturing sucked the life out of
the regions economy in the final
months of 2011.
Accentuating the decline, 2011
GDP growth in emerging economy
Brazil slipped to 2.7 per cent from a
2010 figure of 7.5 per cent. That fol-
lowed China cutting growth forecasts
yesterday.
Worries over a European reces-
sion, emerging market economies
the last bastion of real growth and
the Greek debt swap conundrum
have done nothing to help fragile sen-
timent, which has been compounded
by the recent low volume rally,
Jimmy Yates, head of equities at CMC
Market, said.
Traders said the FTSE 100 index
extended losses on rumours, later
denied by Athens, that Greece would
have to push back Thursdays dead-
line for agreeing a debt swap with pri-
vate creditors and avert a default that
would endanger debt-laden Italy and
Spain.
A disorderly Greek default would
cause more than 1 trillion of dam-
age to the Eurozone and could leave
Italy and Spain dependent on outside
help to stop contagion spreading, the
main bondholders group has said.
Banks and insurers, both of which
helped the FTSE 100 to strong gains
early in 2012, fell as financials with
heavy exposure to Europes debt crisis
were among the stocks worst hit.
Aviva shed 4.7 per cent as Exane
BNP Paribas downgraded its rating
for the British insurer to underper-
form from neutral and reduced its
target price and earnings estimates.
British aircraft parts supplier
Meggitt, which had gained 10 per
cent in the past month. fell 4.9 per
cent after it delivered strong growth
in 2011 profit.
Essar Energy and Cain Energy
both seen as likely candidates to leave
the FTSE 100 this week shed 5.1 and
3.3 per cent respectively.
FTSE sees biggest fall since
November over Greek drama
THELONDON
REPORT
THENEW YORK
REPORT
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Trinity Mirror PLC
47
46
45
44
43
42
29Feb 1 Mar 2Mar 5Mar 6Mar
pp
43.00
6 Mar
TRINITY MIRROR
Deutsche Bank has cut its recommendation on the newspaper group from
buy to hold with a target price of 40, and says it expects the compa-
nys ad trading environment and structural challenges to remain severe. The
broker also expects there to have been a widening of the pension deficit in
recent months, and says that events at competitor News International
make forecasting national newspaper performance very difficult.
ANALYSIS l Sanofi SA
58.5
58.0
57.5
57.0
56.5
56.0
55.5
29Feb 1 Mar 2Mar 5Mar 6Mar
56.20
6 Mar
SANOFI
JP Morgan Cazenove has upgraded the French drugmaker from neutral to
overweight and increased its price target to 66 from 63. The broker
sees rerating potential from increasing visibility on growth as patent expiries
drop out, better resilience from its Lantus franchise, and an upside from its
pipeline from the second quarter. The target price assumes just one of the
three will occur, with a significant further upside if all materialise.
ANALYSIS l Polymetal International PLC
1,125
1,100
1,175
1,050
1,025
1,000
975
950
29Feb 1 Mar 2Mar 5Mar 6Mar
p
950.00
6 Mar
POLYMETAL
UBS has downgraded the Russian mining giant from buy to neutral and
slashed its target price by over a fifth from 1,400p to 1,100p, after a fine-
tuning of its production forecasts and assumptions of higher cash costs led
to a significant earnings cut. The broker cuts its gold output forecast by 1-4
per cent in 2012-15, and increases cost assumptions by 15-22 per cent,
leading to a cut in net income of 8-26 per cent over the same period.
1 Mar 29Feb 2Mar 5Mar 6Mar
5,950
5,850
5,875
5,900
5,775
5,800
5,825
5,925
ANALYSIS l FTSE
5,765.80
6 Mar
Peel Hunt
The independent full-service broking and advi-
sory house has announced the appointment of
Charles Batten. Batten is a highly regarded
name in UK mid and small cap corporate advi-
sory with over 30 years experience in M&A,
corporate broking and equity capital markets
at Lehman, Dresdner Kleinwort and Investec.
He said: Since the buy-out in 2010, Peel Hunt
has grown a compelling equities platform
across the UK mid and small cap space.... I look
forward to working with them.
News
18 CITYA.M. 7 MARCH 2012
A firm fuelled by the same spirit as
the Olympic and Paralympic Games
Mike Sharrock is the
man helping BP to
bring twenty-first
century energy to the
London 2012 Games
Q.
WHAT WAS YOUR BRANDS PRIMARY
REASON FOR BEING INVOLVED WITH
THE GAMES ?
A.
BP has had its home in London for
over 100 years now, and as one of the
largest companies in the UK we
wanted to be part of the celebrations and
contribute to the success of London 2012, it
felt for us the right thing to do, a very natu-
ral fit. We also saw a strong convergence of
values with the Olympic movement. In a
sense, the Olympic and Paralympic Games
stand for the mobilisation of human ener-
gy to achieve extraordinary performance
and that resonated very strongly inside BP.
Q.
HOW DID YOU STRUCTURE THE
CASE FOR INVOLVEMENT TO
THE BOARD?
A.
We thought very deeply
about the sources of
value from the invest-
ment, and there were four
main ones: a positive brand
projection; the way we could
energise our people through
the association; also the
extraordinary opportunities to
engage our business partners; and
finally the chance to excite our cus-
tomers. But we were very clear that we
wanted to structure our involvement in
areas that were very real, where we had a
real contribution to make. As an oil and gas
partner supplying fuel to the Games, as a
sustainability partner and offsetting part-
ner and as premier partner to the Cultural
Olympiad, our associations are all areas
that felt very natural to BP.
Q.
HOW HAVE YOU STRUCTURED YOUR
BUSINESS TO MAXIMISE OLYMPIC
OPPORTUNITIES?
A.
Were working to ensure that the
5,000 vehicles of the Olympic fleet
are fuelled with not just the best fuel
of today but a projection of the best fuel of
the next 10-15 years. That isnt something
were creating for the Games, it reflects
BPs strategic direction and the investment
weve made. Weve had people from across
the company, scientists, technology experts
and others all working to create the next
generation of biofuels. The Olympics pro-
vides an opportunity
for a large number of
teams from across BP to
work together to try and
deliver something extraordinary.
Q.
HOW HAS THE ANNOUNCEMENT OF
BPS INVOLVEMENT AFFECTED ITS
BUSINESS?
A.
It has generated huge excitement
internally, initially in the UK and
more widely as weve rolled out
more global programmes. Weve extended
our partnerships elsewhere, becoming a
top-level partner of the US Olympic com-
mittee in early 2010 and more recently
extending into another seven countries.
Externally weve seen the association deliv-
ering a positive impact to our brand.
Q.
HOW WILL YOU BE USING THE
COMMERCIAL OPPORTUNITIES OF THE
GAMES FOR MAXIMUM EFFECT?
A.
We want to ensure that we are con-
tributing to a more sustainable
Games. As well as using the best
fuels, were offsetting the remaining CO2
from the Olympic fleet and offering to off-
set the carbon of all the ticketed spectators
travelling to the Games.
As the premier partner of the Cultural
Olympiad and the London 2012 Festival
were using some very longstanding part-
nerships with some of the UKs leading cul-
tural institutions. Weve been involved in
some extraordinary projects over the last
couple of years, as we will be with the festi-
val this summer. One example is the
Olympic Journey, a free exhibition in the
Royal Opera House telling the story of the
Olympics from ancient Greece to the pres-
ent day, in partnership with the Olympic
Museum in Lausanne.
Were also bringing the excitement of
the Games to our 1m customers a day in
the UK. Our UK retail business has exciting
plans rolling out in the next few months.
One of the great things about the
Olympics is it gives us an opportunity to do
things that we wouldnt in a normal year.
The Tate Movie Project, for instance,
involved 30,000 children across the UK in
the making of a movie that won a chil-
drens Bafta.
Q.
WHAT HAS SURPRISED YOU MOST
ABOUT YOUR INVOLVEMENT?
A.
The amount of inspiration there is in
being associated with the Olympic
movement. Were seeing that in all
our activities and most of all in what were
doing with the athletes. Were providing
fuel for over 200 athletes on their journey
to the Games but were also supporting six
athletes in a special way, three Olympic
hopefuls, three Paralympic hopefuls, and
they are tremendous role models and
inspiring individuals. Weve also created
programmes with an inspirational feature.
Our traders in Canary Wharf had devel-
oped a game about orange juice trading to
train our oil traders on. We turned it into
an activity for schools about trading fuel
for the Games. The teams also get judged
on how they live up to the Olympic and
Paralympic values. This has been rolled out
across the UK every month there is a spe-
cial event at which schools compete. Its an
example of the Gamess inspiring power.
Mike Sharrock is BPs partnership director for
London 2012.
The Olympics
provides an
opportunity
for teams
across BP to
work together
142 DAYS TO GO
COUNTDOWN
TO THE LONDON
2012
OLYMPIC
GAMES
Q A
&
Business Features
19
WORDS BY MARC SIDWELL
Moved by the inspiring power of the Games Picture: Laura Lean / CITY A.M.
L
IBERAL Democrats are pushing for a man-
sion tax, in the form of an annual levy on
houses worth over 2m. They claim this
would raise significant funds for the
Treasury, would target the super-rich and
would be more economically efficient than
taxing peoples incomes.
Its depressing that some consider it the
function of the tax system to target certain
groups, rather than to raise funds for the provi-
sion of public services. That aside, the other
arguments outlined above were busted in
Taxing Mansions, a paper released by the
Centre for Policy Studies on Monday.
Examining Savillss data book, we found that
the tax would unsurprisingly penalise those
whose property value happened to have sub-
stantially increased during their period of own-
ership, those often described as income poor,
asset rich.
It would mainly be paid by people in
London, many of whom are not foreign oli-
garchs with huge property portfolios, but have
lived in the city for decades and may be cash-
poor pensioners. Administering the valuation
of the properties would be a nightmare. And
the maximum it would raise in revenue would
be around 1bn, when taxation of property
already occupies a higher proportion of GDP
here than in any OECD country.
A common response from the advocates of
the mansion tax to this weight of evidence is to
simply state that the policy is fair or the right
thing to do. Fairness is the buzzword of politi-
cians across the board, and it usually comes in
the context of wanting other people to pay
more tax.
Whether the richest in our society should
pay more is a debate in itself. But lets take for
granted that the Lib Dems think that wealthier
people should pay more tax than they current-
ly do, which appears to be the principle under-
pinning this policy move. Is the mansion tax
fair?
Lets suppose there are two people, Person A
and Person B. Person A lives in a house valued
at 5m, but has a 4m mortgage, meaning his
net wealth is 1m. Person B lives in a house
worth 1.9m, but without a mortgage. Person
Bs net wealth is therefore 1.9m. Under the
principle of the more wealthy paying more tax,
one might think that B should pay. Under the
Lib Dem proposals, however, its Person A who
is liable.
Instead, imagine Person A owns a London
property worth 3m. Person B owns two prop-
erties, each worth 1.9m. The principle under-
pinning the policy would suggest that B should
pay more. The Lib Dem proposals, again, would
see only Person A as liable.
Evidently, the tax is poor at determining
who is wealthy it judges wealth by single
property values, ignoring mortgages and mul-
tiple home-ownership.
It also ignores the history of your invest-
ment. Person A might live in a house worth
5m, for which he paid 2m 10 years ago.
Person B, on the other hand, might live in a
house worth 5m, having paid 6m last year.
The Lib Dem policy would see both paying the
tax, even though B has lost on his investment.
Or take the case of a rich couple, both cur-
rently living in 1.9m properties, but who
decide to move into a 3.8m home together.
The policy suggests that neither partner
should be considered wealthy if they live in
houses below the 2m benchmark but by
virtue of moving into a new home, they
become wealthy, even though their incomes
and the combined value of their housing assets
remain unchanged.
In all of these examples, its clear that the
policy fails to live up to its desired principle of
taxing the wealthy more, partly because it is
incorrect in identifying what wealth is. Why is
someone living in a 5m home considered any
wealthier than someone holding 5m in cash,
or 5m in shares, for example?
Then there are the unintended conse-
quences, in the form of the scope and cliff-edge
effects:
l What happens if the 2m+ property is
also a place of business, such as a bed and
breakfast or a care home? Would these busi-
nesses face an increase in their cost base? And
if not, why not?
l Why would any sane homeowner with a
property value of just under 2m ever do any-
thing to improve its value, creating a future tax
liability for themselves? Equally, why wouldnt
anyone with a house valued over 2m simply
engineer a deterioration in their current house
to reduce the value below the threshold?
The truth is, this mansion tax proposal is ill
thought-through, unfair and illogical.
Squeezing people to obtain higher yields after
theyve met their income and consumption tax
duties in order to fill the public purse is just a
clear abuse of tax-raising authority, with little
link to the concept of fairness, even on the pro-
ponents own terms.
Ryan Bourne is head of economic research for the
Centre for Policy Studies.
20
The Forum
CITYA.M. 7 MARCH 2012
It would penalise those
whose property value has
grown in their ownership
A so-called mansion tax will
not achieve fairness and the
revenue gain will be modest
cityam.com/forum
RYAN BOURNE
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
T
HE ECONOMIC recovery in the United
States is well underway. The trough of
the recession was reached in the second
quarter of 2009. Since then, real GDP has
risen for ten successive quarters and now
stands above its previous peak at the end of
2007. By any standards, the recession in
America is over.
The speed of recovery was fairly sluggish
when compared with most recessions since
the Second World War. But this is not surpris-
ing given the truly massive shock of the finan-
cial crisis. Unemployment does remain high,
but it has fallen nearly 2 per cent since a peak
of 10 per cent at the end of 2009.
Contrary to received wisdom, the recovery
appears to have been driven by expansionary
fiscal contraction. To many people this phrase
is an oxymoron. How can fiscal contraction be
expansionary? But the evidence suggests that
this is exactly what has been happening in the
United States.
Real GDP has grown by over 6 per cent since
the second quarter of 2009. Where has the
growth come from? Not from public spend-
ing. Current public expenditure in real terms
fell by $66bn (41.7bn), or by some 2.6 per cent,
between the second quarter of 2009 and the
fourth quarter of 2011.
The private sector has grown and the public
sector has contracted. Private consumption
rose by $500bn, by over 5 per cent. Most
impressively of all, investment rose by $470bn,
or a staggering 33 per cent. True, some of this
was a turn round in the inventory position,
but delving into the data we can see that,
while residential investment flat-lined, invest-
ment in equipment and software rose by 32
per cent. Overall, the private sector delivered
growth.
The employment figures tell the same story.
Employment changes tend to lag behind out-
put, and the lowest level of total employment
was not reached until February 2010, when
PAUL ORMEROD
21
As public sector
jobs fell, growth
was boosted by
private hirings
The US recovery
wasnt wrecked
by massive cuts
Welfare despair
[Re: War on Britains aspira-
tional classes, yesterday]
Britain is a welfare state where
politicians build their careers sti-
fling initiative, encouraging (or at
least accepting) widespread ben-
efit fraud and cutting traditional
support networks like families
and friendly societies. Why work
in such a set-up? Changing this
mindset would let us live fulfilled
lives. I don't see this notion
appealing to many politicians.
Name Withheld
Taxpayer revolt
The UK wages war on those who
do work and rewards those who
do not. The tax system effective-
ly wipes out the incentive for the
economy to grow and for people
save. We urgently need to shrink
the state, cut taxes and incen-
tivise business only the private
sector can effectively grow the
economy. Theres plenty we can
do. Like unhappy shareholders,
we need to vote the managers
off and restructure.
Jamie Lin
Speak your mind
The Forum is open for you to
take part. Got a sharp comment
on one of todays columns or
rapid response topics? Do you
have another subject relating to
business and the economy you
want to share your opinion on?
We want to hear your views.
Readers are invited to comment
on the web: cityam.com/forum;
by email: theforum@cityam.com;
and on Twitter: @cityamforum.
The best responses will be
reprinted in The Forum.
RAPID RESPONSES
BY JAMIE WHYTE
CITYA.M. 7 MARCH 2012
The Forum
W
HAT may you
do without
being punished
by the state?
With 25,000 pages of
new legislation every
year, and many laws
expressed in hopelessly
vague language, no one
can be sure. But there is a more straightforward reason
we cannot know what will land us in trouble. The
authorities might punish us even though we have bro-
ken no law.
Last month the government passed retrospective
legislation allowing it to confiscate hundreds of mil-
lions of pounds from British banks. It declared that
earnings that were not taxable when made would be
treated as if they were. People who were obeying the
law by not paying tax on these earnings will neverthe-
less be punished if they do not pay them now.
Some government ministers regretted that retro-
spective legislation was necessary to get their hands
on the money. In future, they hope, retrospective legis-
lation will be made unnecessary by their proposed
general anti-tax avoidance rule (GAAR). So it will. But
this hardly improves matters, because a GAAR is
nothing but an explicit suspension of the rule of law in
taxation.
To get the gist of a GAAR, you need only under-
stand the tax regime of Malawi while Hastings Banda
was President for Life. Malawi had corporation tax,
but a businessman would discover his tax bill only
when Bandas henchmen visited to let him know the
donation the president thought appropriate.
Similarly, Britains GAAR will empower government
officials to decide whether you should pay the amount
of tax required by law or whether you must pay more.
Retrospective legislation will be unnecessary because
tax demands will no longer need to be backed by spe-
cific legislation. It will be pointless arguing that,
according to the law, you owe only 100 in tax. If an
official deems the spirit of the law demands 100m
from you, then that is what you will have to pay.
Many Brits will celebrate anything that hammers
fat cats, even replacing a literal interpretation of the
law with a spiritual one. Yet they should fear a GAAR,
for it will create costly uncertainty. Because a compa-
nys tax rate may end up higher than the specified
rate, prudent managers will raise the pre-tax hurdle
rate of return they require before making an invest-
ment. And higher hurdle rates mean less investment
and less economic activity.
Even the Treasury may lose out, since less economic
activity means less tax revenue. David Cameron may
end up emulating Banda not only in his method of tax
collection but also in the quantity collected.
Like most of this governments economic initiatives
such as appointing ministerial buddies to large cor-
porates and subsidising lending to favoured industries
a GAAR invites crony capitalism. Firms that want to
avoid having a tax surcharge slapped on them will be
keen to help government ministers with their various
political causes. Many have already signed social
responsibility deals.
Perhaps the Conservatives have undergone an ideo-
logical conversion, abandoning the rule of law and
market capitalism in favour of the kind of state-direct-
ed capitalism favoured by the likes of Banda. Or per-
haps their new policies reflect nothing more than
populist opportunism. Whichever it is, anyone who
values his liberty and prosperity had better hope they
soon change course.
Jamie Whyte is a senior fellow of the Cobden
Centre
The tax avoidance rule
that favours cronyism
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
129.2m people were employed.
Between then and January 2012, public sec-
tor employment fell by 500,000. But private
sector employment rose by nearly 3.7m a net
increase of 3.2m. A net increase of over 3m
jobs when the public sector was being cut is
remarkable.
The falls in current public expenditure are
particularly significant. When economists use
their models to try and calculate the size of
the multiplier how much the economy
eventually expands following a fiscal stimulus
this is the standard way of asking the ques-
tion. The models, for what they are worth, esti-
mate the overall impact of a sustained increase
in current public expenditure. Well, in real-life
America, a sustained reduction was accom-
plished alongside overall growth and a sub-
stantial increase in employment.
Other things have been going on. The
Federal Reserve learned a crucial lesson from
the 1930s and followed an expansionary mon-
etary policy, in complete contrast to the disas-
trous monetary contractions during the Great
Depression. But current public expenditure,
the classic tool of fiscal policy, has been cut
and jobs have been lost in the public sector.
And all the while, overall output and employ-
ment have grown.
Paul Ormerod is a founding partner of Volterra
Partners and fellow of the British Academy for the
Social Sciences.
FX experts map out the
direction for the dollar
We ask our experts whether the greenback will continue to be
seen as the safe currency or if it will have a change in fortunes
T
HE dollar-yen pair has been on the tear
since the start of February, climbing
over 500 pips to hit highs not seen
since May of 2011 around 81.84. The
strong month-long trend line was broken
though yesterday around 81.30 and it does
look ripe for a correction. Look to sell any
rebounds towards 81.40/50 with 80.00
the first target, then 79.50. Spread Co
quotes a spread of 81.06- 81.09 on dollar-
yen.
Sterling-Aussie dollar has pottered
around in a fairly tight range over the past
month, but with the recent weakness in mar-
kets might we be seeing an improvement in
sterlings fortunes? A reduction in Chinese
growth expectations has unnerved markets,
and this could well put a dampener on the
Aussies seemingly unstoppable charge high-
er. All good things must come to an end, and
just like the shift in power between the
English and Aussie cricket teams, perhaps
sterling-Aussie dollar is set for a move high-
er as some traders opt for the northern
hemisphere over the southern. IGs price is
Au$1.4870-Au$1.4884.
This weeks economic data out of
Australia could well herald a change in senti-
ment for the Australian dollar-dollar with
concerns about future Chinese economic
growth starting to potentially weigh on the
upside. CMC Markets spread on Australian
dollar-dollar is $1.05914-$1.50921.
The euro continued its dive yesterday and
clients were furiously trying to pick the bot-
tom only to continue to have their fingers
burnt. The single currency headed back
towards the $1.3000 level as investors fled
the riskier currencies and sought safety in
the US dollar. Capital Spreads quotes a price
of $1.3115-$1.3116 for euro-dollar.
The Kiwi dollar has had a torrid time of
things so far this week, seeing a 1.05 per
cent fall against the US dollar. As with the
Aussie dollar, the Kiwi is at the mercy of the
Chinese slowdown and the European crisis.
Look for continuing downsides in the Kiwi-
dollar, testing support at the $0.8115 level.
If this breaks, look for Fibonacci support at
$0.8082. IG Index quotes New Zealand dol-
lar-dollar at $0.8108-$0.8119.
Craig Drake
THE TIPSTER
YEN RISE COULD BE
RIPE FOR A PRICE
CORRECTION
22
Wealth Management| Foreign Exchange
CITYA.M. 7 MARCH 2012
J
UST how long can the appreciation of the Nordic curren-
cies last? When the Swiss National Bank (SNB) last year
put in place measures to defend a floor in the euro-Swiss
franc exchange rate, options for havens as the European
debt crisis escalated were in short supply. For some, the Nordic
currencies of Sweden and Norway seemed like the best route to
take.
In a climate of constant policy-maker manipulation of cur-
rencies, the Riksbank governor held firm against pressures to
weaken the Swedish krona. At the same time, Oystein Olsen,
head of the Norges Bank, publicly stated that the Norwegian
central bank had a policy of not intervening.
But this non-interventionist policy is now coming under
some pressure. The Norwegian krone has risen over 6 per cent
against the dollar so far this year and more than 4 per cent
against the euro (see charts, below.) And as was the case
when now-deposed SNB chairman Philipp Hildebrand imple-
mented tough capital controls in an effort to halt the rise of
the Swiss franc, both Sweden and Norway are feeling the burn
as their respective currencies overheat. Swedish exports, upon
which the country is highly dependent, fell by 6 per cent in
December nudging the Riksbank into cutting the base rate
for the second straight month.
Oystien Olsten last year dissuaded investors from seeing the
krone as a haven currency warning that: Investors must
realise that the door
is narrow when they
want to leave the
krone yet its appre-
ciation against the
other majors demon-
strates that it has
been treated as such.
And in a risk-off envi-
ronment, the lack of
liquidity in the Nordic
currencies that
Olsten alluded to will
come to hurt them.
Should the de
facto haven inflows
into the Nordics con-
tinue to dent export-
ing industries, dont
be surprised to see
the respective central
banks previously
staunch non-inter-
ventionist policies
crumble into the
North Sea.
NORDICS MAY
HAVE RUN
THEIR COURSE
CRAIG DRAKE
FINANCIAL FEATURES WRITER
CMC MARKETS
BRENDA KELLY
When the US was downgrad-
ed from AAA to AA+ by
Standard and Poor's last sum-
mer, many believed that the
safe haven status enjoyed by
the dollar was coming to an
end. This proved not to be.
A look at the US 10-year
Treasury indicates that level of
demand the yield, which falls
when the price rises, declined
from 3.34 per cent a year ago
to its current level below 2 per
cent. With the Fed pledging to
keep interest rates near zero
till the end of 2014, this also
impacts the long-term yields
via the purchase of bonds
under Operation Twist.
The Eurozone had a torrid
2011 and yet the euro-dollar
exchange rate pretty much
ended the year around the
same level as it began.
If one considers the dollar
index as a key metric the
main component of which is
the euro then the euros diffi-
culty is the dollars gain. The
recent high at $1.5690 was a
test of the resistance area
around previous highs, so the
outlook is for a move to the
downside off of this level.
ETX CAPITAL
MANOJ LADWA
Buy dollars and youll be
wearing diamonds, as I have
often been told by currency
traders. Given the rally in
commodities and equities
over the last few months,
their timing may have been
slightly out but they finally
look like they are coming
good. In order to understand
the current appeal of the dol-
lar, its important to take a
look back as to just why it fell
out of favour. Firstly, gold has
been the safe haven asset of
choice. But with the precious
metal looking increasingly
overbought, the risk versus
reward doesnt quite appeal
at current levels. Secondly,
after two rounds of quantita-
tive easing from the Federal
Reserve, the dollar has been
decimated. But as the US
economy shows signs of
improvement, its looking
increasingly unlikely the Fed
will embark on another round
of QE. In an increasingly pre-
carious economic environ-
ment, the greenback simply
looks like the best of a bad
bunch.
HIFX
CHRIS TOWNER
After a euphoric start to the
year, March has so far been
a month for pause and
reflection. The rally in equi-
ties that we have seen has
been one of relief rather
than direction and this has
been down to the successful
buying of time operation
that the ECB has performed
via the trillion euro LTRO
operations.
The relief that 2012 has not
started with a collapse of
Greece leading on to uncon-
trollable systemic risk in the
financial markets has boost-
ed confidence and led to risk
aggression weakening the
US dollar and allowing euro-
dollar to rally.
Has the LTRO solved
Europes deep-rooted prob-
lems? No, but it has been
successful in buying time.
However, the market is
quick to realise that this
money needs to be paid
back and that governments
have years of austerity in
front of them. We are not
out of the woods, and until
then you are better off with
a US dollar in your pocket.
CAPITAL SPREADS
ANGUS CAMPBELL
The markets were in defensive
mode yesterday, and when it
comes to a sell off of risk
assets then the US dollar usu-
ally benefits. Yesterday was no
exception as concerns over the
European state of affairs con-
tinued to mount when this is
combined with the increasing
rhetoric from the Fed that
stimulus is coming to an end, it
only means one direction for
the dollar, which is upwards.
The dollar has always been
considered the safe haven
asset of all safe havens. While
it has suffered a serious depre-
ciation in the past few years
due to the Feds program of
considerable monetary easing,
the recent bout of strength
has served to remind us that
its not gold thats the real pro-
tective asset to pile your
money into during times of
uncertainty, but the dollar. You
may not be getting much bang
for your buck if you buy US
Treasuries at the moment but
the prospect of actually get-
ting your money back from the
US government is a lot greater
than if you were to lend it to a
European peripheral state.
ANALYSIS l Euro-Norwegian krone
2011 19Dec 2012 16Jan 30Jan 13Feb 27Feb
7.80
7.75
7.70
7.65
7.60
7.50
7.55
7.45
Kr
ANALYSIS l Dollar-Norwegian krone
2011 19Dec 2012 16Jan 30Jan 13Feb 27Feb
6.00
5.90
5.80
5.70
5.60
Kr
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Is night closing in on yen growth? Picture: GETTY
LON GD ONCE FIX AM...........1685.50 -12.50
SILVER LDN FIX AM ..................32.89 -1.30
MAPLE LEAF 1 OZ ....................35.35 -1.34
LON PLATINUM AM................1632.00 -33.00
LON PALLADIUM AM...............688.00 -18.00
ALUMINIUM CASH .................2253.00 -42.00
COPPER CASH ......................8501.50 -73.00
LEAD CASH...........................2122.00 -11.00
NICKEL CASH......................19235.00 -150.00
TIN CASH.............................22900.00 -725.00
ZINC CASH ............................2067.50 -20.50
BRENT SPOT INDEX................123.93 -0.74
SOYA .....................................1319.25 -9.00
COCOA..................................2314.00 -44.00
COFFEE...................................201.50 -0.15
KRUG.....................................1738.40 -28.50
WHEAT ....................................166.75 -1.05
AIR LIQUIDE........................................95.50 -3.44 100.65 80.90
ALLIANZ..............................................86.79 -3.38 107.45 56.16
ANHEUS-BUSCH INBEV ....................50.20 -0.75 51.43 33.85
ARCELORMITTAL...............................14.46 -0.84 26.85 10.47
AXA......................................................11.73 -0.60 15.97 7.88
BANCO SANTANDER...........................5.95 -0.28 8.42 4.94
BASF SE..............................................62.42 -3.23 70.22 42.19
BAYER.................................................53.00 -2.22 59.44 35.36
BBVA......................................................6.33 -0.36 8.81 4.94
BMW ....................................................67.02 -3.61 73.85 43.49
BNP PARIBAS.....................................35.00 -2.40 55.44 22.72
CARREFOUR ......................................17.74 -0.96 29.25 14.66
CRH PLC .............................................15.30 -0.83 17.03 10.28
DAIMLER.............................................43.58 -2.43 53.95 29.02
DANONE..............................................50.58 -1.15 53.16 41.92
DEUTSCHE BANK..............................33.33 -1.80 46.33 20.79
DEUTSCHE BOERSE .........................45.97 -1.64 57.68 35.65
DEUTSCHE TELEKOM.........................8.49 -0.19 11.38 7.88
E.ON.....................................................16.96 -0.33 23.58 12.50
ENEL......................................................3.04 -0.08 4.86 2.78
ENI .......................................................17.27 -0.22 18.18 11.83
FRANCE TELECOM............................11.01 -0.33 15.98 11.01
GDF SUEZ ...........................................19.32 -0.41 28.98 17.65
GENERALI ASS...................................12.38 -0.40 16.44 10.34
IBERDROLA..........................................4.37 -0.11 5.95 4.16
INDITEX ...............................................66.62 -2.02 70.15 50.92
ING GROEP CVA...................................6.51 -0.37 9.50 4.21
INTESA SANPAOLO.............................1.43 -0.07 2.31 0.85
KON.PHILIPS ELECTR.......................14.95 -0.62 24.10 12.01
L'OREAL..............................................85.85 -2.63 91.24 68.83
LVMH..................................................124.60 -4.00 132.65 94.16
MUNICH RE.......................................105.65 -3.40 120.80 77.80
NOKIA....................................................3.75 -0.14 6.36 3.33
REPSOL YPF.......................................19.39 -0.56 24.90 17.31
RWE.....................................................34.45 -0.05 48.29 21.15
SAINT-GOBAIN...................................33.60 -2.01 47.64 26.07
SANOFI ................................................56.20 -1.42 58.08 42.85
SAP......................................................50.75 -0.64 51.82 32.88
SCHNEIDER ELECTRIC.....................48.48 -2.90 61.83 35.00
SIEMENS .............................................72.55 -1.72 99.39 62.13
SOCIETE GENERALE.........................23.00 -1.95 49.47 14.32
TELECOM ITALIA..................................0.85 -0.01 1.15 0.70
TELEFONICA ......................................12.42 -0.37 18.34 12.42
TOTAL..................................................41.61 -0.74 44.55 29.40
UNIBAIL-RODAMCO SE...................143.40 -3.80 162.95 123.30
UNICREDIT............................................3.88 -0.21 12.44 2.20
UNILEVER CVA...................................24.93 -0.35 27.16 20.90
VINCI ....................................................37.76 -1.74 45.48 28.46
VIVENDI ...............................................13.55 -0.60 21.37 13.54
VOLKSWAGEN VORZ ......................136.45 -6.50 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5765.80 -109.02 -1.86
FTSE 250 INDEX. . . . . . . . 11144.10 -270.00 -2.37
FTSE UK ALL SHARE . . . . 2986.54 -57.99 -1.90
FTSE AIMALL SH . . . . . . . . 787.86 -34.64 -4.21
DOWJONES INDUS 30 . . 12759.15 -203.66 -1.57
S&P 500 . . . . . . . . . . . . . . . 1343.36 -20.97 -1.54
NASDAQ COMPOSITE . . . 2910.32 -40.16 -1.36
FTSEUROFIRST 300 . . . . . 1052.11 -28.43 -2.63
NIKKEI 225 . . . . . . . . . . . . . 9637.63 -60.96 -0.63
DAX 30 PERFORMANCE. . 6633.11 -233.35 -3.40
CAC 40 . . . . . . . . . . . . . . . . 3362.56 -124.98 -3.58
SHANGHAI SE INDEX . . . . 2410.45 -34.56 -1.41
HANG SENG. . . . . . . . . . . 20806.25 -459.06 -2.16
S&P/ASX 20 INDEX . . . . . . 2494.80 0.00 0.00
ASX ALL ORDINARIES . . . 4295.50 0.00 0.00
BOVESPA SAO PAOLO . . 65114.15-1849.88 -2.76
ISEQ OVERALL INDEX . . . 3132.57 -93.67 -2.90
STRAITS TIMES . . . . . . . . . 2904.76 -1.93 -0.07
IGBM. . . . . . . . . . . . . . . . . . . 822.76 -29.11 -3.42
SWISS MARKET INDEX. . . 6047.53 -106.38 -1.73
Price Chg %chg
3M........................................................84.95 -2.11 98.19 68.63
ABBOTT LABS ...................................56.35 -0.93 57.52 46.29
ALCOA ..................................................9.47 -0.40 18.47 8.45
ALTRIA GROUP..................................30.08 -0.18 30.40 23.20
AMAZON.COM..................................181.09 0.83 246.71 160.59
AMERICAN EXPRESS........................51.74 -1.23 54.45 41.30
AMGEN INC.........................................66.54 -0.69 70.00 47.66
APPLE...............................................530.26 -2.90 548.21 310.50
AT&T....................................................30.73 -0.27 31.94 27.27
BANK OF AMERICA.............................7.71 -0.26 14.70 4.92
BERKSHIRE HATAW B.......................78.47 -0.70 86.66 65.35
BOEING CO.........................................72.56 -1.57 80.65 56.01
CATERPILLAR..................................105.93 -4.16 116.95 67.54
CHEVRON.........................................108.85 -0.47 110.99 86.68
CISCO SYSTEMS................................19.48 -0.12 20.49 13.30
CITIGROUP.........................................32.12 -1.56 46.90 21.40
COCA-COLA.......................................68.76 -0.47 71.77 61.29
COMCAST CLASS A..........................28.92 -0.18 29.92 19.19
CONOCOPHILLIPS.............................76.45 -1.11 81.80 58.65
CVS/CAREMARK................................44.79 -0.38 45.39 31.30
DU PONT(EI) DE NMR........................50.03 -0.86 57.50 37.10
EXXON MOBIL....................................85.86 -1.15 88.13 63.47
GENERAL ELECTRIC.........................18.42 -0.43 20.86 14.02
GOOGLE A........................................604.96 -9.29 670.25 473.02
HEWLETT PACKARD.........................24.17 -0.84 43.45 19.92
HOME DEPOT.....................................46.39 -1.00 48.07 28.13
IBM.....................................................197.26 -3.40 201.19 151.71
INTEL CORP .......................................26.61 0.07 27.50 19.16
J.P.MORGAN CHASE.........................39.32 -1.08 47.80 27.85
JOHNSON & JOHNSON.....................64.35 -0.56 68.05 55.76
KRAFT FOODS A................................38.27 -0.08 39.06 24.30
MC DONALD'S CORP ........................99.89 -0.05 102.22 72.89
MERCK AND CO. NEW......................37.44 -1.01 39.43 29.47
MICROSOFT........................................31.56 -0.25 32.44 23.65
OCCID. PETROLEUM.......................101.03 -2.49 117.89 66.36
ORACLE CORP...................................29.95 -0.30 36.50 24.72
PEPSICO.............................................62.28 -0.51 71.89 58.50
PFIZER ................................................21.27 -0.24 22.17 16.63
PHILIP MORRIS INTL .........................84.06 -1.36 85.43 60.45
PROCTER AND GAMBLE ..................66.84 -0.11 67.77 56.57
QUALCOMM INC ................................61.56 -0.55 63.81 45.98
SCHLUMBERGER ..............................73.79 -1.90 95.53 54.79
TRAVELERS CIES..............................56.99 -1.51 64.17 45.97
UNITED TECHNOLOGIE ....................81.39 -1.90 91.83 66.87
UNITEDHEALTH GROUP...................54.46 -0.58 56.16 41.27
VERIZON COMMS ..............................38.69 -0.31 40.48 32.28
VISA CL A..........................................114.84 -1.40 119.36 70.45
WAL-MART STORES..........................58.97 -0.44 62.63 48.31
WALT DISNEY CO ..............................42.00 -0.70 44.34 28.19
WELLS FARGO & CO.........................30.11 -0.87 32.97 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.263 0.00
LIBOR Euro - 12 months ................1.560 -0.01
LIBOR USD - overnight...................0.140 0.01
LIBOR USD - 12 months.................1.054 0.00
HaIifax mortgage rate .....................3.990 -0.02
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.500 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.080 -0.04
European repo rate.........................0.131 0.00
Euro Euribor ....................................0.323 0.00
The vix index ...................................20.79 2.74
The baItic dry index ........................782.0 11.00
Markit iBoxx...................................243.30 -0.31
Markit iTraxx..................................134.36 4.45
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
BAE Systems . . . . . .304.1 -3.9 340.8 248.1
Chemring Group . . . .405.8 -22.6 736.5 368.8
Cobham . . . . . . . . . . .186.3 -6.0 236.5 165.9
Meggitt . . . . . . . . . . . .380.5 -19.7 401.1 304.9
QinetiQ Group . . . . . .150.1 -1.1 153.2 101.5
RoIIs-Royce HoIdi . . .800.5 -18.0 850.0 557.5
Senior . . . . . . . . . . . . .186.2 -7.0 201.0 132.6
UItra EIectronics . . .1677.0 -46.0 1752.0 1305.0
GKN . . . . . . . . . . . . . .205.6 -8.4 245.0 157.0
BarcIays . . . . . . . . . . .238.9 -14.0 308.9 138.9
HSBC HoIdings . . . . .548.4 -10.2 670.6 463.5
LIoyds Banking Gr . . .34.2 -1.4 62.4 21.8
RoyaI Bank of Sco . . .26.2 -1.2 44.4 17.3
Standard Chartere .1565.0 -47.0 1690.0 1169.5
AG Barr . . . . . . . . . .1166.0 -2.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .380.0 -9.1 444.0 289.9
Diageo . . . . . . . . . . .1508.5 -19.0 1529.0 1112.0
SABMiIIer . . . . . . . . .2555.0 -34.5 2589.5 1979.0
AZ EIectronic Mat . . .279.3 -13.7 338.1 206.1
Croda Internation . .2107.0 -18.0 2182.0 1556.0
EIementis . . . . . . . . . .177.0 -6.7 187.4 107.5
Johnson Matthey . .2212.0 -62.0 2351.0 1523.0
Victrex . . . . . . . . . . .1282.0 -50.0 1590.0 1025.0
YuIe Catto & Co . . . . .199.0 -5.3 253.0 148.0
C/$ 1.3124 0.0092
C/ 0.8347 0.0015
C/ 105.98 1.7505
/C 1.1979 0.0022
/$ 1.5719 0.0143
/ 127.97 2.3280
FTSE 100
5765.80
109.02
FTSE 250
11144.10
270.00
FTSE ALLSHARE
2986.54
57.99
DOW
12759.15
203.66
NASDAQ
2910.32
40.16
S&P 500
1343.36
20.97
Smith (DS) . . . . . . . . .170.0 -4.0 183.4 113.3
Smiths Group . . . . .1036.0 -34.0 1353.0 869.5
Brown (N.) Group . . .232.7 -1.9 304.5 227.0
Carpetright . . . . . . . . .600.0 -34.0 770.5 375.0
Debenhams . . . . . . . . .71.8 -1.2 74.8 51.2
Dignity . . . . . . . . . . . .809.0 -11.0 854.5 690.0
Dixons RetaiI . . . . . . .15.0 -0.2 19.9 9.4
DuneImGroup . . . . . .483.0 0.2 524.5 383.9
HaIfords Group . . . . .303.2 -7.2 405.9 268.6
Home RetaiI Group . .101.6 -1.4 228.5 72.5
Inchcape . . . . . . . . . .359.9 -13.1 425.4 268.1
JD Sports Fashion . .780.0 -34.5 1030.0 570.0
Kesa EIectricaIs . . . . .71.1 -2.3 151.4 60.2
Kingfisher . . . . . . . . .274.5 -7.8 287.1 217.0
Marks & Spencer G . .349.8 -9.5 402.2 301.8
Next . . . . . . . . . . . . .2708.0 -38.0 2810.0 1868.0
Sports Direct Int . . . .278.7 -8.7 296.1 179.6
WH Smith . . . . . . . . . .518.0 -16.0 559.0 433.8
Smith & Nephew . . . .610.5 -6.0 718.5 521.0
Synergy HeaIth . . . . .822.5 -8.0 981.0 808.0
Barratt DeveIopme . .136.8 -6.2 149.2 67.5
BeIIway . . . . . . . . . . . .783.5 -16.5 820.5 540.5
BerkeIey Group Ho .1322.0 -38.0 1394.0 960.0
BaIfour Beatty . . . . . .267.0 -5.0 357.3 214.6
CRH . . . . . . . . . . . . .1285.0 -55.0 1687.0 1053.0
GaIIiford Try . . . . . . . .600.0 -4.5 605.1 332.8
Kier Group . . . . . . . .1183.0 -23.0 1489.0 1097.0
Drax Group . . . . . . . .495.1 -7.9 581.5 371.9
SSE . . . . . . . . . . . . . .1292.0 -23.0 1423.0 1184.0
Domino Printing S . .657.0 -1.0 705.0 434.3
HaIma . . . . . . . . . . . . .376.7 -15.1 429.6 306.3
Laird . . . . . . . . . . . . . .184.6 4.9 207.0 127.9
Morgan CrucibIe C . .330.0 -11.1 360.0 224.0
Oxford Instrument .1145.0 1.0 1175.0 600.5
Renishaw . . . . . . . . .1399.0 -44.0 1886.0 800.0
Spectris . . . . . . . . . .1685.0 -82.0 1773.0 1039.0
Aberforth SmaIIer . . .618.5 -11.5 714.0 494.0
AIIiance Trust . . . . . .365.5 -5.5 392.7 310.2
Bankers Inv Trust . . .414.5 -2.0 428.0 346.5
BH GIobaI Ltd. GB .1197.0 2.0 1212.0 1058.0
BH GIobaI Ltd. US . . . .11.9 0.2 12.2 10.4
BH Macro Ltd. EUR . . .19.7 -0.0 20.2 16.3
BH Macro Ltd. GBP 2041.0 1.0 2078.0 1661.0
BH Macro Ltd. USD . . .19.7 0.1 20.2 16.2
BIackRock WorId M .709.0 -17.5 815.5 574.5
BIueCrest AIIBIue . . .164.8 0.5 176.2 160.6
British Assets Tr . . . .126.4 -0.6 139.4 109.0
British Empire Se . . .438.0 -8.9 533.0 404.0
CaIedonia Investm .1525.0 -10.0 1800.0 1337.0
City of London In . . .293.0 -1.3 306.9 257.0
Dexion AbsoIute L . .137.2 -0.9 150.7 130.0
Edinburgh Dragon . .246.5 -3.9 253.0 201.4
Edinburgh Inv Tru . . .486.1 -4.2 496.5 414.9
EIectra Private E . . .1667.0 -20.0 1755.0 1287.0
F&C Inv Trust . . . . . .306.5 -3.5 327.9 261.5
FideIity China Sp . . . . .83.3 -2.3 114.3 70.0
FideIity European . .1090.0 -24.0 1287.0 912.0
HeraId Inv Trust . . . . .507.0 -10.0 545.5 419.0
HICL Infrastructu . . . .118.5 -0.3 121.3 112.7
Impax Environment .101.2 -1.2 125.4 88.5
John Laing Infras . . .109.9 0.2 110.6 103.8
JPMorgan American .920.0 -9.0 940.5 721.5
JPMorgan Asian In . .197.4 -2.1 244.0 170.1
JPMorgan Emerging .558.0 -4.5 610.5 480.1
JPMorgan European .712.5 -17.5 983.5 624.0
JPMorgan Indian I . . .366.2 -6.8 459.0 313.1
JPMorgan Russian .572.5 -16.5 741.0 415.1
Law Debenture Cor . .375.3 -5.7 386.4 321.0
MercantiIe Inv Tr . . . .998.0 -16.0 1119.0 823.0
Merchants Trust . . . .376.8 -4.7 431.8 341.5
Monks Inv Trust . . . .334.0 -4.5 367.9 298.1
Murray Income Tru . .654.0 -3.5 673.0 568.0
Murray Internatio . . .969.0 -15.0 991.5 818.5
PerpetuaI Income . . .266.5 -0.5 276.0 236.5
PersonaI Assets T .35000.0-130.0 35350.030210.0
PoIar Cap TechnoI . .372.2 -8.9 389.2 299.5
RIT CapitaI Partn . . .1204.0 4.0 1360.0 1173.0
Scottish Inv Trus . . . .477.0 -7.0 524.0 417.0
Scottish Mortgage . .672.5 -18.5 781.0 565.0
SVG CapitaI . . . . . . . .271.9 -1.9 281.4 165.1
TempIe Bar Inv Tr . . .926.0 0.0 952.0 791.0
TempIeton Emergin .607.5 -11.5 684.5 497.0
TR Property Inv T . . .150.0 -2.3 206.1 136.2
TR Property Inv T . . . .67.9 -2.2 94.0 59.8
Witan Inv Trust . . . . .487.0 -2.4 533.0 401.5
3i Group . . . . . . . . . . .191.3 -4.6 307.5 166.9
3i Infrastructure . . . .121.6 -0.4 125.2 113.4
Aberdeen Asset Ma .239.8 -5.0 265.8 167.8
Ashmore Group . . . .375.9 -12.1 420.0 301.5
Brewin DoIphin Ho . .161.4 0.4 184.7 113.7
CameIIia . . . . . . . . . .9550.0-187.510950.08800.0
CharIes TayIor Co . . .130.5 -0.5 165.0 115.6
City of London Gr . . . .66.0 0.0 93.6 61.3
City of London In . . .361.6 -11.6 440.0 304.3
CIose Brothers Gr . . .740.5 -9.5 875.0 590.0
CoIIins Stewart H . . . .97.0 -1.0 99.3 48.5
F&C Asset Managem .70.5 -0.3 85.5 56.1
Hargreaves Lansdo .459.1 13.8 646.5 402.5
HeIphire Group . . . . . . .2.2 0.1 17.4 1.4
Henderson Group . . .113.6 -1.4 173.1 95.1
Highway CapitaI . . . . .13.0 0.0 21.0 7.0
ICAP . . . . . . . . . . . . . .380.6 -20.3 541.5 311.6
IG Group HoIdings . .448.0 -3.2 502.5 393.6
Intermediate Capi . . .261.2 -14.3 345.0 197.9
InternationaI Per . . . .240.1 -11.9 388.8 148.5
InternationaI Pub . . . .119.1 0.0 121.5 108.6
Investec . . . . . . . . . . .393.4 -12.8 522.0 318.4
IP Group . . . . . . . . . . .112.0 -2.5 116.0 36.0
Jupiter Fund Mana . .239.6 -10.4 328.7 184.9
Liontrust Asset M . . . .89.9 0.0 91.4 57.9
LMS CapitaI . . . . . . . . .58.6 -0.8 64.8 54.0
London Finance & . . .19.5 0.0 23.5 18.2
London Stock Exch .880.0 -25.0 1076.0 756.5
Lonrho . . . . . . . . . . . . .11.5 0.0 19.8 8.9
Man Group . . . . . . . . .145.8 -2.6 284.4 104.5
Paragon Group Of . .183.2 -5.8 206.1 134.6
Provident Financi . .1106.0 -20.0 1140.0 915.0
Rathbone Brothers .1230.0 -24.0 1290.0 977.0
Record . . . . . . . . . . . . .11.3 0.0 35.5 11.3
RSM Tenon Group . . . .8.8 0.2 45.5 5.6
Schroders . . . . . . . .1524.0 -43.0 1906.0 1183.0
Schroders (Non-Vo .1198.0 -35.0 1554.0 970.0
TuIIett Prebon . . . . . .317.6 -12.3 428.6 262.3
WaIker Crips Grou . . .40.5 0.0 51.5 40.0
BT Group . . . . . . . . . .211.1 -4.8 217.8 161.0
CabIe & WireIess . . . .33.0 -1.2 51.2 31.3
CabIe & WireIess . . . .31.2 -2.3 72.6 14.2
COLT Group SA . . . .101.5 1.8 154.0 84.1
KCOM Group . . . . . . . .69.0 -0.9 84.0 58.5
TaIkTaIk TeIecom . . .139.5 -4.3 150.0 118.9
TeIecomPIus . . . . . . .612.0 -13.5 802.0 440.0
Booker Group . . . . . . .73.0 -2.4 80.0 54.5
Greggs . . . . . . . . . . . .544.0 -1.0 556.0 445.0
Morrison (Wm) Sup .283.3 -3.9 328.0 268.5
Ocado Group . . . . . . .100.2 -3.6 237.0 52.9
Sainsbury (J) . . . . . . .289.0 -5.1 371.0 263.5
Tesco . . . . . . . . . . . . .310.5 -6.3 420.1 310.3
Associated Britis . . .1178.0 -19.0 1228.0 940.0
Cranswick . . . . . . . . .792.0 -1.0 842.5 588.5
Dairy Crest Group . . .321.2 2.9 409.7 311.0
Devro . . . . . . . . . . . . .314.6 -2.1 316.7 232.0
Tate & LyIe . . . . . . . . .693.5 -1.5 720.5 520.0
UniIever . . . . . . . . . .2028.0 -18.0 2189.0 1796.0
Mondi . . . . . . . . . . . . .579.5 -7.0 664.0 413.5
Centrica . . . . . . . . . . .306.1 -4.2 337.6 278.8
InternationaI Pow . . .361.2 -4.9 366.1 279.4
NationaI Grid . . . . . . .649.0 0.0 657.5 543.5
Pennon Group . . . . . .721.5 -3.5 737.5 584.5
Severn Trent . . . . . .1569.0 -15.0 1600.0 1375.0
United UtiIities . . . . .613.5 -7.5 637.0 551.0
Cookson Group . . . . .654.0 -18.0 724.5 395.8
Rexam . . . . . . . . . . . .405.2 -6.8 417.0 299.8
RPC Group . . . . . . . .367.0 -9.1 393.2 231.5
Price Chg High Low
Bovis Homes Group .495.6 -3.2 514.0 326.5
Persimmon . . . . . . . .634.5 -8.5 706.5 374.0
Reckitt Benckiser . .3469.0 -59.0 3597.0 3015.0
Redrow . . . . . . . . . . . .127.0 -2.1 136.4 103.5
TayIor Wimpey . . . . . . .46.4 -1.0 52.7 28.7
Bodycote . . . . . . . . . .385.3 -21.1 420.0 225.6
Fenner . . . . . . . . . . . .455.5 -21.5 481.8 280.0
IMI . . . . . . . . . . . . . . . .933.0 -41.0 1119.0 636.5
MeIrose . . . . . . . . . . .370.1 -15.7 393.4 268.0
Northgate . . . . . . . . . .249.0 -6.7 346.7 190.9
Rotork . . . . . . . . . . .1962.0 -87.0 2099.0 1501.0
Spirax-Sarco Engi . .2006.0 -44.0 2101.0 1649.0
Weir Group . . . . . . .1923.0 -16.0 2236.0 1375.0
Evraz . . . . . . . . . . . . .380.0 -25.2 460.5 315.0
Ferrexpo . . . . . . . . . . .294.9 -7.7 499.0 238.7
TaIvivaara Mining . . .265.1 -8.8 589.0 195.2
BBAAviation . . . . . . .200.4 -3.0 223.4 156.0
Stobart Group Ltd . . .130.6 0.6 152.8 112.0
AdmiraI Group . . . . .1040.0 -4.0 1754.0 787.0
AmIin . . . . . . . . . . . . .334.5 -1.5 427.0 270.6
BeazIey . . . . . . . . . . . .136.1 -3.8 151.8 109.6
Informa . . . . . . . . . . . .418.3 -8.8 446.0 313.9
ITE Group . . . . . . . . . .228.5 0.1 258.2 157.7
ITV . . . . . . . . . . . . . . . . .83.2 -2.7 91.7 51.7
Johnston Press . . . . . . .6.8 -0.8 12.3 4.1
MecomGroup . . . . . .172.3 -5.8 310.0 134.5
Moneysupermarket. .125.7 -2.3 129.5 85.5
Pearson . . . . . . . . . .1190.0 -16.0 1255.0 1038.0
PerformGroup . . . . .270.0 -5.0 282.0 150.0
Reed EIsevier . . . . . .531.0 -7.5 578.0 461.3
Rightmove . . . . . . . .1335.0 -20.0 1446.0 933.0
STV Group . . . . . . . . .102.5 -2.5 168.0 76.3
Tarsus Group . . . . . .137.5 -0.6 165.0 119.5
Trinity Mirror . . . . . . . .43.0 -2.0 61.8 37.5
UBM . . . . . . . . . . . . . .572.5 -15.5 626.0 416.0
UTV Media . . . . . . . . .142.0 3.0 150.0 92.5
WiImington Group . .101.0 -3.5 165.0 78.5
WPP . . . . . . . . . . . . . .799.0 -13.0 828.0 578.0
YeII Group . . . . . . . . . . .4.3 -0.3 11.0 3.4
African Barrick G . . .432.0 -3.4 616.5 393.5
AIIied GoId Minin . . . .115.5 1.9 263.3 34.4
AngIo American . . .2502.0 -67.0 3344.0 2138.5
AngIo Pacific Gro . . .325.2 0.2 344.3 237.9
Antofagasta . . . . . . .1237.0 -55.0 1491.0 900.5
Aquarius PIatinum . .130.9 -6.0 395.0 130.6
BHP BiIIiton . . . . . . .1934.0 -37.0 2631.5 1667.0
CatIin Group Ltd. . . .405.6 -9.9 449.0 334.0
Hiscox Ltd. . . . . . . . . .397.1 -8.6 424.7 340.5
Jardine LIoyd Tho . . .682.5 -4.0 764.5 576.0
Lancashire HoIdin . . .750.0 -8.0 790.5 532.5
RSA Insurance Gro . .108.4 -2.5 139.8 99.6
Aviva . . . . . . . . . . . . . .350.2 -17.2 477.9 275.3
LegaI & GeneraI G . . .117.1 -4.6 123.8 89.8
OId MutuaI . . . . . . . . .156.1 -4.5 162.2 98.1
Phoenix Group HoI . .551.5 -3.5 688.0 451.1
PrudentiaI . . . . . . . . .700.0 -20.0 777.0 509.0
ResoIution Ltd. . . . . .261.6 -5.3 316.1 229.5
St James's PIace . . . .345.9 -11.5 376.0 294.0
Standard Life . . . . . . .230.2 -5.8 244.7 172.0
4Imprint Group . . . . .245.0 -5.0 295.0 200.0
Aegis Group . . . . . . .171.0 -3.4 176.1 115.7
BIoomsbury PubIis . .114.9 -6.1 138.0 91.3
British Sky Broad . . .683.5 0.5 850.0 618.5
Centaur Media . . . . . . .42.5 -0.5 65.3 32.5
Chime Communicati .228.0 -4.3 298.5 163.0
Creston . . . . . . . . . . . .61.5 -0.8 121.0 47.0
DaiIy MaiI and Ge . . .422.6 -7.2 534.5 343.4
Euromoney Institu . .695.0 -10.0 772.0 522.5
Future . . . . . . . . . . . . . .12.3 -0.3 26.5 8.3
Haynes PubIishing . .212.0 0.0 257.0 192.0
Huntsworth . . . . . . . . .46.0 0.3 76.3 32.3
Bumi . . . . . . . . . . . . . .749.5 -0.23 766.0 740.5
Centamin (DI) . . . . . . . .79.2 -7.3 154.2 73.0
Eurasian NaturaI . . .641.5 -33.5 973.5 522.0
FresniIIo . . . . . . . . . .1830.0 -2.0 2150.0 1302.0
GemDiamonds Ltd. .242.0 -8.4 291.0 179.8
GIencore Internat . . .401.3 -2.1 531.1 348.0
HochschiId Mining . .475.6 -9.4 680.0 365.9
Kazakhmys . . . . . . . .924.0 -27.5 1493.0 730.0
Kenmare Resources . .50.7 -4.2 61.5 31.0
Lonmin . . . . . . . . . . .1018.0 -50.0 1851.0 941.0
New WorId Resourc .488.2 -24.8 1060.0 409.4
PetropavIovsk . . . . . .625.5 -33.5 1082.0 543.5
PoIymetaI Interna . . .951.5 -64.5 1175.0 877.0
RandgoId Resource 6860.0-170.0 7565.0 4425.0
Rio Tinto . . . . . . . . .3356.0 -66.0 4595.0 2712.5
Vedanta Resources 1345.0 -55.0 4196.7 1330.0
Xstrata . . . . . . . . . . .1125.5 -12.0 1550.0 764.0
Inmarsat . . . . . . . . . . .433.2 -34.9 628.5 389.3
Vodafone Group . . . .170.0 -1.1 182.7 155.1
Genesis Emerging . .499.0 -11.5 548.5 424.0
Afren . . . . . . . . . . . . . .125.6 -7.9 171.2 73.6
BG Group . . . . . . . . .1470.0 -45.5 1564.5 1144.0
BP . . . . . . . . . . . . . . . .490.1 -14.5 504.6 363.2
Cairn Energy . . . . . . .321.0 -11.0 531.8 291.9
EnQuest . . . . . . . . . . .119.1 -6.1 158.5 85.7
Essar Energy . . . . . .101.6 -5.5 515.0 99.8
ExiIIon Energy . . . . . .201.4 -20.8 469.7 184.2
Heritage OiI . . . . . . . .158.0 -8.9 332.2 152.3
Ophir Energy . . . . . . .407.0 -20.1 434.0 184.5
Premier OiI . . . . . . . . .409.7 -17.4 520.5 310.0
RoyaI Dutch SheII . .2251.0 -23.5 2402.0 1883.5
RoyaI Dutch SheII . .2278.5 -28.0 2489.0 1890.5
SaIamander Energy .233.4 -11.4 317.6 182.3
Soco Internationa . . .315.5 -9.9 400.0 278.0
TuIIow OiI . . . . . . . . .1413.0 -44.0 1601.0 945.5
Amec . . . . . . . . . . . .1079.0 -30.0 1207.0 740.5
Hunting . . . . . . . . . . .788.0 -24.5 845.5 530.0
Kentz Corporation . .456.7 -10.9 508.0 347.0
LampreII . . . . . . . . . . .325.9 -3.1 395.2 220.7
Petrofac Ltd. . . . . . .1545.0 -50.0 1609.0 1108.0
Wood Group (John) .705.5 -58.0 763.5 469.9
Burberry Group . . . .1393.0 -43.0 1600.0 1092.0
PZ Cussons . . . . . . . .300.1 -4.3 387.9 285.0
Supergroup . . . . . . . .516.0 1.0 1600.0 435.2
AstraZeneca . . . . . .2806.0 -35.0 3194.0 2543.5
BTG . . . . . . . . . . . . . .346.6 -6.0 361.8 210.3
Genus . . . . . . . . . . . .1312.0 -11.0 1368.0 853.5
GIaxoSmithKIine . . .1400.0 -4.0 1497.0 1138.5
Hikma Pharmaceuti .723.0 -27.0 869.0 555.5
Shire PIc . . . . . . . . . .2167.0 -50.0 2300.0 1748.0
CapitaI & Countie . . .189.7 -2.3 203.7 153.4
Daejan HoIdings . . .2960.0 19.0 3039.0 2282.0
F&C CommerciaI Pr .102.0 -0.1 108.0 92.6
Grainger . . . . . . . . . . .105.3 -1.7 133.2 77.3
London & Stamford .111.7 -2.5 140.0 103.9
SaviIIs . . . . . . . . . . . . .365.4 -2.1 427.1 256.2
UK CommerciaI Pro . .73.1 -0.2 85.5 65.1
Unite Group . . . . . . . .195.9 -2.8 224.1 152.9
Big YeIIow Group . . .293.0 -3.2 344.4 218.0
British Land Co . . . . .466.1 -8.7 629.5 444.0
CapitaI Shopping . . .327.4 -8.7 408.6 288.7
Derwent London . . .1684.0 -44.0 1880.0 1400.0
Great PortIand Es . . .350.0 -10.0 445.0 312.9
Hammerson . . . . . . . .388.2 -13.2 490.9 345.2
Hansteen HoIdings . . .74.5 -0.5 89.5 68.0
Land Securities G . . .677.0 -14.5 885.0 612.0
SEGRO . . . . . . . . . . . .233.7 -7.8 331.3 195.0
Shaftesbury . . . . . . . .484.0 -13.0 539.0 441.2
Aveva Group . . . . . .1666.0 -43.0 1799.0 1298.0
Computacenter . . . . .390.1 -7.9 490.0 324.7
Fidessa Group . . . . .1597.0 -33.0 2109.0 1444.0
Invensys . . . . . . . . . . .197.0 -4.9 357.3 180.9
Logica . . . . . . . . . . . . .87.5 -1.7 144.8 59.0
Micro Focus Inter . . .442.8 -9.0 458.4 242.9
Misys . . . . . . . . . . . . .338.5 3.5 420.2 214.9
Sage Group . . . . . . . .297.4 -9.6 312.4 231.7
SDL . . . . . . . . . . . . . . .722.0 -18.0 756.0 586.0
TeIecity Group . . . . . .688.0 -18.0 709.5 450.5
Aggreko . . . . . . . . . .2125.0 -64.0 2250.0 1395.5
Ashtead Group . . . . .247.5 -9.5 273.0 99.4
Atkins (WS) . . . . . . . .755.5 -20.5 820.0 490.2
Babcock Internati . . .734.5 -20.0 758.0 550.5
Berendsen . . . . . . . . .517.0 -4.5 568.0 402.7
BunzI . . . . . . . . . . . . .946.0 -14.5 973.0 676.5
Cape . . . . . . . . . . . . . .445.3 15.9 591.5 295.0
Capita . . . . . . . . . . . . .735.0 -22.0 785.0 611.5
CariIIion . . . . . . . . . . .304.5 -6.5 403.2 281.0
De La Rue . . . . . . . . .933.5 -15.0 1001.0 730.0
DipIoma . . . . . . . . . . .390.9 0.9 425.5 263.5
EIectrocomponents .234.7 -9.7 294.9 182.2
Experian . . . . . . . . . . .910.5 -20.5 960.0 665.0
FiItrona PLC . . . . . . . .443.0 -6.2 451.9 293.0
G4S . . . . . . . . . . . . . . .281.5 -4.9 291.3 219.9
Hays . . . . . . . . . . . . . . .79.8 -3.8 129.4 58.9
Homeserve . . . . . . . .214.7 -4.3 532.0 214.1
Howden Joinery Gr . .120.0 -4.4 125.5 93.1
Interserve . . . . . . . . . .293.4 -10.6 341.3 245.0
Intertek Group . . . . .2262.0-110.0 2372.0 1744.0
MichaeI Page Inte . . .443.0 -36.0 567.0 323.0
Mitie Group . . . . . . . .261.1 -4.7 271.0 195.9
PayPoint . . . . . . . . . . .574.5 -0.5 593.0 395.0
Premier FarneII . . . . .206.8 -8.7 308.8 144.5
Regus . . . . . . . . . . . . .103.0 -3.7 119.0 64.0
RentokiI InitiaI . . . . . . .73.4 -1.8 100.9 58.2
RPS Group . . . . . . . . .221.3 -4.0 253.0 156.6
Serco Group . . . . . . .519.0 -8.0 599.5 458.0
Shanks Group . . . . . .103.5 -2.9 130.9 90.8
SIG . . . . . . . . . . . . . . .110.4 -4.2 153.5 77.0
Travis Perkins . . . . .1036.0 -18.0 1090.0 715.0
WoIseIey . . . . . . . . .2301.0-121.0 2500.0 1404.0
ARM HoIdings . . . . . .535.5 -8.0 645.0 464.0
CSR . . . . . . . . . . . . . .232.3 -4.3 391.4 154.1
Imagination Techn . .579.5 -30.0 630.5 296.9
Spirent Communica .151.4 1.4 156.0 105.8
British American . .3191.5 -13.5 3223.0 2300.0
ImperiaI Tobacco . .2506.0 -28.0 2534.0 1878.0
Betfair Group . . . . . . .881.0 -4.0 1030.0 567.0
Bwin.party Digita . . .155.1 -4.9 204.0 100.6
CarnivaI . . . . . . . . . .1844.0 -25.0 2672.0 1742.0
Compass Group . . . .632.5 -7.5 641.0 512.5
Domino's Pizza UK . .432.2 -8.7 526.0 377.0
easyJet . . . . . . . . . . . .431.7 -9.7 478.4 302.5
FirstGroup . . . . . . . . .282.5 -6.6 371.3 281.7
Go-Ahead Group . . .1281.0 -14.0 1598.0 1190.0
Greene King . . . . . . .494.6 -7.4 521.5 410.0
InterContinentaI . . .1383.0 -58.0 1450.0 955.0
InternationaI Con . . .160.7 -4.4 258.7 132.0
JD Wetherspoon . . . .400.0 -5.0 468.3 380.5
Ladbrokes . . . . . . . . .149.2 -2.5 155.3 114.0
Marston's . . . . . . . . . . .94.3 -1.8 112.0 84.6
MiIIennium& Copt . .477.8 -14.2 558.0 371.2
MitcheIIs & ButIe . . . .253.3 -9.3 336.8 215.6
NationaI Express . . .235.2 -4.8 270.2 201.6
Rank Group . . . . . . . .130.7 -4.7 153.7 109.5
Restaurant Group . . .279.7 -8.3 335.0 254.9
Spirit Pub Compan . . .55.5 -4.5 61.0 35.3
Stagecoach Group . .264.9 -2.9 287.4 200.0
TUI TraveI . . . . . . . . . .193.2 -4.8 250.0 136.7
Whitbread . . . . . . . .1637.0 -28.0 1737.0 1409.0
WiIIiamHiII . . . . . . . . .222.4 -2.9 244.1 176.8
Abcam . . . . . . . . . . . .358.5 -2.5 460.0 320.0
Advanced MedicaI . . .91.0 -3.0 96.0 64.8
AIbemarIe & Bond . .350.0 2.0 400.1 281.0
Amerisur Resource . .23.5 -3.3 29.0 9.5
Andor TechnoIogy . .537.5 -11.0 685.0 387.1
ArchipeIago Resou . . .65.8 1.3 79.0 55.5
ASOS . . . . . . . . . . . .1679.0 -21.0 2468.0 1142.0
AureIian OiI & Ga . . . .18.0 -1.8 92.0 16.0
Avanti Communicat .257.3 -2.8 523.0 248.5
BIinkx . . . . . . . . . . . . . .74.0 -7.0 158.0 50.5
Borders & Souther . . .69.0 -4.5 80.5 43.5
BowLeven . . . . . . . . . .87.8 -4.5 382.3 62.0
Brooks MacdonaId 1317.5 2.5 1372.5 940.0
CIuff GoId . . . . . . . . . . .94.5 -2.8 119.0 66.5
Cove Energy . . . . . . .206.0 -3.0 242.0 61.0
Daisy Group . . . . . . .108.3 -0.3 127.0 88.0
EMIS Group . . . . . . . .414.8 -2.8 580.0 397.5
Faroe PetroIeum . . . .164.8 -6.3 185.0 130.0
GuIfsands PetroIe . . .159.5 -10.8 336.0 142.5
GWPharmaceuticaI . .93.5 1.5 130.0 78.5
H&T Group . . . . . . . . .331.8 -2.5 395.0 285.0
Hargreaves Servic .1235.0 -20.0 1258.0 855.0
HeaIthcare Locums . . . .2.7 0.1 2.8 2.7
Immunodiagnostic . .326.3 2.3 1218.0 288.8
ImpeIIamGroup . . . .335.0 -10.0 387.5 225.0
Iomart Group . . . . . . .140.0 -2.0 151.0 85.5
James HaIstead . . . . .505.0 5.8 520.0 410.0
London Mining . . . . .297.8 -6.3 436.5 257.5
Lupus CapitaI . . . . . .124.0 -3.0 150.0 86.0
M. P. Evans Group . .457.5 -1.5 475.0 371.0
Majestic Wine . . . . . .419.0 -8.5 510.0 315.0
May Gurney Integr . .283.0 -5.5 302.0 234.0
Monitise . . . . . . . . . . . .36.3 -2.5 40.0 20.5
MuIberry Group . . . .1868.0 -32.0 1951.0 1215.0
Nanoco Group . . . . . . .69.3 -6.8 93.3 38.0
NauticaI PetroIeu . . .331.3 -29.8 444.3 223.5
NichoIs . . . . . . . . . . . .617.0 -18.0 642.0 410.0
Numis Corporation . . .94.0 0.5 119.6 72.0
Pan African Resou . . .16.5 -0.8 18.3 9.5
Patagonia GoId . . . . . .36.0 -0.3 70.0 34.5
Prezzo . . . . . . . . . . . . .67.4 -0.6 71.5 53.5
Pursuit Dynamics . . . .79.0 -5.0 392.0 67.0
Rockhopper ExpIor .345.0 -38.8 393.5 141.0
RWS HoIdings . . . . . .515.0 5.0 530.0 367.5
Secure Trust Bank .1062.5 2.5 1062.5 755.0
Songbird Estates . . .110.0 -4.0 160.3 103.0
VaIiant PetroIeum . . .496.5 -10.5 636.0 400.0
Young & Co's Brew . .667.5 0.0 712.0 565.0
Cape . . . . . . . . . . . . . .445.3 3.7
Hargreaves Lansdow 459.1 3.1
Laird . . . . . . . . . . . . . .184.6 2.7
COLT Group SA . . . .101.5 1.8
AIIied GoId Mining . .115.5 1.7
BH GIobaI Ltd. USD . .11.9 1.3
Misys . . . . . . . . . . . . .338.5 1.0
Spirent Communicat .151.4 0.9
Dairy Crest Group . . .321.2 0.9
Daejan HoIdings . . .2960.0 0.7
ExiIIon Energy . . . . . .201.4 -9.4
Centamin (DI) . . . . . . .79.2 -8.4
Kenmare Resources . .50.7 -7.7
Wood Group (John) .705.5 -7.6
MichaeI Page Inter . .443.0 -7.5
Spirit Pub Company . .55.5 -7.5
Inmarsat . . . . . . . . . . .433.2 -7.5
CabIe & WireIess W . .31.2 -6.7
PoIymetaI Internat . . .951.5 -6.4
Evraz . . . . . . . . . . . . .380.0 -6.2
Risers FaIIers
MAIN CHANGES UK 350
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
Price Chg High Low Price Chg High Low
GILTS
AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
ELECTRICITY
ELECTRONIC & ELECTRICAL EQ.
EQUITY INVESTMENT INSTRUM.
FINANCIAL SERVICES
FIXED LINE TELECOMS
FOOD & DRUG RETAILERS
FOOD PRODUCERS
FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
HEALTH CARE EQUIPMENT & S.
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INDUSTRIAL ENGINEERING
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MEDIA
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PERSONAL GOODS
PHARMACEUTICALS & BIOTECH
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AUTOMOBILES & PARTS
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MINING
NONEQUITY INVESTM. COMM.
Tsy 5.250 12 . . . .101.23 -0.01 105.3 101.2
Tsy 9.000 12 . . . .103.54 1.55 111.1 102.4
Tsy 5.000 12 . . . .100.00 0.07 104.1 100.0
Tsy 4.500 13 . . . .104.06 0.00 106.5 104.0
Tsy 2.500 13 . . . .283.29 0.01 287.7 281.6
Tsy 8.000 13 . . . . .111.72 -0.01 116.9 111.7
Tsy 5.000 14 . . . . .111.36 -0.01 112.9 109.3
Tsy 7.750 15 . . . .100.00 0.00 105.9 99.4
Tsy 4.750 15 . . . . .114.35 0.00 115.4 109.1
Tsy 8.000 15 . . . .127.28 -0.01 129.2 123.8
Tsy 4.000 16 . . . . .113.81 -0.02 114.7 105.6
Tsy 2.500 16 . . . .343.78 0.01 344.2 317.1
Tsy 12.000 17 . . .120.17 0.00 128.6 119.1
Tsy 8.750 17 . . . . .141.11 -0.27 141.9 133.3
Tsy 1.250 17 . . . . .115.71 0.06 116.6 108.4
Tsy 5.000 18 . . . .121.80 0.08 122.5 110.6
Tsy 4.500 19 . . . .120.16 0.18 120.7 106.5
Tsy 3.750 19 . . . . .115.00 0.20 115.6 100.7
Tsy 2.500 20 . . . .365.07 0.17 367.1 320.4
Tsy 4.750 20 . . . .122.48 0.27 123.5 107.7
Tsy 8.000 21 . . . .151.41 0.30 153.4 134.8
Tsy 1.875 22 . . . .126.68 0.26 129.1 113.3
Tsy 4.000 22 . . . . .116.78 0.36 118.2 100.0
Tsy 2.500 24 . . . .328.14 0.21 334.7 281.2
Tsy 5.000 25 . . . .128.26 0.38 130.6 108.5
Tsy 1.250 27 . . . .122.31 0.25 127.0 106.6
Tsy 4.250 27 . . . . .119.29 0.43 122.7 99.1
Tsy 6.000 28 . . . .143.95 0.40 148.0 120.7
Tsy 4.125 30 . . . . .311.48 0.19 322.8 268.2
Tsy 4.750 30 . . . .126.12 0.41 130.5 104.3
Tsy 4.250 32 . . . . .118.64 0.44 123.1 97.5
Tsy 4.250 36 . . . . .118.94 0.47 123.9 96.8
Tsy 4.750 38 . . . .128.74 0.48 134.2 105.0
Tsy 4.500 42 . . . .125.29 0.55 130.8 101.3
% %
THE ULTIMATE EXPERIENCE
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Experience corporate entertainment at its
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CITYA.M. 7 MARCH 2012 23
Wealth Management | Markets
HYUNDAI I20
Hyundai's latest very frugal i20 has just debuted at Geneva. The facelift-
ed i20 will be sold with an enhanced engine line-up which includes a 1.1-
litre, three-cylinder diesel engine which emits just 84g/km of CO2 when
equipped with Hyundai's Blue Drive eco technology lower than any
other conventionally-powered car.
CAR TALK BY RYAN BORROFF
VWS CROSS COUPE HYBRID
An SUV capable of 157mpg may sound fantastic but Volkswagens
Cross Coup which has just debuted at Geneva has a super frugal
plug-in hybrid drivetrain capable of exactly that. The crossover SUV
has a turbodiesel TDI engine combined with two electric motors; CO2
emissions are just 46g/km while top speed is 137mph.
LAMBORGHINI AVENTADOR J
Lamborghini has just revealed the monstrously powerful 700hp
Aventador J convertible at the 2012 Geneva Motor Show. The one-off
two-seater has no windscreen and no roof to reduce weight, so the
driver and passenger have to gear up like race drivers before heading
off. The car is so low the rear view mirror works like a periscope.
How the Fiat Panda became cool
I
N 1980, the original Fiat Panda was
designed by Giorgetto Giugiaro to
be a small, cheap and cheerful, no
frills utility vehicle. Clever innova-
tions included a hammock-like rear seat
that could be folded flat to make a bed
or removed completely to generate van-
like load space.
Fiat has sold 6.5 million Pandas since
then and its hoping a similar mix of
cheery functionality and fun will see
this third generation Panda maintain its
position as Europes best-selling super-
mini. In a market driven by older buyers,
the biggest single group of Panda drivers
are people who might be politely called
grey. Fiats smaller, cooler and more
expensive 500 on the other hand is most-
ly driven by people in their late thirties
and up. Fiat is hoping it can retain the
interest of people aged 50+ and entice
younger owners to move out of their
500s and into a Panda when they spawn.
Curvier than before, the new Panda is
still tall and has the same eager, sunny
disposition of the old one. Now it looks
like all of its corners and windows have
had the edges sanded off. It looks a little
bigger, more youthful, cuter even.
Whether it will acquire a similar cool
image to the 500 remains to be seen.
Fiat has improved the interior signifi-
cantly. Most noticeable is the dashboard
design. Here Fiat has taken the rounded-
off theme to the max. The dash incorpo-
rates a roomy storage shelf above the
glovebox in one big, continuous squir-
cle, then the instruments, air-con and
audio dials, even the leather steering
wheel look a little bit square. The dash is
made of hard plastic but in our test car
all of the touch points are in soft leather,
and the overall impression is that this is
a good quality, modern
interior.
Inside its surprisingly quiet there is
some tyre and wind noise but not much
engine noise even in the throaty TwinAir
version, unless your foot is to the floor.
Fiat has done a lot of work on the sus-
pension and body to create a stronger,
stiffer and lighter car that should be
more comfortable and handle better. I
find the ride is firm though the Panda
does soak up most bumps well.
This version is
generally bigger
and better than its
predecessors
THE VERDICT:
DESIGN hhhhi
PERFORMANCE hhhhi
PRACTICALITY hhhii
VALUE FOR MONEY hhhhi
THE FACTS:
FIAT PANDA TWINAIR TURBO
PRICE: 10,750
0-62MPH: 11.2sec
TOP SPEED: 110mph
CO2 G/KM: 99g/km
MPG COMBINED: 67.3mpg
Unfortunately, I find the seat base so
unyielding that I feel like I am balanced
upon it rather than in it which is a lit-
tle disconcerting. Over some of the big-
ger bumps on our test route around
Edinburgh I feel like Im bouncing
around all over the place.
The car feels bigger than it is. The driv-
ing position is high and the view out
very good. Rear legroom, though, is
tight. With an average-height driver
ahead of you youll be needing to take
the optional rear sliding seat bench to be
comfortable. This will of course eat into
your 250 litres of boot space.
The new Panda will be sold with three
engine options initially, the two-cylinder
875cc, 85hp TwinAir Turbo petrol, the
four-cylinder 69hp 1.2-litre petrol and
the 1.3-litre MultiJet2 turbo diesel. I drive
all three. The diesel may be the most ver-
satile but unless you require such exten-
sive fuel economy Fiat claims 72.4mpg
is possible I can think of no reason to
buy it. The 1.2-litre petrol is less tiring to
drive than the the TwinAir engine but
that Fiat claims it will return.
Driving the TwinAir Panda is simple,
good, honest fun. Its three-door 500 sib-
ling may be more fashionable but make
no mistake, the new Fiat Panda is now
more hip than it has ever been. Its less
square and a more complete drive all
round.
not nearly half as much fun. The two-
cylinder engine seems to suit the eager
disposition of the Panda and the effect of
its husky engine noise is to provide a
much more entertaining drive, though
youd have to be gentle with the right
pedal if you want to get anywhere close
to the (combined cycle) 67.3mpg figures
The slighty bigger
Panda feels larger
than it is.
Lifestyle | Motoring
24
WORDS BY
RYAN BORROFF
CITYA.M. 7 MARCH 2012
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GRANNYS MOVING IN: A
WONDERLAND FILMBBC2, 9PM
Following Phil and Sue Caroll as they
take in her mother Peggy, whose
determination to enjoy life to the full
causes no end of stress and worry.
GOK WAN: MADE IN CHINA
CHANNEL4, 8PM
The stylist travels to China, where he
finds out how the country is able to
produce goods in the vast quantities
the UK has come to rely on.
BIG BODY SQUAD
CHANNEL5, 8PM
A specialised unit helps a 20st
80-year-old travel to hospital, and a
48st woman needs to be visited at
home by the dentist.
BBC1
SKY SPORTS 1
7pmLive UEFA Champions League
10.15pmYoure on Sky Sports!
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Olympic Magazine
11.15pm-12.35amCycling
ESPN
7pmLive FA Cup Football 10pm
MLS: David Beckhams LA Story...
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7pmCriminal Minds 8pmThe
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Medium3.30amBones 4.20am
Nothing to Declare 5.10am-6am
Jerry Springer
BBC THREE
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Dont Tell the Bride 9pmSun, Sex
and Suspicious Parents 10pmFree
Speech 11pmFamily Guy 11.45pm
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and Suspicious Parents 1.30am
Pramface 2amWhite Van Man
2.30amDont Tell the Bride
3.25amRiots and Revolutions: My
Arab Journey 4.25am-5.25am
Junior Doctors: Your Life in Their
Hands
E4
7pmHollyoaks 7.30pmHow I Met
Your Mother 8pmFILMNight at
the Museum2006. 10.10pmFILM
Independence Day 1996. 1amThe
Big Bang Theory 1.50amHow I
Met Your Mother 2.20amBalls of
Steel Australia 2.50amRules of
Engagement 3.10amScrubs
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5.20am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
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Chopper: Senior Versus Junior
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Wheeler Dealers 3.50am
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Destroyed in Seconds
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HEALTH
7pmSupernanny US 8pm21st
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10pmEmbarrassing Bodies 11pm
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ER 3amSupernanny US 4amA
Baby Story 5am-6amBaby Tales
SKY1
7pmThe Simpsons 8pmObese: A
Year to Save My Life USA:
American version of the weight-
loss show. 9pmBrit Cops: War on
Crime: Following police officers in
Lincolnshire. 10pmFringe 11pm
Mad Dogs 12amDog the Bounty
Hunter 1amThorne: Scaredy Cat
1.55amUK Border Force 3.40am
Road Wars 4.35amCustoms UK
5.05am-6amDream Lives for Sale
BBC2 ITV1 CHANNEL4 CHANNEL5
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&
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TVPICK
6pmBBC News 6.30pmBBC
London News 6.55pmParty
Political Broadcast 7pmThe One
Show7.30pmThe Food Inspectors:
BBC News 8pmWaterloo Road
9pmMasterChef 10pmBBC News
10.25pmRegional News 10.35pm
The National Lottery Wednesday
Night Draws 10.45pmKevin
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Film 2012 with Claudia Winkleman:
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The Celebrity Apprentice USA
1.20amWeatherview1.25amSign
Zone: See Hear 1.55amSign Zone:
Upstairs Downstairs 2.55amSign
Zone: How to Grow a Planet
3.55amSign Zone: An Island Parish
4.25am-6amBBC News
6pmEggheads
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7pmEscape to the Country:
Properties in Dorset.
7.30pmWatson & Oliver
8pmThe Fishermans
Apprentice with Monty Halls
9pmCHOICE Grannys Moving
In: A Wonderland Film
10pmRoger & Val Have Just
Got In
10.30pmNewsnight: Weather
11.20pmStoryville Extreme
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Surgeon
12.50amBBC News
4am-6amBBC Learning Zone
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Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
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KAKURO
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LAST ISSUES
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KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
1 Gush (5)
4 Division between signs
of the zodiac (4)
6 Circle of light around
the sun (4)
7 Becomes older (4)
8 Completely happy
and contented (8)
12 Alleviate (4)
14 Ticks over (5)
15 Dissenting clique (4)
16 Placed very near
together (5-3)
20 Roman cloak (4)
21 Portico or roofed
colonnade (4)
22 Contest of speed (4)
23 Pasta in short tubes with
diagonally cut ends (5)
DOWN
1 Wash with a mop (4)
2 Fruit, a cross between
a tangerine and a
grapefruit (4)
3 As a result (4)
4 Fuse or cause to
grow together (8)
5 Ski run densely packed
with snow (5)
9 Part of the ear (4)
10 Portable travelling
bag for carrying
clothes (8)
11 Numbered page (5)
13 Align oneself with (4)
15 Forest god (5)
17 Cleansing agent (4)
18 Examine hastily (4)
19 Remove (4)
L
O
I
C
N M
A
T
P

4

4

4
4

P A N T S T S O B
U T H O S E I
N Y A L A M C L
D L K B O R N E
I L L N E S S E
T O E T D
W D E S P I S E
B R A C E L V N
A N B E R E C T
L C A U S E A
D I E G K N O L L
6 8 9 5 9 7 8 6
4 6 7 9 3 8 5 2 1
1 2 2 1 7 9 8
2 7 7 4
5 1 2 6 7 5
8 9 6 3 3 5 2 1
1 4 1 9 9 4
8 4 6 8
8 1 2 3 1 9 7
5 2 4 1 7 3 6 8 9
9 8 7 4 6 1 3 5
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter words were
BRAINSTEM and TRIBESMAN
25 CITYA.M. 7 MARCH 2012
Lifestyle | TV&Games
Sport
26
FORMER England captain and World
Cup winner Lewis Moody has admit-
ted his great sadness after accepting
defeat in his battle with injury and
retiring from the game.
The 33-year-old, who called time on
his 71-cap international career in
October, had been striving to recover
from a December shoulder operation.
British and Irish Lion Moody won
seven Premiership titles and two
Heineken Cups in a 14-year spell at
Leicester before joining Bath in 2010.
It is with great sadness that I have
to announce my immediate retire-
ment from all forms of rugby, the
famously fearless flanker, nicknamed
Mad Dog, said in a statement.
I have been very privileged to have
played in some incredible teams and
with some phenomenal players. I owe
a huge debt of gratitude to all the
medics and physios who have put me
back together time and time again to
enable me to continue to play this
wonderful sport of ours.
Moody played a key role in
Englands finest hour, gathering the
line-out that allowed fly-half Jonny
Wilkinson to kick the winning drop-
goal in the 2003 World Cup final.
Eight years later he led his country
at the same tournament, this time in
New Zealand, but the ending was
sourer, with England eliminated in
the quarter-finals and the squads
image tainted by indiscipline.
In between Moody suffered a litany
of injuries in the line of duty, to his
Achilles, ankle, hip, foot, knee liga-
ment, eye socket and shoulder.
Moody sad
as injuries
end career
BY FRANK DALLERES
RUGBY UNION

Moody won all of the major honours in a

glittering 14-year career Picture: GETTY
FORMER England and Chelsea man-
ager Glenn Hoddle is desperate to seal
a dramatic return to Stamford Bridge
as Andre Villas-Boass successor and
has urged the club to break with tra-
dition and employ an Englishman.
Villas-Boas became the sixth mana-
gerial casualty of the Roman
Abramovich era after he was sacked
on Sunday following a run of results
which has seen Chelsea slip out of the
top four in the Premier League.
Hoddle enjoyed a successful
three-year spell as Chelsea
manager in the mid-1990s,
transforming the image
of the club by attracting
the likes of Ruud Gullit
to west London, and he
believes the time is right
to end six years in the
managerial wilderness.
At this moment in time a
return to management is
something Im keen on, Hoddle, who
parted company with Wolves in 2006,
told City A.M. If I was asked by
Chelsea Id obviously say yes. I loved
my time there and only went because
of the England job.
I would throw my hat into the
ring without any shadow of a doubt.
After what I achieved there first time
around I think it would go down rea-
sonably well with the supporters.
All six of Abramovichs managerial
appointments since he assumed con-
trol of the club in 2003 have been for-
eigners and Hoddle believes it is time
Chelsea abandoned that policy and
hired an English coach for the first
time since he left in 1996.
Chelsea havent tried going down
the English route since I was there. It
would be interesting for somebody to
go in there knowing the culture and
knowing the way players think in this
country, he said.
Maybe an Englishman could
repair that link to the fans which
might have been dismantled a bit.
Getting that spirit in the club right is
a key to success. I think they will go
foreign again but they shouldnt dis-
miss the idea of appointing an
Englishman.
Roberto di Matteo has
been installed as caretaker
boss until the end of the
season he took charge of
his first game in last
nights 2-0 win at
Birmingham and Hoddle
believes, contrary to popular
opinion, the Italian is in pole
position to land the job permanently.
He said: Its similar to when Avram
Grant came in. He was one penalty
away from winning the Champions
League and would probably still be
here today if hed have won it.
Di Matteo has nothing to lose and
if he can get in that top four and get
to the latter stages of the Champions
League hes in with a great shout.
Glenn Hoddle was speaking in his role as
20-20 Footballs technical director ahead of
the Elite Legends Cup tournament at Loftus
Road on 20 May.
Hoddle keen
on making a
sensational
Blues return
BY JAMES GOLDMAN
FOOTBALL

Former Chelsea boss ready to end six-year managerial

exile and says club should appoint an Englishman
TRAINER Nicky Henderson has dis-
missed suggestions that defending
champion Long Run has joined rival
Kauto Star as a major doubt for next
weeks Cheltenham Gold Cup.
It had been claimed that the seven-
year-old was coughing, but
Henderson insisted his charge is fine
and working away as normal.
The horse is going out to work
now. Nothing has happened,
Henderson said. I heard last night
that he was drifting. Unless some-
ones been in there in the middle of
the night and hit him with a hammer
then I dont know why.
It is most annoying because its
the last thing you need. All that wor-
ries you. Nothing has happened.
Meanwhile, two-time Gold Cup
winner Kauto Star will have a race-
course gallop after Fridays meeting
at Wincanton.
The 12-year-old, who romped to his
fifth King George VI Chase win at
Kempton in December, suffered a fall
while schooling last week which left
him with a 50-50 chance of making it
to Cheltenham, according to his
trainer Paul Nicholls.
WALES prop Gethin Jenkins has been
handed another chance to break his
captaincy curse after skipper Sam
Warburton was ruled out of
Saturdays Six Nations clash with Italy.
Jenkins has failed to avoid defeat
on the three previous occasions he
has worn his countrys armband, but
will be confident of ending that run
when the bottom-of-the-table Italians
visit the Millennium Stadium.
Warburton, who returned from
injury in the Triple Crown clinching
victory over England two weeks ago,
misses out with a knee ligament
injury as leaders Wales look to take
another step towards the Grand Slam.
Flanker Justin Tipuric replaces the
World Cup skipper in the back row,
centre Jamie Roberts starts despite
knee concerns, former captain
Matthew Rees returns at hooker and
fit-again lock Luke Charteris is on the
bench.
Jenkins admits his unenviable cap-
taincy record is playing on his mind,
saying: That was the first thing I
thought of when Gats [Wales coach
Warren Gatland] asked me: to break
that duck.
Jenkins aiming for fourth
time lucky against Italy
RUGBY UNION

HORSE RACING

Long Run fitness doubts

quashed by Henderson
Sarries pair spar
over fly-half spot
ENGLAND head coach Stuart
Lancaster faces a fly-half dilemma
over Saracens team-mates Owen
Farrell and Charlie Hodgson after
Leicester's Toby Flood was ruled out of
Sunday's Six Nations match in France.
Flood was last night released from the
squad for his club's LV= Cup semi-final
against Bath on Saturday. That leaves
Lancaster mulling whether to reinstate
fit-again old hand Hodgson, who
played in the wins over Scotland and
Italy, or stick with tyro Farrell.
Mata scored the
opener and had
a penalty saved
Picture: GETTY
27
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Gunners run out
of ammunition to
finish off Milan
PROUD manager Arsene Wenger
hailed Arsenals indefatigable
spirit after they came within a
whisker of the biggest comeback
in Champions League history --
but warned them not to let the
near miss affect their top four
quest.
First-half goals from defender
Laurent Koscielny, midfielder
Tomas Rosicky and captain Robin
van Persie swept the Gunners to
within touching distance of over-
turning a seemingly insurmount-
able four-goal deficit from the last
16 first leg.
Only a point-blank save from
Christian Abbiati denied Van
Persie a tie-levelling fourth after
the break but Arsenal faded as
their early chasing caught up
with them, leaving Wenger to
reflect on elimination and a bit-
tersweet evening.
We are disappointed because
we touched qualification. We had
the chances and we didnt do it,
but we were very close, he said.
The players put in a focused
performance, fantastic spirit, and
you can only congratulate the
whole team. Its a night when the
players can be proud to play for
this club.
Crashing out of Europe threat-
ens to dent Arsenals resurgence
as they enter the defining stage of
the season, and Wenger urged his
charges not to falter in their bid
to finish in the top four and reach
next seasons Champions League.
It will be difficult because its
a big disappointment for the play-
ers, he added. But I think the
team has grown together and
hopefully from there we can fin-
ish the season in a strong way.
Theres no room for disappoint-
ment in the league.
Arsenal needed an early goal to
foster belief and Koscienly provid-
ed it in the 7th minute, escaping
Mark van Bommel to meet Alex
Oxlade-Chamberlains corner
with a firm downward header.
Rosicky poured more fuel on
the fire in the 26th minute when
he slotted Thiago Silvas fluffed
clearance past Abbiati, and when
Van Persie slammed in a penalty
just before half-time, Emirates
Stadium was ablaze with incredu-
lous excitement.
Just one more goal was needed
to take the Italian league leaders
and seven-time European kings to
extra-time and, despite Van Persie
enjoying a chance four yards out,
Abbiati, and Milan, thwarted the
fairytale.
Heroic comeback falls short and Wenger hopes
league form wont be affected by near miss
CITY A.M. VERDICT
It was almost the greatest comeback
in Champions League history, but in
the end Arsenals tired legs caught up
with them. All the same, they will take
huge encouragement from this display.
KEY MOMENT
Robin van Persie thumped in the third
just before half-time, but it was all
down to Alex Oxlade-Chamberlains
magic, the teenager terrifying Milan
into conceding a penalty.
MAN OF THE MATCH
Finally, after six years at Arsenal,
Tomas Rosicky is showing why he
earned rave reviews at Borussia
Dortmund. Drove his team on relent-
lessly in the manner of Cesc Fabregas.
TALKING POINT
Theyre out of Europe, but the spirit
shown by Arsenal here, at Liverpool
and against Tottenham bodes well for
what is sure to be a tooth-and-nail
scrap for a top four spot .
MATCH ANALYSIS BY FRANK DALLERES
BY FRANK DALLERES AT THE EMIRATES
FOOTBALL

ARSENAL
AC MILAN
Milan win 4-3 on aggregate
3
0
CHELSEA caretaker manager Roberto
di Matteo dedicated last nights FA
Cup fifth round replay victory over
Birmingham to the man he replaced,
Andre Villas-Boas.
Two of the now departed
Portugueses summer signings, Juan
Mata and Raul Meireles, scored the
second half goals which guaranteed
his former club a home tie in the quar-
ter finals against Leicester.
Villas-Boas was sacked on Sunday
following a run of just one win in six
games in all competitions and after
getting his tenure off to the perfect
start, Di Matteo made a point of
remembering his old boss amid the
celebrations.
My thoughts tonight go to Andre,
he said. I think the attitude was
right, the commitment, the passion
was there.
It was important tonight to go
through to the next round, for our
club and for our supporters.
We have two months left to the
end of the season. We have to try to
achieve what we have set ourselves for
this season.
Its only possible if the 25 players
in the squad are a little bit unselfish
and work together.
After a tight first half the visitors
broke the deadlock after 54 minutes
when Mata stabbed home following
an almighty scramble.
Meireles settled the tie six minutes
later with a rasping drive before Mata
saw a penalty saved by Colin Doyle.
Chelsea off
to winning
start under
Di Matteo
BY JAMES GOLDMAN
FOOTBALL

BIRMINGHAM
CHELSEA
0
2
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email sport@cityam.com
SPORT | IN BRIEF
De Luca returns for Scotland
RUGBY UNION: Edinburgh centre Nick
De Luca has been recalled to the
Scotland team to face Ireland in the Six
Nations in Dublin on Saturday. De Luca
replaces Rory Lamont, who suffered a
broken leg during the defeat by France a
fortnight ago.
Two youngsters leave Rangers
FOOTBALL: Youngsters Gregg Wylde,
20, and Mervan Celik, 21, have left
Rangers but the remaining squad mem-
bers are in discussions with the clubs
administrators over wage cuts. Wylde
and Celik, a Sweden Under-21 star, have
had their offers for voluntary redundan-
cy with no pay-off accepted.
Administrators Duff & Phelps have been
meeting the squad in an attempt to
agree on wage cuts as the club strives
to make monthly savings of 1m.
Van Persie scored
a penalty to
make it 3-0
Picture: GETTY
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