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WORLD’S LARGEST CATERER
COOKS UP GROWTH RECIPE
Issue 1,165 Tuesday 29 June 2010
HOUSE PRICE
BOOM STARTS
TO CRUMBLE
PROPERTY
▲
BY OLIVER SHAH
HOME prices fell for the first time in
more than a year in May, Land
Registry data showed yesterday, spark-
ing fears of a second downturn in
Britain’s fragile housing market.
The average residential property
dropped 0.2 per cent in value during
the month as uncertainty over auster-
ity measures to be enforced by the
incoming government weighed on
market confidence. The south-east
and London were insulated from the
dip, gaining 0.9 per cent and 0.7 per
cent respectively, but industrial areas
such as North Tyneside and Sheffield
suffered declines of up to 1.5 per cent.
Worst affected were the east
Midlands and Welsh regions Blaenau
Gwent and Denbighshire, which all
saw monthly slides of 3.6 per cent. In
Middlesbrough, where house prices
fell by 0.1 per cent during the month,
the average home has lost 9.2 per cent
of its value since the start of the year.
A separate report from Hometrack
suggested house price growth slowed
from 0.2 per cent in May to 0.1 per
cent in June.
FTSE 100 ▲5,071.68 +25.21 DOW ▼10,138.52 -5.29
&&&#('$
BUSINESS WITH PERSONALITY
RICHARD COUSINS INTERVIEW P24
The numbers come less than a
week after poor new home sales fig-
ures from the US sent a dramatic
shudder through global equity mar-
kets. Investors are concerned a dou-
ble-dip retrenchment in the housing
market on either side of the Atlantic
would severely hit consumer spend-
ing and risk dragging on the fledg-
ling economic recovery.
Howard Archer of IHS Global
Insight said: “The Land Registry data
for May and the June Hometrack sur-
vey both add substance to our long-
held belief house prices will struggle
to make significant gains over the
coming months. Housing market
activity remains well below long-term
norms despite edging up recently.”
Hometrack’s Richard Donnell (l) says sales
volumes are low while Carter Jonas’s David
Smith (r) says high-end homes will still gain
NASDAQ ▼2,220.65 -2.83
*
www.cityam.com
He added: “The economic funda-
mentals of high unemployment, still
falling full-time employment and low
earnings growth are hardly ideal, a
major fiscal squeeze is starting, credit
conditions remain tight and house
price-to-earnings ratios have moved
back up.”
David Smith of property consultan-
cy Carter Jonas said while properties
in desirable locations would continue
to gain in value, less fortunate areas
would see further depreciation.
Evidence indicates more people are
putting their homes on the market,
moving the supply-and-demand bal-
ance back in favour of buyers. The
shortage of properties has been a
strong driver of the pick-up in house
prices from their low point in the
first quarter of 2009.
Richard Donnell of Hometrack
said: “The growing supply-and-
demand imbalance spans the coun-
try and under normal market
conditions this would typically result
in a downward pressure on prices.
However, very low transaction vol-
umes are exacerbating the scarcity of
housing for sale and this is acting as a
support to prices.”
£/$ 1.51unc £/¤ ▲1.23 +0.01
 !"

# 
 #" ! "
Michael Grade has been in the chair for 10 years at Pinewood
Pinewood shareholder
calls on Grade to resign
▲
MEDIA
BY DAVID HELLIER
MICHAEL Grade, the former ITV chief
executive and current chairman of
soon-to-be floated online grocer
Ocado will today be urged to resign as
chairman of Pinewood Studios by one
of the group’s larger shareholders.
The embarrassing challenge to
Grade, which will be made at today’s
shareholder meeting, comes from
the 18 per cent holder Crystal Amber
which yesterday held a meeting with
him at its offices.
Grade attended the meeting
accompanied by one of Pinewood’s
¤/$ ▼1.23 -0.01
ALL CHANGE
AT THE FSA
SECOND EXEC
QUITS AHEAD OF
OVERHAUL P2
FREE
Picture: PA
advisers from JP Morgan Cazenove.
“We have tried to be constructive
and we have given the chairman a
number of suggestions about how to
improve the group’s performance
and improve perceptions about the
group but we feel we have been get-
ting nowhere,” a source close to
Crystal Amber told City A.M. yesterday.
Crystal Amber’s move will not help
sentiment towards Ocado, where
hopes of reaching a £1bn valuation
are being questioned in the City as
overambitious.
Last night sources close to Ocado
said the board is still “very support-
ive” of Grade.
Certified Distribution
3/05/10 - 30/05/10 is 106,097
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 2 News
Housing market is looking healthier
EDITOR’S LETTER
ALLISTER HEATH
THE long upwards run for house
prices has ground to a halt. The
recent history of UK house prices has
confounded many commentators: val-
ues plunged when the credit crunch
hit, albeit not as much as in the US,
then regained over half of their losses
over the past year. The present return
to stagnation makes more sense:
property remains expensive on price
to earnings valuation measures and
the last thing anybody needs is anoth-
er property bubble, followed by
another financial crisis.
So even home owners and property
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Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Lifestyle Editor Zoe Strimpel
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Pictures Alex Ridley
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Commercial Director Harry Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
SHIRE SEES SALES BOOST FROM RARE
DISEASE DRUG
Shire is bracing itself for a significant
boost in sales after European regula-
tors authorised teh use of teh compa-
ny’s experimental drug to treat an
extremely rare disease. In a decision
set to be ratified by the European
Commission in the coming weeks,
the European Medicines Agency has
approved the Irish-domiciled pharma-
ceutical group’s drug velaglucerase
alfa, known by the brand name Vpriv,
an enzyme replacement therapy for
Gaucher’s disease.
AGBANK FORCED TO CUT IPO PRICE
Agricultural Bank of China, which
hopes to raise as much as $23bn in
the world’s biggest initial public
offering, has been forced by the weak
mainland stock market to offer its
shares at a lower price range in
Shanghai than in Hong Kong.
investors should breathe a sigh of
relief on the news that the Land
Registry – the most comprehensive
measure – has reported that house
prices in England and Wales fell by
0.2 per cent month-on-month in May.
This followed a modest increase of 0.2
per cent in April and a drop of 0.1 per
cent in March – in other words, the
market is going nowhere. The year-on-
year increase in house prices eased
back to 8.2 per cent in May from 8.5
per cent in April.
Over time, house prices tend to rise
by roughly the same rate as nominal
GDP – around 6.5 per cent this year.
We may well end up at that rate of
growth for 2010 as a whole, which
would indicate a return to some sort
of rationality, albeit from an exces-
sively high price base.
Another way to look at all of these
numbers is to say that property is a
good way to enjoy the benefits of eco-
nomic growth while hedging for
inflation. The retail price index, a
broader measure of inflation than
Top exec set
to quit FSA
REGULATION
▲
BY STEVE DINNEEN
HECTOR Sants’ number two at the
Financial Services Authority (FSA) has
become the second high-profile casual-
ty of chancellor George Osborne’s
wholesale changes to banking regula-
tion.
Managing director of supervision
Jon Pain will join risk manager Sally
Dewar in quitting the FSA. Pain leaves
after it emerged Sants will keep his job
while the FSA is wound down. Sants
will then join the Bank of England as a
deputy governor.
An FSA insider told City A.M. Pain is
stepping down after realising his job
will no longer exist under the FSA’s
new structure.
The source said: “At the point of
restructure it became clear to Jon his
job would no longer exist – it’s as sim-
NOBLE AGREES TO BUY DRILLER FOR
$2.2BN
Noble, a Swiss oil drilling company,
has agreed to purchase FDR Holdings,
an independent driller, for $2.16bn,
marking the second major deal in the
industry since the Gulf of Mexico oil
spill in April. The deal comes amid
uncertainty over the future of off-
shore drilling in the US, as the gov-
ernment has sought a moratorium
after the oil spill from a rig contract-
ed by BP.
AIRCRAFT FINANCING STALWART
RETURNS WITH NEW VENTURE
Steven Udvar-Hazy, one of the biggest
names in aircraft financing, has
raised almost $3bn as he returns to
the aviation financing industry after
his departure from AIG’s aircraft leas-
ing division that he founded and ran
until earlier this year. Udvar-Hazy’s
new vehicle, Air Lease Corporation,
has secured about $1.2bn in equity
through a private offering, which is
expected to complete this week.
the official consumer price index, is
up by 5.1 per cent over the past year;
this is beginning to have a substantial
effect on those who hold cash or gilts.
As investors understand this, they
will buy property and sell cash.
There is more good news for house
prices. Primary residences do not
incur capital gains tax. The hike in
CGT to 28 per cent for top earners
(and the failure to reintroduce index-
ation for inflation) has made equities,
buy-to-let properties and other invest-
ments less attractive, as these are tax-
able – but the rise has increased the
incentive for people to buy even larg-
er primary homes. It makes more
sense to spend £150,000 on redoing or
expanding one’s home than to pur-
chase an investment property.
Buying property in and around
London is partly a bet on the future
health of the UK economy and of the
financial and business services indus-
try. Deleveraging, the bank tax and
the US banking reforms will all
cramp employment and earnings
ple as that. The new internal structure
just won’t offer the same scope for a
job of Jon’s power. It’s a personal deci-
sion and he has not been pressurised
from above.”
Pain will leave the organisation next
year as the watchdog’s powers start
being shifted to the Bank.
Last week Osborne announced he
will scrap the FSA in two years and
make Bank governor Mervyn King one
of the most influential central bankers
in the world. A new prudential regula-
tor, working under the auspices of the
Bank, will replace the FSA in 2012.
FSA managing director
of supervision Jon Pain
will announce he is to
quit his number two
position next year
BUSINESS CHIEFS BACK DEEP CUTS
Leaders of some of Britain’s biggest
businesses last night gave their
emphatic endorsement of the coali-
tion Government’s decision to cut
spending immediately in order to pay
down the deficit. Senior business
executives voiced their support for
the approach at a summit organised
by The Times and attended by the
Prime Minister, the Chancellor and
the Business Secretary.
RUTHLESS CUTS TOP CEOS’ WISHLIST
Changing the electoral system for the
House of Commons and sticking to
targets to cut the deficit were
amongst the key policy priorities put
forward by The Times CEO Summit.
The Summit was asked to vote on
which the policy proposals put for-
ward by seven taskforces during the
day should become national priori-
ties.
growth. However, real nasties, such as
truly crippling tax hikes on incomes
and profits or a Tobin tax, have been
avoided. Public spending will be
squeezed across the UK but London
and the South East, the least
socialised regions, will suffer the least
from this retrenchment and have the
most to gain from increased growth
in emerging markets. Many global
investors have been reassured by the
coalition’s election and especially
George Osborne’s Budget, which was
better than expected on the deficit
and not as bad as feared on competi-
tiveness-destroying tax hikes. The City
and Canary Wharf are unlikely to
become a desert of empty offices any
time soon, and Russian and Middle
Eastern demand for Mayfair assets is
unlikely to dry up.
On balance, house prices are still
over-valued. But as long as prices
remain stable for the next year or so,
the market will soon begin to look
much healthier for investors.
allister.heath@cityam.com
Headhunters are looking for Richard Lambert’s successor Picture Micha Theiner/City A.M.
Lambert to leave the CBI
POLITICS
▲
BY OLIVER SHAH
RICHARD Lambert, the business lob-
byist who caused a furore by warning
excessively-paid executives risked
being seen as “aliens”, is to step down
as director-general of the CBI.
Lambert will leave next year after
five years at the helm of the influen-
tial body. Saxton Bampfylde, the spe-
cialist headhunter, has been
appointed to find his successor.
Lambert joined the CBI in 2006
ASTRAZENECA AND BAE ARE
TAKEOVER TARGETS FOR CASH-RICH US
PREDATORS, SAYS S&P
Drugs maker AstraZeneca, defence
company BAE Systems and infrastruc-
ture group Balfour Beatty have been
named by Standard & Poor’s as poten-
tial takeover targets for cash-rich US
companies. Analysts at the credit rat-
ing agency listed the three UK-listed
companies among nine in Europe
that most closely matched the charac-
teristics of groups acquired by US cor-
porates in the past 12 months.
SPY SYSTEM FOR AIRLINES TO TACKLE
TERRORISM
Airline passengers could have their
conversations and movements moni-
tored under a EU project aimed at
tackling terrorism. A combination of
cameras, microphones, explosive snif-
fers and a computer system would
give a pilot early warning of danger.
CITYA.M. 29 JUNE 2010
NEWS | IN BRIEF
Blair wants public-private co-op
Tony Blair yesterday called for a flush of
private sector talent to brush the cob-
webs away from dusty Whitehall. The
former Labour leader effectively backed
a plea by Tory front-bencher Francis
Maude to reinvigorate the policy-making
corridors of power. Blair said rules limit-
ing interaction between public and pri-
vate employees, designed to prevent
conflicts of interest, should be examined.
But he defended the Labour party’s
attempts to centrally govern, saying “if
you are not driving things from the cen-
tre, nothing is going to happen.”
Siemens to set up its own bank
Siemens is seeking a banking licence to
manage its own risks and expand the
product portfolio of its financial services
unit, the German industrial conglomer-
ate said yesterday. Siemens, Europe's
biggest engineering company, said it had
applied for the licence to German finan-
cial regulator Bafin, which is now
reviewing the application. Chief financial
officer Joe Kaeser said Siemens was
seeking more independence from finan-
cial institutions as a result of the world-
wide financial crisis.
after a lengthy career at the Financial
Times, which he edited for a decade,
and a stint on the Bank of England’s
Monetary Policy Committee.
Lambert said: “Now is the right
time in the political and economic
cycle for me to hand over to a new
director-general... The economy is
moving into a new phase, in which
business investment and trade will be
essential engines of recovery.”
Chancellor George Osborne saluted
Lambert as a “fantastic” figurehead
who had “provided real leadership”.
SOTHEBY’S UNEVEN SALE TOTALS
$62M
Hindu’s elephant god of wealth,
Ganesh, once inspired contemporary-
art star Bharti Kher to create a huge,
fibreglass elephant lying slumped on
the floor, possibly dying or napping.
The artwork sends mixed signals, and
the same could be said of Sotheby’s
evening sale yesterday of contempo-
rary art in London which included
Ms. Kher’s £993,250 piece. Overall,
Sotheby’s £41.m ($62m) total bested
its £25.5m auction a year ago.
STUDIES CITE GLAXO DRUG HEART RISK
Two new studies released say the dia-
betes drug Avandia is unsafe, heating
up a controversy about a drug linked
in a number of studies to an
increased risk of heart attack and
heart failure. The reports were pre-
sented in the Journal of the American
Medical Association.
CITYA.M. 29 JUNE 2010
What could be
the biggest North
Seat oil find in a
decade boosted
the sector’s shares
yesterday
Picture: REUTERS
Shares gush
for oil firms
after big find
▲
MINING
BY JENNY FORSYTH
PREMIER Oil, EnCore Oil and Nautical
Petroleum saw their shares rocket
yesterday after a North Sea oil find
which has the potential to be one of
the area’s biggest in a decade.
The discovery at Catcher East, 110
miles east of Aberdeen, means the
field is estimated to hold up to 300m
barrels of oil, making it the biggest
find since the billion barrel Buzzard
reservoir off Aberdeen in 2001.
Now EnCore plans to drill a further
well to discover if it stretches further.
Premier, which owns a 35 per cent
share in the licence, immediately
upgraded its reserves estimate for the
block to between 50-80m barrels – up
on the 25-50m estimate it gave earlier
in June. Its shares rose 6.6 per cent to
close at £12.60.
It said in a statement that data
indicates Catcher East and the earlier
Catcher discovery are likely to be
“part of a single oil accumulation”.
Meanwhile smaller British explor-
ers EnCore and Nautical, which both
own 15 per cent stakes in the licence,
saw their shares shoot up by 48.6 per
cent and 22.5 per cent respectively.
Banks are still at risk but support
packages must end, says BIS
▲
BANKING
BANK profits cannot continue to rise at
their current levels, according to the
Bank of International Settlements (BIS).
The institution says the hike in
earnings seen in the wake of the col-
lapse is temporary and the sovereign
debt crisis could weigh heavily on
their bottom lines.
They could also be hit by tumbling
commercial property prices and
volatile currency trading conditions.
BIS also said governments must
slash budget deficits decisively and
central banks should not wait too
long to raise interest rates.
And it warned that if the support
News 3
ANALYSIS l Encore Oil
55
50
p
52.75
28 Jun Sentance: Interest
rates need to go up
40
30
20
10
29 Mar 20 Apr 11 May 1 Jun 21 Jun
ANALYSIS l Premier Oil quarter-point to 0.75 per cent, the
▲
BANKING
p BY HARRY BANKS first call for an increase by any mem-
1350
1260.00 ber in nearly two years.
28 Jun BRITAIN’S tough Budget does not In the first interview with an MPC
1250 remove the need to start raising member since the new government
interest rates now, Bank of England last week announced the harshest
Monetary Policy Committee mem- Budget in a generation, Sentance
1150 ber Andrew Sentance said yester- said the fiscal plans were much as
day. expected and did not change his
1050 Sentance shocked markets last view that it was time to start gradu-
29 Mar 20 Apr 11 May 1 Jun 21 Jun week when it was revealed that he ally withdrawing the extraordinary
had voted to raise interest rates by a stimulus now in place.
EnCore’s stock closed at 52.75p while
Nautical rose to 170p.
A further 20 per cent of the licence
is privately owned by explorer
Wintershall and a company backed
by Lord Rothschild, Agora Oil & Gas,
holds the remaining 15 per cent.
EnCore chief executive Alan Booth
said the find was exceptional, adding
“Initial analysis suggests a series of
discoveries that would form one of
the larger North Sea oil accumula-
tions of recent years.”
Oil would likely start to be pro-
duced at Catcher from 2013 or 2014
using a floating production storage
and offloading unit, said Premier’s
chief financial officer Tony Durrant.
He said that if the estimate of
300m barrels of oil in place at Catcher
is accurate, and if around 50 per cent
of that oil were recoverable, Catcher
would be one of Premier’s largest oil
fields and would boost the company’s
total reserves by 15 to 20 per cent.
“Regardless of further upside, the
discoveries are clearly commercial
and we would expect that develop-
ment studies will begin soon to bring
the fields rapidly into production,”
said Oriel Securities analyst Richard
Rose.
provided to the banking industry and
others in the private sector was kept
in place for too long, policymakers
ran the risk of creating “zombie”
banks or companies, dependent on
direct support.
But it acknowledged the tricky sit-
uation for policymakers and said the
stakes were high and the risks from
capping lifelines too early loomed
large.
In addition, central bankers may
underestimate inflation risks as the
crisis may have lowered the potential
growth rate. But it said challenges for
emerging economies were different
as they were recovering strongly and
inflation was picking up.
 4 News
Cap on non-EU immigration
is deeply worrying, say firms
▲
POLITICS
BY DAVID CROW
BUSINESSES are “deeply worried”
about the government’s plan to intro-
duce a permanent cap on immigra-
tion from outside the EU.
Baroness Valentine, the chief exec-
utive of lobby group London First,
said an arbitrary limit would run con-
trary to the claim that Britain is
“open for business”.
“Any talk of a cap is deeply worry-
ing. London is the most cosmopolitan
city in the UK, and has the highest
productivity. We need to maintain
that,” she added.
Valentine’s comments came as
home secretary Theresa May
announced a temporary cap on immi-
gration from outside the EU ahead of
a permanent limit to be introduced
in 12 weeks, following a period of con-
sultation with businesses.
The temporary curb, which will
take effect next month, will limit the
number of non-EU migrants to just
over 24,000 before April 2011, a fall of
five per cent on last year.
The government said that it need-
ed to act because uncontrolled immi-
gration was putting unbearable
strain on public services.
But Valentine said: “The problem
with a cap on non-EU migrants is that
EU migration is the real problem.
When people talk about pressure on
public services, they forget most
comes from within the EU.”
Transport secretary Philip Hammond is committed to high-speed rail Picture: REUTERS
Commuters
face rail fare
hike in 2011
▲
TRANSPORT
BY EMMA SADOWSKI
RAIL passengers could face a steep
rise in fare prices next year, according
to transport secretary Philip
Hammond, who said that the exist-
ing pricing formula might not sur-
vive the tough autumn spending
review.
Fares are expected to rise by more
than six per cent at the start of 2011
but Hammond has warned they
could climb even higher if the
Department for Transport (DfT) has to
make bigger cuts to its budget.
Hammond said that the DfT is hop-
ing it can hold on to the existing for-
mula, which places fare rises in line
with the retail prices index (RPI) and
adds one per cent.
He said: “We need to wait for the
spending settlement before I can say
what I have to do next year.”
His comments have angered rail
union RMT, which warned that fares
could be hiked, while orders for
rolling stock could be scrapped, put-
Osborne’s VAT increase passes in
Commons by 346 votes to 270
▲
POLITICS
CHANCELLOR George Osborne’s VAT
hike was rubber-stamped last night as
MPs in the House of Commons
approved his plans by a margin of 346
to 270.
VAT will now increase from 17.5 per
cent to 20 per cent on 4 January 2011.
Lib Dem chief secretary to the
treasury Danny Alexander defended
the budget, saying the VAT hike was a
CITYA.M. 29 JUNE 2010
ting projects in doubt.
“It could not be clearer – the gov-
ernment is planning to bleed rail pas-
sengers dry and attack essential
modernisation programmes while
ring-fencing the profits of the train
operators,” said RMT general secre-
tary Bob Crow.
Hammond maintained that he was
committed to high-speed rail and
projects such as Crossrail, which he
said could kill off domestic aviation
within decades.
But RMT criticised the govern-
ment’s supposed plans to reconsid-
er a £1bn electrification project
and said there was a possibility a
raft of rolling stock renewal orders
could be scrapped.
Crow said: “We could see fares
jacked up by as much as 10 per cent
while passengers are crammed into
ancient carriages running on creak-
ing track with huge safety risks the
length and breadth of the country.”
RMT said the 10 per cent figure was
an estimate and that it wasn’t based
on any calculations.
“Labour inheritance tax”.
The Treasury will be glad to put the
vote behind it after it emerged a
handful of Lib Dems planned to vote
against the proposals.
Four Lib Dem MPs – out of a party
total of 57 – signed an amendment to
the rise which would have required
an impact assessment on businesses,
charities and households.
But fears of a revolt were unfounded
as the vote was comfortably passed.
CITYA.M. 29 JUNE 2010 News 7

Relief well starts to close

in on source of Gulf oil spill
BP IN CRISIS
BY EMMA SADOWSKI
BP is one step closer to completing
the first relief well in the Gulf of
Mexico, putting the embattled firm’s
efforts to stem the oil spill ahead of
target.
Drilling for the first of two wells
came within 20 feet of the ruptured
Macondo well yesterday – bringing BP
closer to the leak than it has been
since the 20 April explosion on the
Deepwater Horizon rig.
In a technical briefing, BP’s senior
vice president Kent Wells said that
crews will drill a further 900 feet
down before cutting in to start its
attempts to stop the flow of oil alto-
gether by pumping heavy material
into the well.
This will only happen after a series
of tests, which will determine the dis-
tance of the well.
A second relief well is also being
drilled as a back-up should some-
thing go wrong with the first.
Despite the good news, BP contin-
ues to face a series of threats in its
attempt to stem the spill as the Gulf
region prepares to weather a series of
storms.
Wells remained confident yester-
day that an imminent tropical storm
would not have an impact on the cur-
rent drilling.

LOWEST FARES TO IRELAND...

Russia’s deputy prime minister Igor Sechin meets BP boss Tony Hayward Picture: GETTY

BP boss calms TOO CHEAP TO RESIST!

Russian fears
BP IN CRISIS
BY EMMA SADOWSKI
TONY HAYWARD, the embattled BP
chief executive, yesterday launched a
campaign to reassure top Russian
officials of the group’s stability.
Hayward, who met with govern-
ment figures, is on a charm offensive
to reassure the Kremlin over BP’s
local operations.
A number of concerns have been
expressed by the country’s govern-
ment over the future of the company.
Last week, the Russian ambassador to
Britain said the country needed reas-
surances that the firm would remain
strong.
Over a quarter of the group’s oil
output comes from its Russian joint
venture TNK-BP, making it the second
most important location after the US.
But yesterday, Russia’s deputy
NO WONDER EVERYONE
Prime Minister and energy official, FLIES RYANAIR!
Igor Sechin, was the latest to say he
expects Hayward to resign over the
disaster in the Gulf.
“We know that Tony Hayward is
leaving his position and he will intro-
duce his successor,” said Sechin.
A spokesperson from BP confirmed
that Hayward and Sechin met but
said the two did not discuss his role
as chief executive.
“Tony is still our chief executive,”
said the spokesperson.
Hayward is expected to meet with
TNK-BP partners later today. They will
look for assurances that a Gulf of
Mexico-style accident could not hap-
pen in Russia.
The markets received the news of
his Russian trip positively, with BP’s
shares up by as much as three per
cent towards the middle of the day
before closing up 1.3 per cent at
308.25p.

WHAT WILL RESTORE INVESTOR CONFIDENCE

IN BP? Interviews by Emma Sadowski
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FROM

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 8 News CITYA.M. 29 JUNE 2010

Mears moves to
Chief executive
Mark Tincknell
says Connaught’s
medium-term out-
look is still strong

reassure investors
extended version of a statement
▲

PROPERTY
SOCIAL housing maintenance firm
Mears moved to reassure investors
yesterday by reporting it has secured
revenues worth 91 per cent of consen-
sus forecast for the year.
The company said its order book
stood at £2.5bn, with a bid pipeline of
£3bn, and told the stock market it is
experiencing no downward pressure
on spending on social housing, in an
released on Friday evening.
Mears chairman Bob Holt said:
“Local Authority clients continue to
consider more innovative and higher
scale partnerships which is already
evidenced this year with major con-
tract wins.”
It made the announcement after
rival Connaught issued a profit warn-
ing. Mears shares closed up 0.4 per
cent at 250p yesterday.

Connaught in
tailspin after
profit warning
▲
PROPERTY
BY MARION DAKERS
SHARES in social housing mainte-
nance firm Connaught have lost over
half their market value since Friday’s
surprise profit warning.
The firm’s stock tumbled 37 per
cent yesterday, following losses of 33
per cent in the last half-hour of trad-
ing last week when the company
announced that 31 contract deferrals
from hard-up local councils would hit
full year revenues by £80m and earn-
ings by £13m.
Traders rushed to dump the stock
yesterday, with over 11m shares
changing hands. It hit a low of 131p
shortly after the markets opened,
before closing at 135p.
Shares in the company also saw
heavy losses in January, when chief
executive Mark Davies announced his
resignation. He was replaced by Mark
Tincknell, who said on Friday that the
company’s medium-term outlook
remained strong, with most of its
contracts linked to essential services.
Analysts at BNP Paribas were down-
beat about the stock. “Brokers have
spoken to other players in the indus-
try and while all expect conditions to
get more challenging, no-one else is
seeing declines on this scale, so
investors may conclude Connaught
had been attempting to rebuild credi-
bility after a disastrous six-month
period,” the broker said in a note.
Some analysts were more opti-
mistic. Richard Bennett from Altium
Securities said that while it is “clearly
disappointing news, this should leave
a more defensive group with limited
exposure to cyclical maintenance rev-
enues”.
He also drew attention to the cost-
cutting programme the company is
running over the next two years,
which is expected to save at least
£25m. The firm has also said it has a
£5.3bn bid pipeline.
ANALYSIS l Connaught
p
135.00
350 28 Jun
300
250
200
150
100
22 Jun 23 Jun 24 Jun 25 Jun 28 Jun

German banks face new levy but

rules on short selling loosened
Another component would be the
▲

BANKING
GERMAN banks face a new levy of
between five and 15 per cent of their
annual profits as their contribution to
the cost of the financial crisis, accord-
ing to a leaked draft law.
The rate of the levy will depend on
banks’ business volume and how
important they are to the broader
banking system, said the draft. The
German government hopes to raise
more than €1bn per year with the new
charge.
The levy would be assessed taking
into account the sum of the banks’ lia-
bilities minus the equity capital and
minus non-banking contributions.
nominal volume of off-balance sheet
derivatives, the draft said.
Germany, France and Britain have
said they aim to coordinate their
planned banking levies.
Meanwhile German Chancellor
Angela Merkel’s centre-right coalition
has announced plans to water down
its controversial decision to ban naked
short-selling.
The government will not prohibit
naked short-selling on certain day-
trading transactions. The revision says
short-term naked short-selling will be
allowed as long as the short-selling
transaction is completed by the end of
the day it was initiated.
CITYA.M. 29 JUNE 2010
Stan Chart in
line for $6bn
▲
BANKING
BY OLIVER SHAH
STANDARD Chartered stayed on track
to deliver around $6bn (£4bn) in full-
year pre-tax profits yesterday as it
said its consumer and wholesale divi-
sions traded strongly in the first half.
The London-listed bank, which
focuses on Asia, said improving eco-
nomic conditions and client confi-
dence meant income and profits ran
at record levels for the five months to
May, discounting an exceptional gain
of $248m. Income on a reported basis
for the first half is expected to be flat
year-on-year, but growing at a double-
digit rate on the second half of 2009.
Client income in wholesale bank-
ing was up 20 per cent year-on-year,
although competitive pressures
squeezed margins. Consumer bank-
ing income edged up year-on-year,
with mortgage income and wealth
management fees rising.
In a trading update ahead of its
interim results, Standard Chartered
emphasised its balance sheet had
Executives see euro weakening US consumer spending up
as saving hits new highs
as public debt woes rumble on
▲
ECONOMY
TWO thirds of business leaders and
finance directors expect the euro to
slide in the coming year as concerns
over sovereign debt refuse to dissi-
pate, according to a survey.
More than 66 per cent of company
executives interviewed by the
Economist Intelligence Unit for
investment bank RBC Capital Markets
thought the single currency would
continue to weaken. Many expressed
fears over a break-up of the Eurozone,
with Greece considered the most like-
“limited exposure to problem asset
classes, and no direct exposure to sov-
ereign debt in southern Europe.”
Chief executive Peter Sands said:
“Recent market volatility has had an
impact on sentiment. Despite this, we
are performing well.”
Ian Gordon, an analyst at Exane
BNP Paribas, said: “A good statement
was anticipated, a good performance
has been confirmed. There’s not so
much upside now which is why we’ve
seen people taking profits.”
Shares in Standard Chartered fell
1.84 per cent to 1710p.
ANALYSIS l Standard Chartered
1,850 p 1710.00
28 Jun
1,800
1,750
1,700
1,650
1,600
1,550
29 Mar 20 Apr 11 May 1 Jun
ly country to exit, followed by
Portugal, Spain and Ireland.
The responses reflect uncertainty
over periphery Eurozone nations’
ability to finance themselves and
gradually rein in their towering budg-
et deficits. Athens is struggling with a
shortfall of 13.6 per cent of GDP, more
than four times the European Union
limit. The Eurozone and
International Monetary Fund were in
May forced to agree a €110bn (£90bn)
support package for Greece should
the government be unable to tap debt
markets in the normal way.
Juggernaut begins to slow down
SUCCESS stories of this magnitude
are always a little too good to be
true. On the face of it, Standard
Chartered is probably the strongest
of the major banks: it avoided the
worst of the crisis; its Asian focus
means it is exposed to some of the
world’s fastest-growing nations; and
it holds a negligible amount of
Southern Europe’s sovereign debt.
Still, this statement creates a nag-
ging feeling that something isn’t
quite right. On 4 May, Standard
21 Jun
The majority of 440 people ques-
tioned by RBC said the dollar would
remain the reserve currency of choice
given the lack of viable alternatives,
with some believing the Chinese ren-
minbi would squeeze out the euro as
the greenback’s main competitor.
Richard Talbot of RBC said the
problem of rising national debt in the
developed world was complemented
by the growing economic gulf
between the west and east. “The
downside of growing sovereign debt
and pressure on currencies such as
the euro is clear,” he said.
Chartered informed markets of a
strong start to the year. Now we find
out that income in the first half will
be flat on the same period last year.
Trading on its own account has soft-
ened slightly, while wholesale bank-
ing revenues have been hit by jittery
markets in recent weeks, despite its
supposed shelter from Europe.
Costs are also creeping up, by
around two per cent year-on-year.
Standard Chartered reined in invest-
ment in the first half of 2009, partly
▲
WORLD ECONOMY
US CONSUMER spending rose moder-
ately in May even as savings touched
the highest level in eight months,
suggesting a tepid economic recovery
was still intact.
The data yesterday helped to allay
fears that consumers, key to reviving
the economy following the longest
and deepest slump in 70 years, were
retreating.
“Consumers are spending at a rea-
sonably solid pace, but are still con-
servative. With two months of the
(second) quarter in hand, consumers
are at roughly the same pace of
News 9
Stan Chart’s chief
executive Peter
Sands says the
bank has done well
despite market
volatility. It has
avoided exposure
to problem assets
and sovereign debt
in southern
Europe.
accounting for the rise. But a longer-
term drag on profitability is compe-
tition, which is hotting up in Asia,
meaning Standard Chartered is hav-
ing to fight tooth and nail to win
clients and talent. This situation is
likely to persist, meaning the
Standard Chartered growth story
will progress a little more slowly.
BOTTOMLINE
Analysis by David Crow
spending growth as we saw in the
first quarter,” said Julia Coronado, an
economist at BNP Paribas in New
York.
Spending increased 0.2 per cent
after being flat in April, the
Commerce Department said. That
was a touch above market expecta-
tions for 0.1 per cent. Adjusted for
inflation, spending was up 0.3 per
cent.
Investors, however, continued to
worry about the recovery’s strength.
A string of recent data, including a
report showing retail sales had
slumped in May, implied it was slack-
ening.
CITYA.M. 29 JUNE 2010
Aldermore to
deliver profit
▲
BANKING
BY OLIVER SHAH
ALDERMORE, Britain’s first private
equity-backed bank, expects to turn a
profit this year, less than 18 months
after it began lending to small busi-
nesses and entrepreneurs.
The institution, which is owned by
buyout house AnaCap and invest-
ment bank Morgan Stanley, is eyeing
a small gain after its commercial
mortgages, asset finance and invoice
finance arms performed ahead of
expectations. The bank has lent
around £300m to small and medium-
sized enterprises (SMEs) since it
opened its doors last summer and has
been processing 500 mortgage appli-
cations from companies each quarter.
Chief executive Phillip Monks said:
“We are ahead of plan across all our
business lines. The clear fact is the
established banking industry is not
able to satisfy the needs of the SME
community – banks are having to
recapitalise and the poor SME is not
getting a look in.”
CITY VIEWS: WILL ENGLAND’S FOOTBALL FAILURE AFFECT THE ECONOMY?
BEN WISE
LLOYD’S REGISTER
“I would have thought that it will
affect the economy positively, as
fewer people will be taking the day
off work to watch the matches.
Beer sales will be down, and retail-
ers with special
offers might lose
a bit, but the
impact won’t be
great - we would
have only played
three more
games.”
Monks and AnaCap began plan-
ning a new bank during the turmoil
of the financial crisis in 2008. They
bought Ruffler, a small family bank
in Surrey, for an undisclosed sum and
inherited its Financial Services
Authority (FSA) banking licence.
Renamed Aldermore, the firm began
lending last July, benefiting from
Ruffler’s £50m deposit base and book
of business focused on providing
finance to the slot machine industry.
AnaCap and Morgan Stanley have
so far injected £68m into the project,
with more capital committed to fund
future growth.
Aldermore made a pre-tax loss of
£12.9m in the nine months to
December 2009 as it overhauled
Ruffler’s technology systems and
made goodwill write-downs. Monks
said he hoped to beat his personal
record of delivering a profit within 18
months at Europe Arab Bank, which
he set up for Arab Bank in 2005.
Aldermore will continue to grow
its balance sheet slowly, Monks said,
and would “stick to its knitting”.
TONIA KING
CHARTIS INSURANCE
“A large number of people do take
it very seriously. The team’s success
gave a boost last week, despite the
budget. But it’s difficult to single
out and quantify the effect of the
football. People
will still be out
enjoying the
weather, so I
don’t think sales
in shops will be
affected that
badly.”
ALDERMORE
FORMERLY
RUFFLER BANK
ALDERMORE aims to be a conserva-
tive lender, but in its past life as Ruffler
it has a colourful history.
Ruffler was founded in 1969 by Roy
Ruffler, a businessman who made his
money importing coin-operated gam-
ing machines. Ruffler decided to start
lending to his industry colleagues and
was soon running a small institution
Interviews by Marion Dakers
JASON REDING
COBRA LONDON MARKETS
“No, I don’t think it will have any
impact. There was a lot of hype, but
I think we are all realists and we
knew this was coming, so I don’t
think there will be that much disap-
pointment. I don’t
think retailers will
see a drop in
sales, as the
weather’s still nice
and people will
still want to
spend.”
providing asset-backed finance to slot
gambling, amusement arcade and fair-
ground companies from a single branch
in Epsom, Surrey.
AnaCap pounced on Ruffler in late
2008. After talks with the bank’s own-
ers, and a three-month “change of con-
trol” application to the City watchdog,
AnaCap and chief executive-to-be
Phillip Monks took control of the bank
in May last year. Monks, who spent 23
years with Barclays before setting up a
European division of Arab Bank, says
the process of gaining regulatory
approval was “reassuringly difficult”.
A thorough makeover followed.
AnaCap, which brought in Morgan
Stanley as an investment partner,
World Cup flop to boost
cinemas and restaurants
▲
CONSUMER
ENGLAND’S failure to get past the sec-
ond round of the World Cup will give
a welcome boost to cinemas and
restaurants, analysts said yesterday.
Traditional boozers are set to lose
the most income, as fans tend to
watch non-England games at home,
according to Hugh-Guy Lorriman at
Seymour Pierce.
He said food-led pubs would be best
insulated from the losses, and restat-
ed a “buy” recommendation on
Greene King.
Betting chain William Hill has
enjoyed a “bookmaker friendly”
News 11
Aldermore chief
executive Phillip
Monks said all the
bank’s business
lines were beating
expectations
changed the deposit taker’s name to
Aldermore and ripped out the compa-
ny’s IT infrastructure, installing a new
system. AnaCap swiftly bought Base
Commercial Mortgages and Absolute
Invoice Finance, the commercial arm of
sub-prime lender Cattles, and merged
them into Aldermore.
Since then the bank has opened a
further five offices around the country
and stepped into the residential mort-
gage lending market. Although Monks
believes small businesses in Britain are
desperately short of financing, he is
determined to expand at a gradual rate.
Other buyout houses are now casting
their eyes over Aldermore and wonder-
ing whether they can do the same.
World Cup so far, according to Numis
Securities, though the analyst noted
that a number of high-profile upsets
and draw games in the tournament
have led to higher margins.
High Street retailer Curry’s said
yesterday it will recognise Lampard’s
disallowed goal as part of its “cash for
goals” offer, buoyed by Friday’s
announcement that underlying prof-
its jumped by 61 per cent last year.
Marketing director Niall O’Keeffe
said: “Like every other England fan,
and pretty much every person
around the world who watched the
match, we believe that Frank
Lampard scored a legitimate goal.”
 The Capitalist
12 CITYA.M. 29 JUNE 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

IT’S PRISKY “It gives you

a sense of
BUSINESS how small
businesses
OUTSIDE OF juggle tasks,”
THE HOUSE said Prisk,
before he Tim Larkin teaches bankers “how to kill”.

THE Capitalist caught up with minister of
state for business Mark Prisk yesterday
during his afternoon of cold-calling poten-
tial customers for small business DIY
Kyoto. The minister dropped in to the
small Bethnal Green-based firm, which
sells energy monitors for the home, as
part of a project to learn about the cur-
rent environment for small businesses.
“It’s been refreshing to get back into
business,” said Prisk, who ran his own
property services firm for ten years. “One
day isn’t going to give me instant expert-
ise but it gives you a sense of the way
small firms have to juggle different tasks.”
Prisk is due to visit four other firms
between now and September and chose to
drop into DIY Kyoto after a breakfast with
one of the business’ founders Richard
Woods. The firm’s management spent the
morning exchanging questions with Prisk
before putting him to work making sales
calls. What had he learned about priori-
ties for his own department, I wanted to
know? “The stuff government churns out
often wastes time and blocks stuff.”
But I was only allowed to speak with
him for a few minutes – he had to get
back to work on his unimpressive
progress through the sales calls list. “He
actually needs to make some calls now,”
said DIY Kyoto co-founder Greta Corke. It’s
a hard life outside the House of
Commons, Mark.
PUNTASTIC
Better Capital’s Jon Moulton was billed to
be giving a post-Budget analysis yesterday
morning in FinnCap’s Moorgate offices,
but he couldn’t keep solely to the topic
because, he declared: “The Budget really is
too dull to prompt a whole presentation.”
Instead, his City audience was
treated to his colourful take on
what he views as the shrunken
potential of today’s private equi-
ty world. From defining alche-
my to employing shipwreck
metaphors, he conveyed his
rather pessimistic view in a thor-
oughly cheerful manner,
declaring: “I’m really
depressed at the
lack of depressing
news.” According
to Moulton, the UK
economy is facing
the problem that
not enough firms
are being liquidat-
ed, rather than
that too many are
collapsing. That’ll
be news to some.
As for the cur-
rent private equity
environment? With an average of 0.6 deals
being done per firm per year, he says: “It’s
like being parked on Iceland during World
War Two – very quiet.” And on debt
Moulton coined what should surely be a
copyrighted phrase. Just remember: “A
rolling loan gathers no loss.”
IN ANOTHER LEAGUE
Never mind the banks – it’s the Premier
League we ought to have our eyes on,
according to a report released by AT
Kearney this week. Five analysts from the
consultancy firm conducted an investiga-
tion into the finances of Europe’s top five
football leagues and have concluded:
“Running as normal companies, the
leagues in Spain, England and Italy would
be bankrupt within two years.” Ouch.
The report highlights the leagues’ poor
return on assets (ROA) as of particular con-
cern: all three of them have negative fig-
ures, with Italy’s Serie A division getting
back 12 per cent less in profits than the
value of its assets.
It might be no surprise to depressed
England fans to learn that Germany’s
Bundesliga tops the ranking with its
two per cent ROA and an equity-to-
assets ratio of 36 per cent. While the
Premier League makes the most from
selling players at €489m, it manages
to overspend that by buying back
€580m worth of players. One of the
problems highlighted is a non-
alignment
of aims:
“Money
scores
goals,
b u t
goals are not
profitable.”
Still, at least
Fabio Capello
doesn’t have to
worry about this particular sub-par
performance. His nine-figure
was hauled
back to work.
Mark Prisk won’t be salary is paid by the completely separate
winning employee of Football Association.
the month after his
visit to DIY Kyoto.
Picture: REX
BANKERS’ BASH
Clearly the banker-bashing atmosphere is
getting dangerous for City denizens.
Bankers from Credit Suisse, Deutsche
Bank, Deloittes and JP Morgan spent last
Wednesday evening engaged in an “ulti-
mate violence” training session sponsored
by tailors Cad & The Dandy. US Navy Seal
trainer Tim Larkin taught them how to
kill and avoid being kneed in the groin –
essential know-how nowadays for our bat-
tered financiers.
Larkin says: “I try to impress on students
that violence is just another tool. You need
visions in your head so you can replicate
CITY EYE
them when you try to do them.” But
thankfully he wasn’t teaching his pupils
how to bring these violent visions into the
workplace. After training a group of New
York traders, he said it was all about the
thought processes behind the actions:
“The combat training somehow helped
them focus their priorities and read the
situations better.”
Plus when the pitchfork-waving crowds
arrive, you’ll be glad your firm brought
Tim Larkin in for a training day.
BUSY BEES
City dwellers might be wondering about
the curious appearance of a number of
pianos and beehives around town this
week (see City Eye). Both items have been
dotted about as part of the City of London
festival that goes on all this week, with the
hives there to “highlight the current
plight of the honey bee” in the face of its
hard work. Many a sorry banker will sym-
pathise, no doubt.
Meanwhile, St Paul’s Cathedral will host
an evening rendition of Haydn’s Creation,
with tickets from £5. But if you prefer your
music free, drop by Guildhall Yard where
an outdoor stage will feature a series of
live performances. Today’s playbill
includes the winners of the Music in
Offices’ 2010 office choir of the year
award, the Rhinegold Choir of Rhinegold
Publishing. If your office doesn’t have a
choir yet, bet you wish you did now.
Victoria Bates is away.
A MOTHER watches
her son playing a
piano in the church-
yard of St. Paul’s. The
pianos chained up
around town are part
of Street Pianos, a
City of London festi-
val event.
Picture:
Micha Theiner
/City A.M.
CITYA.M. 29 JUNE 2010
DP World in
listing delay
▲
INDUSTRY
BY JOHN DUNNE
DP World, the Dubai port operator,
has put off a London Stock Exchange
listing.
It is waiting for the merger of the
two Dubai exchanges where its shares
already trade before coming to
London. The earliest it can now look
for a dual listing is March 2011.
DP World had originally sought the
listing to attract investors from out-
side the Middle East as its home
bourse, Nasdaq Dubai, failed to
attract sufficient liquidity.
It said in January could list on the
LSE as soon as the second quarter of
this year.
“We are taking a cautious
approach and want to make sure that
shares are fully fungible between
London and Dubai,” a spokeswoman
said.
In April, DP World, which runs
operations at Tilbury and
Southampton and is building the
London Gateway container terminal
QinetiQ confirms deal with
unions for pay and benefits
▲
STEEL
DEFENCE firm QinetiQ has reached a
deal with union members to alter
redundancy rights in exchange for a
3.5 per cent pay rise, the company
announced yesterday.
Around three quarters of the 6,500-
strong workforce voted in favour of
the deal, in which redundancy pay
will be capped at four weeks’ pay per
year of service up to £90,000, or 15
years’ benefit, down from the current
rate of eight weeks per year for a max-
imum of 20 years.
approved an amendment allowing
the firm to seek a listing on the LSE.
“The (dual listing) did not make
much sense to most of the invest-
ment community here,” said
Mohammed Yasin, Shuaa Securities
chief executive, adding the compa-
ny’s investor base in Gulf Arab region,
not London.
The firm is one of the largest port
operators in the world and is 77 per
cent owned by the state-linked con-
glomerate Dubai World, which is
undergoing a repackaging of its
finances.
The ports operator has been seek-
ing a London listing via sterling
depositary interests.
In March, DP World’s chief execu-
tive Mohammed Sharaf said the LSE
listing is not to raise additional capi-
tal but to provide additional liquidity.
DP World shares fell 6.8 per cent on
the Nasdaq Dubai, following yester-
day’s announcement that the listing
would be delayed. However analysts
said the impact on the shares would
not be long term.
The deal applies to employees who
worked for the firm before it was pri-
vatised in 2001, and who signed gen-
erous civil service employment
contracts.
QinetiQ chief executive Leo Quinn
said: “This result is a credit to our peo-
ple in understanding the increasingly
competitive nature of our markets.”
A spokesperson for the Prospect
union, which represents 1,800 staff at
the Hampshire-based firm, told City
A.M.: “The agreement is not an
endorsement of the new terms; it’s
simply an acceptance of current cir-
DP world is
77%
owned by the
state-linked
conglomerate
Dubai World
It has
49
terminals
March 2011
earliest new
date of listing
cumstances.”
He also said the deal “sharply con-
trasts” with the £1.1m severance pay-
ment former chief executive Graham
Love received last November.
The aerospace and defence compa-
ny suspended its dividend for 12
months in May as it launched a two-
year program to restructure and repo-
sition the business.
The firm has said up to 1,000 jobs
could be lost in the restructure,
which follows two profit alerts in
recent months as the firm was hit by
spending cuts within the UK military.
6.8%
the amount DP
World shares fell
on the Nasdaq
Dubai after the
announcement
It operates
across
31
countries
EU prepares to fine steel
cartels for price-fixing
▲
UTILITIES
EUROPEAN Union antitrust regula-
tors are this week understood to be
preparing to fine steel companies,
including world leader ArcelorMittal,
for operating a cartel.
In October 2008, the European
Commission, the EU’s antitrust watch-
dog, charged several companies with
illegally fixing prices. The unidentified
companies make wire rods used in pre-
stressing steel for constructing bal-
conies and foundation piles.
ArcelorMittal said in February 2009
the European Commission had inves-
tigated three of its units and two for-
News 13
Western oilcos
move to end
trade with Iran
▲
MINING
IRAN faced growing economic pres-
sure yesterday after two Western oil
firms halted business with it, and a
Gulf Arab country seen as a trade life-
line for Tehran moved to freeze some
Iranian-linked bank accounts.
The developments underlined the
major oil producer’s increasing inter-
national isolation over a nuclear pro-
gramme it says is aimed at
generating electricity but major pow-
ers suspect is intended for making
bombs.
France’s Total joined an expanding
list of companies that have stopped
gasoline sales to Iran, and Spain’s
Repsol said it had pulled out of a con-
tract to develop part of the country’s
huge South Pars gas field in the Gulf.
“Total has suspended its sales of
gasoline or refined products to Iran,”
a company spokesman said in Paris.
The decisions were announced
four days after the US Congress
approved a bill to penalise firms sup-
plying gasoline to the Iran, which is
the world's fifth-largest oil exporter
but lacks sufficient refining capacity
for its own fuel needs.
mer units for possible anti-competi-
tive behaviour. The company declined
to comment yesterday.
The company has said it will
indemnify the current owners of
Emesa and Galycas, which it sold in
2004, from any possible fine.
The EU executive’s so-called state-
ment of objections or charge sheet
listed around 40 companies, with
many of them based in Italy, Spain
and Austria, the second person said.
The Commission, which can fine
companies up to 10 per cent of annu-
al sales for breaching EU rules, is
expected to reduce the penalties for
crisis-hit companies.

Uni pension fund
to vote on changes
▲
PENSIONS
BY HARRY BANKS
BRITAIN’S second-largest private
retirement scheme – which pays pen-
sions to university staff – could be
forced to cut benefits and shift away
from equities as it tackles a huge
deficit.
Next week, a University
Superannuation Scheme (USS) com-
mittee will try to decide between two
proposals to address a deficit which
stood at £17bn as of March.
The 7 July vote highlights the
dilemma faced by pension schemes
worldwide wrestling with rising
longevity in the midst of volatile mar-
kets and a fragile recovery, which has
dented scheme sponsors’ ability to
meet the growing costs involved.
The £30bn USS scheme, second in
size only to the BT Pension Scheme,
faces a choice between two plans.
One, from the universities, would
hike the age when payments start by
five years and increase contributions
from members by 18 per cent, while
those from employers remained the
same.
The basis for payments to new
entrants would change to an average
career salary from the final salary
arrangement used at present.
The second proposal, from the
University and College Union (UCU),
would keep the final salary arrange-
ment intact and only increase the
pension age to 65 for new entrants,
while placing the bulk of the burden
for extra contributions on the univer-
sities themselves.
In a UCU ballot earlier this month,
96 per cent of members voted to
reject the employers’ proposals.
UCU general secretary Sally Hunt
has said the employers “seem deter-
mined to create a two-tier system
which would damage recruitment
and retention of university staff”.
14 News
Taylor Wimpey in
volatility warning
▲
HOUSEBUILDING
BY RHIAN NICHOLSON
INTERACTIVE INVESTOR
HOUSEBUILDER Taylor Wimpey
has warned that conditions in the
UK housing market remain volatile
despite signs of greater stability in
recent months.
The FTSE 250 group said private
sales rates for the year to date are
“broadly in line” with those in the
first half of 2009 at an average of
0.58 sales per site per week.
Its order book is still strong and
it has sold 83 per cent of its full year
target for completions.
The UK’s third-largest house-
CABLE: CAR INDUSTRY NEEDS NO HANDOUTS
BUSINESS secretary Vince Cable said yesterday that the car making industry was no
longer in an emergency situation and therefore didn’t need any help from the govern-
ment. Cable said that the government has not made a decision on whether it will offer
subsidies to early buyers of low emission cars, thought to be £5,000 a car. He visited
Toyota’s Burnaston plant in Derbyshire yesterday.
builder by volume says its focus
remains on getting better prices
rather than increasing volume
with prices on reservations show-
ing a “further slight improvement”
since it issued its interim manage-
ment statement back in April.
It expects to complete 4,650
homes in the first half at an average
selling price of £167,000.
This compares with 4,702 homes
at an average selling price of
£153,000 in the same period last
year.
Cancellation rates are at historic
low levels with the year to date aver-
age running at 16 per cent.
The company said in statement:
Picture: PA
CITYA.M. 29 JUNE 2010
“We believe that the underlying
shortfall of new build housing and
the strong levels of demand will
continue to underpin pricing in the
housing market in the UK.”
ANALYSIS l Taylor Wimpey
45 p
40 29.57
28 Jun
35
30
25
29 Mar 20 Apr 11 May 1 Jun 21 Jun
Unite to delay
strike ballot on
new BA offer
▲
AVIATION
UNITE has decided to postpone ballot-
ing British Airways (BA) cabin crew on
another potential strike after the
trade union said that it will give
members time to consider a new offer
made by the airline.
A third strike ballot was expected
yesterday, but an offer made by BA
management last week caused Unite
to delay the vote.
“We have agreed to postpone the
strike ballot to allow the offer to be
consulted on,” a Unite spokeswoman
said yesterday.
The new offer from BA includes
two years of guaranteed rises in basic
salary from February 2011 in addition
to annual incremental pay increases.
BA said that if the ballot went
AHEAD, it would remove its offer.
“We believe our offer is fair and rea-
sonable and provides a genuine
opportunity to end this dispute,” a
spokesman from the airline said.
CITYA.M. 29 JUNE 2010 News 15

NEWS | IN BRIEF
Le Monde staff vote Angola expensive for ex-pats
Luanda in Angola is the most expensive

for Lazard-led offer

included partly state-owned company
place in the world for foreigners to live,
says research by consultants Mercer.
London is the 17th most expensive city
for expatriates, while Belfast is one of
the cheapest. It is the first time an
African city has topped the survey,
which measures 214 cities on the price
of 200 everyday items. Tokyo,

▲
MEDIA
BY STEVE DINNEEN
A CONSORTIUM led by Lazard banker
Matthieu Pigasse looks set to take
control of iconic French newspaper
Le Monde.
Staff at the firm overwhelmingly
backed an ownership bid from the
trio of left-leaning tycoons, which
also includes internet entrepreneur
Xavier Niel and the former business
partner of late fashion designer Yves
Saint Laurent.
The vote dealt a blow to President
Nicolas Sarkozy, who had threatened
to withhold state subsidies from the
65-year-old newspaper if the Pigasse
Banker Matthieu Pigasse fought off competition from France Telecom Picture: GETTY bid beat a rival consortium that
France Telecom, Nouvel Observateur
magazine owner Claude Perdriel, and
Spanish media group Prisa, publisher
of El Pais.
Le Monde staff unions said more
than 90 per cent of employees voted
for the Lazard banker’s €110m bid.
The newspaper’s key shareholder is
its journalists’ union, which support-
ed the Pigasse bid.
Losing bidder France Telecom
said in a statement: “We agreed to
withdraw our offer after [yester-
day’s board] meeting, regardless of
its outcome, as we had committed
to do so in the event of an
unfavourable vote from Le Monde’s
journalists’ union.”
N’djamena in Chad, Moscow and Geneva
make up the top five.
Luxury hotel focuses on China
Luxury hotel chain Mandarin Oriental
International is planning on almost dou-
bling its international presence in the
next three years and sees China as a
major focus, the company said yester-
day. The hotel investment and manage-
ment group will grow from about 24
deluxe hotels and resorts currently, to
about 42 in the next 36 months, the
firm said. The hotel chain is also turning
its attention to a small but growing
group of high-income Chinese travelers
and announced it will manage a luxury
hotel in Doha, the capital of Qatar.

Knight Vinke builds

up a stake in Kesa
A Kesa spokesman said: “We have ance of £76m and up from £69.5m
▲

FINANCE
BY STEVE DINNEEN
ACTIVIST investor Knight Vinke has
bought a three per cent stake in
electrical retailer Kesa.
The move sent shares up nearly
two per cent, amid speculation the
investor may push for the group to
be broken up.
Knight Vinke is known for its
activist tendencies, having demand-
ed changes at firms including
HSBC, Royal Dutch Shell, VNU and
Suez.
Knight Vinke founder
and chief executive is
known for pushing for
wholesale changes in
his investments
been notified of the stake. We have made in 2008-09.
no further comment to make.” The group, which trades in 11
Knight Vinke was not available countries, said revenue rose 3.4 per
for comment. cent to £5.1bn.
The Comet owner last week Comet saw a rise in annual prof-
announced plans to freshen up its its of almost 14 per cent.
image after coming under pressure The chain made £11.5m in the
from Best Buy Europe, a joint ven- year to the end of April, compared
ture between US retailer Best Buy with £10.1m a year earlier
and Carphone Warehouse. It has
also felt the bite of a resurgent DSG ANALYSIS l Kesa Electricals
International, owner of Curry’s. p
135
Kesa posted an 18 per cent rise 130
in full-year profit last week, as
improved gross margins offset a 122.40
decline in underlying sales 120 28 Jun
growth.
The firm, which also runs mar- 110
ket leader Darty in France, made an
underlying pre-tax profit of £81.9m 100
for the year to 30 April
That was ahead of company guid- 29 Mar 20 Apr 11 May 1 Jun 21 Jun
 16 News
Nordic Investment Bank to
hike capital base for projects
▲
BANKING
BY HARRY BANKS
THE Nordic Investment Bank (NIB)
said its board has agreed to hike the
bank’s capital base by €2bn (£1.63bn))
to better fund projects, especially in
the environmental and transport
fields.
“There are reasons to believe that
the demand for long-term financing
will remain high in the coming years;
also when the current crisis is over,”
said chief executive Johnny Akerholm
yesterday.
“With the increased capital NIB is
better equipped to continue its
important activity in helping the
Nordic and Baltic countries to sup-
port competitiveness and protect the
environment,” he said.
NIB’s member countries are
Denmark, Estonia, Finland, Iceland,
Latvia, Lithuania, Norway and
Sweden. Contributions are linked to
countries’ gross national income.
The NIB said that after the hike its
authorised capital stock would rise to
€6.1bn. Sweden’s share is the largest
at 34.6 per cent and Iceland and
Estonia’s the smallest at 0.9 per cent.
The NIB was established in 1975,
and has since moved from its original
goal of promoting economic cross-
border cooperation and integration
among member countries to support-
ing competitiveness and the environ-
ment. It has a €22.4bn balance sheet
and €13.8bn loan portfolio.
Greek Prime Minister George Papandreou has agreed to issue T-bills
Greece plans
T-bill auction
▲
EU ECONOMY
BY HARRY BANKS
GREECE yesterday announced plans
to issue Treasury bills in mid-July to
cover maturing debt.
The move is seen by analysts as a
bold but risky test of market appetite
as it is Greece’s first auction since
securing a mammoth EU and IMF
bailout last month.
The debt-choked country is not
expected to issue longer-term debt
before 2012 but is allowed to issue T-
bills, which have shorter maturities,
under the terms of the three-year,
€110bn (£90bn) emergency funding
programme. In mid-May, Greece
received a first, €20bn tranche from
the EU and IMF, allowing the govern-
ment to redeem €8.5bn in maturing
10-year Greek government bonds.
“It could prove in the end to be a
good idea but it could also end in dis-
aster,” said Carsten Luedemann, fixed-
Sweden finishes top in the digital
economy stakes, with UK in 13th
▲
TECHNOLOGY
SWEDEN has knocked Denmark off
the top spot in digital economy rank-
ings.
The list, compiled by the Economist
Intelligence Unit assesses the preva-
lence and quality of countries’ broad-
band and mobile access, based on
fibre and 3G connections.
The US finished third, with the UK
dropping a place to end up 14th – one
CITYA.M. 29 JUNE 2010
Picture: GETTY
income strategist at DekaBank.
“If they don’t find any bids at all or
only at ridiculous levels this would
prove finally that Greece is not able to
go to the markets, this would be a dis-
aster for Greece.”
Luedemann said there was a small
chance Greece could sell three or six-
month T-bills slightly cheaper than
the rate of about five per cent it will
pay on its bailout, because these bills
fall due before the financing guaran-
tee for Greece expires.
A total of €4.56bn of T-bills mature
in July – €2.16bn of one-year and six-
month government paper are due on
16 July and another €2.4bn of 13-week
T-bills on July 23.
“Greece will go to the markets mid-
July, issuing T-bills of three, six and
twelve months,” said deputy finance
minister Philippos Sachinidis.
Before yesterday, Greek officials
had only said they were considering
the T-bill auction.
place ahead of Japan.
Azerbaijan finished last out of the
70 nations surveyed.
A spokesman said: “This year’s
leader, Sweden, and most of the other
top-tier countries boast, along with
high degrees of connectivity, stable
business and legal environments;
strong educational and cultural driv-
ers; supportive government policies;
and active and growing use of digital
services by individuals and businesses.”
CITYA.M. 29 JUNE 2010 News 17

Product placement
BT Vision chief
executive Gavin
Patterson says his
customers will
flock to its Premier

rules are laid out

League offering

Picture:
PHOTOSHOT

sugary food. It also said product

▲
MEDIA
BY STEVE DINNEEN
OFCOM yesterday published a series
of proposals for new rules to allow
product placement on radio and TV.
Ofcom says it plans to restrict the
types of products that can be placed.
Companies advertising gambling,
tobacco, alcohol, baby milk and med-
icines will be banned from product
placement, as will sellers of salty and
placement will be banned in all chil-
dren’s, news and current affairs pro-
grammes.
The proposals also include a
requirement for broadcasters to let
viewers know which programmes
contain product placement through
the use of an on-air symbol at the
start and end of shows.
The regulator said the changes
would open up new revenue streams.

BT strikes up
a footy deal
with BSkyB
information soon.
▲

MEDIA
BY STEVE DINNEEN
BT HAS finalised a deal with BSkyB
to offer its subscribers top-flight
football next season.
The move, which means football
fans can watch their teams on BT
Vision for the first time, could rock
Sky’s dominance of the pay TV mar-
ket after decades controlling the
lion’s share of subscribers.
It follows a controversial Ofcom
ruling that Sky must immediately
slash the wholesale price it charges
rivals for Sky Sports 1 by 23.4 per
cent to £10.63 a month. The whole-
sale price for both premium Sky
Sports channels together was cut by
10.5 per cent to £17.14.
BT says it will release prices for the
channels soon but they are expected
to compete heavily with Sky.
BT Vision director Tony Ball, a for-
mer Sky chief executive, has been
privately pushing for BT to offer the
football at massively reduced rates
for customers who also sign up for
its fixed line and broadband services.
Sky’s closest rival Virgin Media,
with 4.5m subscribers to Sky’s 9m, is
also expected to release its pricing
Sky has taken Ofcom’s ruling to
the courts and had hoped to block
the price drop until a full hearing,
expected next year. However, it was
decided the difference between Sky’s
intended price and the enforced cap
should be paid into an escrow
account, which will eventually be
handed to the victor.
Gavin Patterson, chief executive of
BT Retail, said: “We are delighted we
can be certain of offering Sky Sports
1 and Sky Sports 2 to our customers
before the football season kicks off.
We know our customers will be keen
to sign up for the two channels.”
Ofcom says opening up the mar-
ket could lead to an extra 2m con-
sumers of premium TV channels by
2015 and estimates Sky could gain
£600m over five years through extra
wholesales.
However, Sky believes the gain
could be eaten by its subscribers leav-
ing for cheaper rivals. In a move
described by Sky as a “sop”, the
broadcaster has been given the go-
ahead to sell its premium content
through Freeview, meaning it could
reach millions of homes that do not
subscribe to its satellite package.

iPhone outsells Software firm

the Apple iPad Zoo falls to loss
▲

TECHNOLOGY
APPLE’S iPhone 4 launch has been its
most successful ever, shifting 1.7m
units worldwide by Saturday, the
company said.
Sales of the touchscreen smart-
phone, which competes with devices
from Nokia, Research In Motion and
Motorola, surpassed some analysts’'
expectations, as well as those of Apple
itself, which has been having trouble
keeping up with demand.
In a statement, chief executive
Steve Jobs apologised to “customers
who were turned away” because the
company did not have enough sup-
plies of the iPhone 4.
TECHNOLOGY
THE Sheffield-based firm that sup-
plies software to Hollywood film stu-
dios yesterday reported a loss despite
a spike in revenue.
Its revenue increased 33 per cent to
$15.1m (£10.04m) but it still drooped
to a pre-tax loss of $868,000, com-
pared to a $380,000 profit the year
before.
Zoo specialises in software that
allows movies to be converted into
multi-language formats more easily.
The firm also announced it has
pulled in another major Hollywood
client and remained upbeat about
the future.
 18 News
Thinking more inclusively can boost business
DRAGON’S VIEW
JULIE MEYER
E
VERY entrepreneur I have ever
met, and that’s quite a few, has
expressed on some level exasper-
ation with the public for not get-
ting what they are bringing to life.
The best ones focus on educating their
audiences; the ones who never break-
through drivel in their exasperation.
To some extent, they are right. A car
is not a faster horse. You had to think
fundamentally differently to imagine
a car in the era of horses, and then to
roll them out into people’s lives. The
future of entrepreneurship however
will be more group activity than soli-
tary whinge.
We live, for the first time in history,
in a world where being part of a glob-
ally-interconnected group is the nor-
mal case for most citizens.
Clay Shirky, a leading thinker,
argues in his second book “The
Cognitive Surplus: Creativity and
Generosity in a Connected Age” that
the internet’s lowered cost for group
collaboration enables us to be innova-
tive and generous in yet to be fully
exploited ways.
Change, such as that of moving
from horses to cars, happens when
society moves from thinking of a crisis
as bad to an asset. How can we organ-
ise ourselves better? Is there a more
inclusive way of operating?
Shirky picks on the decline in the
watching of television to explain that
collaboration whether through face-
book or wikipedia is on the rise.
Humans want to do things together,
3 0 T H J U N E / 1 S T J U LY 2 0 1 0
• Free Exhibition • Free Seminars
Supported by:
and the energy which had been chan-
nelled into passive TV viewership has
been unlocked. He calls this one
example of the emerging overwhelm-
ing cognitive surplus.
The government’s Big Society cam-
paign theme fits in nicely here. Gone
are the passive receipt of what the
state has in mind for you. Arriving
soon are the ways that you co-create
your common destiny with your fel-
low man, your neighbourhood, your
civic society. Set up a school?
Volunteer locally? Mentor the youth?
Overall, the most interesting
insight I found in Shirky’s hypothesis
is that more of life can be explained
NEWS | IN BRIEF
Cobham wins missile contract
Defence technology group Cobham has
been awarded a $17.4m contract from
Raytheon Missile Systems for its Cobham
Sensor Systems business to make
microwave modules for use in ground-to-
ground and air-to-ground missiles. Andy
Humen, president of Cobham Sensor
Systems, said: “This award is a further
indication of the strong technical and
business relationship that exists between
Cobham and Raytheon.”
R O YA L H O R T I C U LT U R A L H A L L S , L O N D O N
BAHRAIN K U WA I T OMAN
Everything you need to
know about investing & doing
business in the Gulf States
• Free Networking
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www.gccbritainexpo.com
CITYA.M. 29 JUNE 2010
by accidents of history than
immutable laws of nature. For those
of us who enjoy asking “why not?” –
we can smile.
So what’s the overall theme for
business building? Enable participa-
tion at all levels. The winners are
those firms who seek to build a better
mousetrap by valuing and enabling
everyone’s input into what that
mousetrap should be like. Those firms
leveraging the cognitive surplus of
their people will achieve lift off soon-
er and more substantially.
Julie Meyer is chief executive of Ariadne
Capital and a dragon on the BBC’s Online
Dragon’s Den.
Special projects win for Anglian
Anglian Water has won a five-year spe-
cial projects framework worth up to
£90m from housebuilder Galliford Try’s
water business in a joint venture with
Imtech. The framework will include one-
off large schemes such as biosolids treat-
ment plants. Galliford Try chief executive
Greg Fitzgerald said: “We are delighted
to renew our longstanding relationship
with Anglian Water, underlining our lead-
ing market position.”
Q ATA R SAUDI ARABIA UA E
Sponsored by:
CITYA.M. 29 JUNE 2010
Theo Fennell
launches into
youth market
▲
RETAIL
BY JOHN DUNNE
BRITISH jeweller Theo Fennell –
championed by celebrities like Elton
John and Naomi Campbell – plans to
launch a range of lower-price prod-
ucts to target younger customers, the
firm said yesterday.
The new range of silver jewellery,
to be priced between £70 and £2,000,
is part of the company’s turnaround
plan.
Theo Fennell made a loss before tax
and one-off items of around £250,000
in the year ending 31 March.
That was an improvement on the
£2m loss reported the year before.
Theo Fennell’s eponymous founder
returned to the company last year in
a bid to reverse a steep decline in its
fortunes.
The firm, which typically sells jew-
ellery priced at a minimum of £1,000
is aiming to encourage a wider cus-
tomer base.
Chief executive Barbara Snoad said:
“We are broadening the type of cus-
News 19
Capello takes
over the reins
at Liberty
CONSUMER
▲
A FORMER investment banker will be
the new head of Liberty department
store.
Marco Capello leads the private
equity team that yesterday finalised
its £32m deal for the historic Regent
tomer and trying to appeal to Street store.
younger people and other groups. BlueGem Capital Partners, run by
“We are not diluting the brand former Merrill Lynch bankers, said it
because the quality is still there.” would “continue to revive this utterly
On the company’s improved bal- unique British brand”.
ance sheet, she said: “The manage- Capello said: “Liberty has always
ment team is now putting its foot on been a beacon for cutting-edge artists
the accelerator pedal.” and designers.
Fennell’s flamboyant designs -- “It is a national treasure – one that
from skull rings and diamond-stud- we intend to nurture and grow.” He
ded crucifixes – became synonymous said the fabrics section and jewellery
with the conspicuous consumption room would be expanded.
of the late 1990s. Geoffroy de la Bourdonnaye had
Seymour Pierce analyst Freddie been chief executive for three years.
George said the new lower-priced The French businessman stays on as a
range could be “transformational for non-executive director.
the business in the medium term”. He was given credit for making the
The new “silver diffusion” range traditional brand more modern. Sales
will be launched in October. grew 20 per cent last year, and in the
first half of this year the company
FAST FACTS | THEO FENNELL became profitable for the first time in
a decade.
● Typically Theo Fennell jewellery costs Deals with big labels, designers and
upwards of £1,000. artists such as Grayson Perry have
● Like for like sales increased by 23 per cent in drawn in younger shoppers and fresh-
the second half of the year. ened up ranges throughout the store.
● The company made a pre-tax loss of £250k. Liberty had been majority-owned
Theo Fennell is targeting a wider customer base Picture: PA by hotel group MWB.
 20 News CITYA.M. 29 JUNE 2010

SRG to raise £25m from IPO TIM LINACRE

PANMURE GORDON
Gray himself preferred to keep a low
profile ahead of the marketing road-
show that is taking place over the
next few days. “It’s really early on in
the process,” said a source, “and
Richard will want to keep his head
RESOURCES down until he knows the deal is defi-
▲

BY HARRY BANKS
THE owners of British coal miner
Scottish Resources Group are seeking
to bank more than £200m next
month by selling stakes held for 16
years in an initial public (IPO) offer.
The company is currently mostly
owned by investment vehicles
Parkburn and Palmaris Capital, who
have held their stakes since 1994
when it was created out of the privati-
sation of UK state miner British Coal.
The two investors – which hold 71
per cent and 16 per cent in SRG
respectively – could sell all their hold- valued at up to £250m, one banking
ings through the offer, sources said. source said. nitely going ahead and until he knows
Palmaris, in a separate statement, Don Nicolson, chief executive of the price at which the shares will be
said it might sell “most or all of its Scottish Resources said in an inter- Scottish Resources Group is being issued.”
shareholding”, but that a final deci- view that the money raised for the advised on its possible flotation by the Other advisers to Scottish Resources
sion depended on demand for the company in the IPO is “sufficient for City broking house and investment include the law firm Eversheds and
shares. (the company’s) needs in the short to group Panmure Gordon, whose chief the financial public relations group FD,
Scottish Resources will also seek to medium term”. executive is Tim Linacre. whose team includes Billy Clegg,
raise about £25m in new cash, to Scottish Resources is Britain’s Linacre said yesterday that the Edward Westropp and Geoffrey
finance acquisitions and boost its bal- largest surface coal mining company Panmure team on the deal is being led Pelham-Lane.
ance sheet, the company said in a and accounts for 20 per cent of the by Richard Gray. “It’s Richard’s deal,” Palmaris Capital, which has a 16 per
statement yesterday. country’s total coal production. It has said Linacre; “he’s known the group for cent stake in Scottish Resources that
The company will announce a price nine operating surface coal mine years.” it may be selling, is being advised by
range by the end of next week and sites in Scotland, which produced Also working on the flotation is John Llewellyn-Lloyd and Harry
the deal will result in a free float of 3.4m tonnes of coal in the year to 27 Edward Farmer and Giles Stewart. Stockdale of Execution Noble & Co.
nearly all the company, which may be March.

Retail advisers
will have to meet
stricter new FSA
standards
3 years to become qualified

48%
Picture: GETTY

are already qualified

30% are studying to

write qualification exams

Modern Office
25% obtained a
qualification before 2007 but
were not influenced by RDR

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FINANCIAL SERVICES date with all policies and will need is expected to cost between £60 and
▲

BY EMMA SADOWSKI
THE FINANCIAL Services Authority
(FSA) has finalised a list of require-
ments retail investment advisers
will need to meet before they can
operate under the new Retail
Distribution Review (RDR).
Within the next three years, the
FSA has proposed that investment
advisers will have to hold a state-
ment of professional standing,
which confirms that the adviser
meets the new professional stan-
dards terms.
Under the new requirements,
advisers will need the appropriate
www.mediaplanet.com qualification, will have to be up to
to follow a strict ethical code.
The FSA said that it has added 13
new qualification measures,
including industry exams, making
the system more comprehensive
for advisers.
“From January 2013, customers
will be in a position to know that
anyone registered with the FSA to
give retail investment advice is
fully qualified to do so, and any rec-
ommendations will be made solely
in the interests of the customer,”
said Sheila Nicoll, the FSA’s direc-
tor of conduct policy.
But investment advisers will
have to fork over the money to pay
for their own qualification, which
£175 per person. Advisers also have
to get verification from an accredit-
ed body.
Almost 50 per cent of investment
advisers already hold some form of
qualification, while 30 per cent are
currently studying towards obtain-
ing one, according to the FSA.
The finance watchdog said that
the qualifications form part of its
plan to enhance the reputation of
the retail investment market by
“instilling greater professionalism
and ethics”.
Nicoll said: “Enhancing trust
between customer and adviser is
absolutely vital for the future pros-
perity of the investment market.”

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Awards 2010 Awards 2010 APOLLO VICTORIA THEATRE SW1V 1LG

CITYA.M. 29 JUNE 2010 News 21

ANALYSIS l Tax revenue as a share of gross domestic product:

UK tax rate on Sweden

47.1% The Eurostat study showed the
average tax rate on labour, seen as

capital is the
discouraging job creation, was the
UK Latvia highest in
Denmark
37.3% 48.2% 28.9%
Ireland
Italy at42.8 per cent,
and the lowest in

highest in EU 29.3% Belgium

44.3% Slovakia
29.1%
Romania
Ireland at 24.6 per cent.

28%
▲

EU ECONOMY
BY STEVE DINNEEN
THE UK has the highest tax on capital
in Europe, at 45.9 per cent, according
to new research by Eurostat.
Our capital tax rates, measured at
the height of the recession in 2008,
were almost double the European
average of 26.1 per cent.
The lowest implicit tax rates on cap-
ital were recorded in Estonia (10.7 per
cent), Lithuania (12.4 per cent) and
Ireland (15.7 per cent). Second and
third highest nations were Denmark
(43.1 per cent) and France (38.8 per
cent).
The report by the statistics
department of the European
Commission showed tax levels are
extremely high in the EU compared
to other major economies such as
Japan and the US.
The overall ratio of tax to economic
output was 39.3 per cent across the
EU in 2008, more than a third above
the level recorded in the US and
Japan.
It also showed wide discrepancies
within the EU, with Nordic countries
imposing the highest taxes.
Tax revenue as a share of GDP was
highest in Denmark (48.2 per cent),
Sweden (47.1 per cent) and Belgium
(44.3 per cent). It was the lowest in
Romania (28 per cent), Latvia (28.9 per
cent) and Slovakia (29.1 per cent). In
the UK it was 37.3 per cent.
Among the broadly wealthier, west
European countries, Ireland had the
lowest taxation ratio at 29.3 per cent.
Italy had the highest rate of taxa-
tion on labour at 42.8 per cent.
Denmark had the highest rate of
tax on consumption at 28.4 per cent.
FAST FACTS | EUROPEAN TAX
● Ireland has the lowest average taxation of
any of the wealthy, west European countries.
● VAT in the EU nations ranges from 15 per
cent in Cyprus and Luxembourg to 25 per cent
in Denmark, Hungary and Sweden.
The study by statistics office
Eurostat said the overall ratio of
tax to economic output was
39.3 per cent
across the EU in 2008, more
than one third above the level recorded
in the United States and Japan.
Sweden, Belgium and the
Netherlands had the highest tax
rates on personal income, all above
50 per cent,
while Bulgaria had the lowest at
per cent.
Attempts to harmonise taxes
have been blocked a coalition of
countries, led by Britain, that say
taxation is purely a matter of
national governments and
not Brussels institutions.
Highest
Lowest
 22 News CITYA.M. 29 JUNE 2010

URS set to buy Scott Wilson Senior says outlook is healthy

for commercial aircraft market
Friday close, but it jumped as much of the proposed URS deal going
▲

M&A
as 89 per cent to 226p yesterday. through because of the synergies of board’s expectations,” Senior said in a

BY HARRY BANKS
US ENGINEERING firm URS said its
unit agreed to buy British peer Scott
Wilson Group for £161m in cash,
while another US firm said it was
considering a cash offer for the com-
pany.
The 210p per share offer from URS’
unit Universe Bidco was at a premi-
um of 76 per cent to Scott Wilson’s
In a statement, CH2M HILL, a
Colorado-based engineering and
design consultancy, said it had under-
taken due diligence on Scott Wilson
and it was considering making a cash
offer for the company.
CH2M’s offer was likely to push up
the current offer from URS, Panmure
Gordon analyst Mike Allen said.
However, there was a good chance
the deal, he said, upgrading the stock
to a “buy” recommendation.
Scott Wilson chief executive Hugh
Blackwood said: “We did make clear
that sometime ago we had received a
number of approaches. The board has
recommended the URS offer.
“We have had a note from CH2M
this morning, but so far we have
nothing else [from them].”
▲
ENGINEERING
ENGINEERING firm Senior said its
earnings for the first half of 2010
would be in line with the board’s
expectations and said the outlook
was healthy, buoyed by improved
order books at its major clients.
“The group has traded strongly,
with profitability for the first half of
2010 anticipated to be in line with the
trading statement yesterday.
Senior, which makes aerospace and
automotive parts, said that the large
commercial aircraft market has per-
formed well so far in 2010, and that it
stands to benefit from improved
order in-take at aircraft makers
Boeing and Airbus.
It said the large commercial air-
craft market remains positive.

Tesla offers BEST OF THE BROKERS

ANALYSIS l Ladbrokes
165 p
224.00
28 Jun
ANALYSIS l Allianz
100 €
ANALYSIS l Repsol
19 € 17.19
28 Jun

more shares
160 95
18
155 82.79
90 28 Jun
150 17
145 85

140 16
80

in flotation
135

130 75 15
29 Mar 20 Apr 11 May 1 Jun 21 Jun 19 Apr 7 May 27 May 16 Jun 19 Apr 7 May 27 May 16 Jun

LADBROKES ALLIANZ REPSOL

Numis said that there is plenty of opportu- JP Morgan Cazenove reiterates an “over- Bank of American Merrill Lynch (BoAML)
nity for positive change at Ladbrokes and it weight” rating of Allianz and said that it has upgraded its recommendation of
“We are a Silicon Valley company.
▲

AUTOMOTIVE
BY HARRY BANKS
ELECTRIC carmaker Tesla Motors has
raised the number of shares it will
sell in its initial public offering by 20
per cent, an early sign that investor
interest in the start-up is strong.
The increase yesterday, a day before
shares are expected to begin trading,
brings the number of shares being
offered to 13.3m from 11.1m, it said
in a regulatory filing.
Tesla maintained the price range of
the shares between $14 (£9.30) and
$16. Based on the midpoint of $15 a
share, the IPO could raise about
$200m (£132m).
The stock is set to trade on the
Nasdaq exchange today under the
symbol “TSLA”.
Tesla chief executive Elon Musk is
selling the IPO as a technology play
rather than a carmaker stock.
Closer to an Apple or Google than to a
GM or Ford in the way we operate the
company,” he said in a meeting with
potential investors last week.
The California-based company’s
public debut comes amid growing
interest in green technology, and as
major automakers are gearing up to
launch electric cars.
Tesla would be the first US car com-
pany to go public since Ford Motor
made its debut in 1956.
The company has yet to make a
profit, and does not expect to make
money until its Model S car starts sell-
ing in significant volume.
Tesla’s losses widened to $29.5m
(£19.5m) for last quarter.
Jeremy Anwyl, chief executive of
motoring website Edmunds.com,
said: “The deck is stacked against
them. They are not Google. They are
in manufacturing.”
believes the right jockey is in place to deliv-
er it. Numis gives the bookie a “buy” rating
and said that although the going will
undoubtedly be tough, it is confident that
the next six months will be characterised
by news of positive structural change.
NEWS | IN BRIEF
ATM dispenses only £5 notes
ATM operator Bank Machine has
launched a network of free cash
machines that only dispenses £5 notes.
The company has introduced 21 cash
machines across Britain following a pilot
at two machines in London. The machines
dispense 100,000 £5 notes a month.
estimates that Allianz’s dividend could rise
to €5.3 for 2010, 19 per cent ahead of con-
sensus. JP Morgan said this would give
Allianz a 6.4 per cent yield. JP Morgan said
that downside risk is that the 2010 com-
bined ratio fails to improve from 2009.
To appear in Best of the Brokers email your research to notes@cityam.com
Creston sells ad agency DLKW
Communications firm Creston is selling
its advertising agency DLKW Group to
the world’s No. 4 ad group Interpublic
Group of Cos (IPG) for £28m. For the
year ended 31 March, headline pre-tax
profit was £13.8m, compared with
£14.2m in the year-ago period.
Spanish oil group Repsol to “buy” following
an in-depth review. BoAML said that after
a five-year period that saw underlying pro-
duction contracting 25 per cent, Repsol has
now reached a turning point, with operat-
ing cash flows set to deliver.
Online retail expected to soar
Online retail is expected to defy general
sluggish growth for the overall retail sec-
tor, according to a survey. The PayPal
Online Retail Report, undertaken by
Experian, predicts the internet retail sec-
tor to grow by £8bn, a leap of 36 per
cent to £30.6bn, by the end of 2012.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Marion Dakers

Norton Rose
The law firm has made two new additions to its
dispute resolution practice. Paul Morris joins as
partner from Denton Wilde Sapte, where he
was a partner and joint head of dispute resolu-
tion. He is an experienced contentious corpo-
rate trustee practitioner. Also joining the firm
as partner is David McKie, who is moving from
DLA Piper where he was a partner and marine
and shipping dispute specialist. He has over 14
years’ experience in the London market.
London Square Mark Pain as chairman to join chief
The residential developer has hired executive Adam Lawrence. Pain has
been a non-executive director at
Northern Rock since the start of the
year, and is also the senior independent
director at Johnston Press. He has also
held senior management positions at
Barratt Developments and Abbey
National.
AllianceBernstein
The investment manager has expanded
its real estate group with the appoint-
ment of Paul Vosper. He will be based in
London and a member of the invest-
ment committee. Vosper joins the firm
from Morgan Stanley Investment
Management where he was most
recently the global chief operation offi-
cer for the real estate funds business,
and has more than 18 years of experi-
ence in the public and private real
estate markets, structured finance,
mortgages and corporate capital mar-
kets.
Moss Bros
The suit specialist has appointed Robin
Piggott as group finance director, with
effect from 28 June. He will take over
from Bryan Portman, who has been
interim chief financial officer since
April. Piggott most recently worked at
Alexon Group, which he joined in 1987
and took up the role of finance director
in 1995. He has also held financial roles
at Granada and Geest Industries.
Sacker & Partners
The pensions law firm has hired Emma
Martin as a solicitor. She qualified at
the City office of Jones Day, and joins
Sackers to specialise in pensions law.
Martin is a Cambridge University histo-
ry graduate and has experience in
advising on a variety of pension
schemes.

To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
ALISON CARNWATH IS READY.ARE YOU?
Alison Carnwath, Chair of Land Securities and Non-Executive Director of Barclays

Alison Carnwath is ready to judge entries to the inaugural CITY A.M. Awards –
the new financial business awards from the UK’s leading, free, business daily.
And, like CITY A.M. itself, all entries are free to companies, teams and
individuals working in the financial business. Entry is online and there are
15 company awards recognising corporate excellence and 6 awards
that celebrate the individual or team stars of the financial
community. Start thinking about your entries and nominations now.
The deadline for entries is 22 July 2010
For full details and helpful contact points please visit
the Awards website: www.CityAMAwards.com
For information on becoming a sponsor of the City A.M. Awards
contact Harry Owen: 020 7015 1241/ harry.owen@cityam.com
And save this date for your diary: Thursday 28 October 2010
at Grange St Paul's Hotel, London EC4 for the Awards Dinner.

headline sponsor

in association with

official venue partner Awards reception sponsor category sponsors

 24 News
The boss of the world’s number one
caterer is drawing up plans to grow
Compass chief
executive Richard
Cousins is ready to
expand after turning
the firm around
I
T IS NO exaggeration to say that
Compass and its chief executive
Richard Cousins has elevated the
term low-key into something of an
art form.
A modest three-storey red brick building
in Chertsey, Surrey, is home to the biggest
caterer in the world. Cousins, a 51-year-old
father of two who rarely gives interviews, is
the antithesis of the celebrity CEO: unas-
suming and quick to praise his team – and
you get the impression he really means it,
too.
Yet there is nothing modest about the
size of the business. It serves a large chunk
of the world at work and at play. Compass
operates in 50 countries and has 35,000
clients that range from the Bank of
England and Visa to the US Open and the
Wimbledon tennis championships. It
spends £3.5bn on food a year, which
includes 8m cans of coke. It employs
386,000 people worldwide, close to the size
of China’s standing army. And all of this
adds up to 4bn meals served each year.
Investors will also have been pleased by
the firm’s progress. Compass posted half-
year pre-tax profits up 14 per cent to
£462m last month, on sales up 2.6 per cent
to £7.1bn. Over the last four years it has
raised its operating margin – thanks to
what Cousins describes as a “relentless
focus on efficiency” – from 4.5 per cent to
seven per cent. And in May it raised its half-
year dividend 14 per cent to 5p, which
Cousins points out means that for the last
two-and-a-half years it has consistently
raised its payouts by double-digit figures.
A soft-spoken Cousins, who is sitting at
the head of the firm’s oval 20-seat meeting
table in its third-floor boardroom, says he
is pleased with growth in the first half of
the year, and expects the second half and
beyond to be even better.
He says: “We are happy with the shape of
the businesses as we emerge from reces-
sion. Global growth will be modest in the
short to medium term, but we are increas-
ingly excited about our growth prospects.
We have fixed the fundamentals during
the last four years. We have earned the
right to grow.”
Cousins sees plenty of room for organic
growth that the FTSE 100 business, with a
market capitalisation of £10bn, can take
advantage of to keep it ahead of rivals like
France’s Sodexo or Germany’s Supreme
Foodservice.
He argues that only half of the world’s
foodservice industry is outsourced, with
many organisations still providing their
own. He adds: “We expect that to grow, par-
ticularly in the healthcare and education
sectors, as governments around the world
take costs out of their budgets after the
financial crisis. Outsourcers like us can do
it cheaper.”
He says this is the lesson he takes from
chancellor George Osborne’s emergency
budget last week, or US President Barack
Obama’s healthcare reforms that were
passed in March.
He adds: “We will not see an increased
level of business tomorrow, it will take
some time for these policies to feed
through. But we are already seeing an
increased level of enquires about our serv-
ices from US hospitals.”
The firm sees education and healthcare
as fertile ground because in this market
only 30 per cent of the catering is out-
sourced, while in its core business and
industry market 70 per cent of foodser-
vices are handled by outside caterers.
Cousins still expects a lot of growth to
come from the US, which accounts for 43
per cent of the firm’s sales. He says: “The
US is still a vibrant economy which is capa-
ble of great structural growth.”
Cousins adds “apart from the Bric coun-
tries [Brazil, Russia, India and China]” he is
also looking to grow in Turkey, Mexico and
the Middle East. “We are excited about
double digit growth we see in those coun-
tries,” he adds. The UK accounts for only 13
per cent of the group’s sales.
Compass also wants to grow its support
services unit, which accounts for 12 per
cent of revenues. This is a little known
aspect of the business, but on some Royal
Dutch Shell oil rigs or in some BHP Billiton
mining camps Compass staff not only cook
the food but undertake a range of other
ancillary services.
Cousins says: “We also clean, do the
laundry and carry out light maintenance.
We are at a size where it makes sense for us
to do more in this area.”
Cousins says the firm is ready to return
to mergers and acquisitions after expand-
ing too quickly in the early part of the
decade and running into trouble.
He says: “From 2004 to 2007 the old
Compass perhaps did too much M&A. But
now we are very focused. We are looking at
small to medium sized deals, though we
will not rule out a big one if it comes
along. We are looking at food and support
services firms, and only in the countries
we are already in.”
When Cousins took the helm at
WORDS BY ROGER BAIRD
Compass chief Compass in March 2006 the business was
executive Richard taking punches at every turn. It had sacked
Cousins on the ground three senior executives in a bribery scan-
floor of the company’s dal over contracts to feed UN peacekeepers
headquarters in in Liberia. It cost £40m to settle the result-
Chertsey, Surrey ing lawsuits without admitting liability.
The business took the brunt of criticism
Picture: from the campaign led by celebrity chef
Micha Theiner Jamie Oliver over the quality of school
/City A.M. meals in the UK. The firm’s merger with
Granada in 2000 had brought it a number
of units and contracts that were not mak-
ing money. All this led to three profit
warnings in 2005 and the departure of its
chief executive Mike Bailey.
Cousins joined from British plaster-
board firm BPB where the year before as
chief executive he had got French rival
Saint Gobain to raise its offer four times
before recommending a £3.9bn sale to
shareholders. This deal had enhanced
“When I Cousins’ reputation in the City, but some
thought agreeing to take the Compass job
joined, was a good way to ruin it.
He says: “From looking at the company I
Compass had got a sense that the fundamentals of the
business had potential. It was a challenge,
come in for but it was doable.” He was right.
Careful analysis has been what Cousins’
criticism. But career has been built on. After a maths
degree at Sheffield University he began
now, without work in 1981 at Cadbury as a market
researcher. Three years later he joined
being cocky, British industrial conglomerate BTR as a
strategy planner, and in 1990 he took up a
we have got corporate planner’s post at BPB and
worked his way up to chief executive a
our decade later.
After studying Compass, Cousins
confidence thought the best course of action was to
take an axe and then a scalpel to the busi-
back.” ness. He pulled out of 50 countries where
its contracts were low margin and it did
CITYA.M. 29 JUNE 2010
“We have
fixed the
fundamentals
during the
last four
years. We
have earned
the right to
grow.”
ANALYSIS l Compass Group
p 535.50
28 Jun
560
540
520
500
480
29 Mar 20 Apr 11 May 1 Jun 21 Jun
not have the scale to compete effectively.
Between 2006 and 2007 it sold a number of
businesses, including European vending
unit Selecta and its SSP and Moto travel
concessions at the top of the market for
£3bn. “We were lucky with our timing,”
adds Cousins. The new chief executive
then began to look hard at his costs, but
not long after this came the recession.
He says: “In hindsight it was good for us.
It led us to push even harder to drive down
our costs.” In the full year to 2009 the busi-
ness cut costs by £161m. Staffing fell from
407,000 workers four years ago to 386,000
today. The business also boosted the
amount of fruit, salads and fresh vegeta-
bles it used, while trimming the size of
school menus to control costs.
Over the last three years the firm has
raised operating margin by 200 basis
points. Cousins says he plans to do this
again over the medium term though he
will not give a precise timeframe. “We are
determined, through a disciplined
approach to keep on taking costs out of the
business,” he says.
Investors are impressed. When he joined
the firm’s share price was 235p, now it is
538p, earning those shareholders who
trusted him a massive return. Cousins says:
“When I joined, Compass had come in for
a lot of criticism, some of it deserved. The
heads of people in the company were
down. But now, without being cocky, we
have got our confidence back.”
Compass seems intent on putting clear
blue water between itself and its rivals –
but one thing won’t change. The firm will
remain ultra low-key – which means that,
regrettably, many commentators will con-
tinue to fail to notice one of Britain Plc’s
true success stories. Investors are unlikely
to make that mistake.
 Investment | Contracts for Difference
25

US HOUSING
MARKET IN The age of austerity
NEED OF HELP
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
should not hurt stocks
Firms have firepower
S
TOCK indices have been positively corre-
lated to movements in euro-dollar for
such a long time that it is easy to forget to perform well for
that this wasn’t always the case. There is
growing evidence that this relationship is the rest of this year,
breaking down – equities are struggling to rally,
whether the euro is falling or rising. says Kathleen Brooks
This seems to be because investors are refo-
cusing on the US and betting that Europe’s
problems are neither containable nor unique. WEEK has passed since the emer-
After all, it isn’t only Europe that is having
problems with its banks. On Friday, the Federal
Deposit Insurance Corporation (FDIC) closed
another three regional banks, taking the total
for this year to 86. It closed down 140 in
A gency Budget set the UK on a path of
fairly aggressive fiscal consolida-
tion. Public spending will be cut in
real terms, VAT is scheduled to rise and
new rules are in place to ensure that the
2009; 25 in 2008 and three in 2007. The FDIC debt-to-GDP ratio will fall back to more sus-
has 775 banks on its problem list – around 10 tainable levels in the coming years.
per cent of the industry. The US regional banks So in an age of austerity where should
are suffering for the same reason as the investors park their cash? Analysts at UBS
Spanish cajas – the fall-out from the collapse in have reiterated their positive view on UK
the countries’ property markets. equities, and now expect the FTSE 100 to
This is why recent US housing data is so rise to 6,250 by the end of this year, a 20
worrying. Following bigger-than-expected falls per cent increase from current levels. The
in housing starts and building permits, last main gist of their argument is that
week saw the release of grim new and existing although the measures to repair the UK’s
home sales figures. The weak numbers coincid- fiscal woes are steep, they will not push the
ed with the expiry of the homebuyer tax credit UK’s economy back into recession.
in April, which suggests that the market will In fact, the spending cuts and tax
now double-dip without more stimulus. increases announced by George Osborne
Real estate is crucial to the US’s financial last week could even boost stocks. Firstly,
health. Not only is a house the most important the Budget reduces the chances of an inter- The Budget could boost
asset for most people, but it also has been a est rate hike later this year, which is good UK equities
source of growth in consumer spending thanks news for businesses as it keeps debt financ- Picture: REUTERS
to rising prices and equity withdrawal. ing costs low. This should also keep a lid on
Alongside this, housing provides employment sterling appreciation, which is welcome
through construction and DIY and boosts sales news for Britain’s exporters.
of household appliances and furnishings. Secondly, other measures included in 100 is 10.3 for 2010 and 8.5 for 2011. This of the largest companies on the FTSE 100,
At an institutional level, the effects of a sec- the Budget, like the cut in corporation tax compares with a long-run average of 13 even after losing half its value since the
ond property slump won’t be limited to regional from 28 per cent to 24 per cent, received a times earnings, which suggests that the Gulf of Mexico oil spill. Although costs
banks. Finances at the individual state and local warm welcome from the business commu- FTSE 100 looks cheap relative to history. relating to the clean-up continue to spiral,
government level are also grim as plummeting nity. Beverage companies like Diageo, the It’s all very good to look cheap, but is there are signs that some of the pressure
tax revenues have taken their toll. With makers of Guiness and Baileys, and C&C, there real value? By far the most com- on the company has started to ease after
Congress balking at Barack Obama’s plea for a the Irish cider maker, can breath a sigh of pelling argument for FTSE appreciation President Obama told David Cameron that
$50bn lifeline to state and local government, relief that alcohol duty was not increased. this year is the geographic dispersion of BP should remain a strong and stable com-
it’s likely to get a whole lot worse. And even retailers have been given six the index’s earnings. Nearly three quarters pany. Whether that is enough to save the
months to prepare for the 2.5 per cent of earnings, excluding financials, come firm remains to be seen.
increase in VAT, which will not be imple- from overseas: 26 percent coming from So while bond yields and cash rates
mented until 4 January next year. Europe, 22 per cent from North America remain meagre, there is a strong argu-
And it’s not just a supportive macro and, crucially, 26 per cent coming from ment for contract for difference traders to
environment that will boost stocks – valua- the rest of the world, led by fast-growing invest in equities, especially in an environ-
tions are also looking attractive. UBS’s cur- emerging markets nations. ment where overall returns could be hard
rent price-to-earnings ratio for the FTSE But what about BP? The oil giant is one to come by in the coming years.

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CITYA.M. 29 JUNE 2010 Investment | Contracts for Difference 27

Bullish outlook
this season for
US tech stocks
With US earnings only two weeks away, it is
time to start researching, says Jessica Mead

W
HEN it comes to reporting earn-
ings, companies appear to have
had a relatively easy time of it.
For more than a year now, the
vast majority of firms have beaten ana-
lysts’ consensus estimates, sending their
share prices shooting skyward. All they
have needed to do to win the market’s
favour is to report figures that are less bad
than feared rather than demonstrate any
underlying success.
With Alcoa kicking off the US earnings
season on 12 July after the market close,
contracts for difference (CFDs) traders’
minds are once again turning towards the
expectations for second quarter results.
Will American firms be able to surpass
forecasts once again?
Surpass no, but match yes, believes Mary
Chris Gay, senior vice-president and a port-
folio manager at Legg Mason Capital
Management, an asset management firm.
“With an extremely large number of com-
panies having beaten expectations in the
past three quarters, it is clear that it is not
sustainable. But we still believe that earn-
ings will be coming in either in line or
modestly better than expected for most of
the industries.”
She is not the only one expecting a
decent showing from US companies this
quarter. James Abate, manager of the
PSigma American Growth Fund, believes
the US market has hit its trough and will
not slump further this year. He predicts a
strong reporting season for earnings,
ahead of the consensus. “The US is stand-
ing head and shoulders above other devel-
oped markets, and businesses will benefit
from this relative strength. Now things
are starting to turn around, or at least sta-
bilise, companies will be able to take
advantage of this,” he explains.
But where should CFD traders look for Microsoft is liked
outperformance? There is, at least, some within the tech
consensus with technology and healthcare sector
in general favour. Charles Schwab’s Kully
Samra explains that as economic growth
starts to mature, companies with strong
balance sheets, dividend payments and sta- dynamics. Legg Mason’s Gay points to ANALYSIS l Dow Jones Technology Titans 30 Index
ble revenues will appear attractive – all Microsoft, Texas Instruments and Cisco as
offered by technology and healthcare. among the largest holdings of her fund. Source: Bloomberg
Technology stocks are also looking attrac- So should CFD traders be looking to 575
tive from a valuations perspective. Names trade US sectors or should they be stock-
in the sector have seen their stocks decline picking? While it’s easier to take a punt on
as concerns weigh on the market, says a sector, Gay says that in the early stages of 550
PSigma’s James Abate, adding that he has a bull market, the stock picker is at an
“reloaded” on the back of recent weakness. advantage: “There is a bifurcation between 525
He likes both Apple and Google, two companies that can actually grow and
companies that in his opinion are those that happen to be in a strong-per-
deservedly trading at a premium to the forming sector.” 500
market, as well as Micron Technology and Consequently, it might well be worth
SanDisk, which are benefiting from con- using the next two weeks to research your
tinued favourable supply and demand stocks and place your trades accordingly. Feb Mar Apr May Jun

CFD ANALYST PICKS

TECHNICAL STRATEGIST TECHNICAL STRATEGIST TECHNICAL ANALYST
DAVID RODRIGUEZ JOHN KICKLIGHTER ILYA SPIVAK

My pick: Stay short the S&P 500 on a hold of 1,130
Expertise: Algorithmic trading
Average time frame of trades: 2-10 weeks
I have remained bearish on the S&P 500 for quite some time now
and I remain short. Unfortunately I added to the position below
1,050, which did not work well as the index rebounded. I have
since covered half the position at a loss, but I am willing to hold
the remainder as long as the index remains below 1,130. I feel con-
fident that a deterioration in risk sentiment will produce further
S&P declines in the coming months.
My pick: Remain long 10-year gilts and remain short US dollar-Swiss franc
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
Risk appetite has cooled over the past week and my long position in
the Dow has fallen back to my stop-loss level, which has knocked me
out. Before I commit to any new trends, I need to see a clear theme in
sentiment. As for my existing positions – long gilts from 121.25 and
short US dollar-Swiss franc from SFr1.14 – I will hold on to both of
these positions to see how the trends develop. My first target on my
long gilt trade will be set at 123.
My pick: Short gold (pending market movement)
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
Daily charts show that gold prices have formed a bearish rising wedge
pattern below resistance at $1,260, with the downward bias reinforced
by clear negative divergence on 14-day relative strength studies. If
resistance levels at $1,240 turn to support, this will be confirmation of a
breakdown in the gold price. I will look for a daily close below this level
before I go short, initially targeting $1,175. If triggered, I will put in
place a stop-loss at $1,264.70, the session high reached on 21 June.
 28 Markets & Investments CITYA.M. 29 JUNE 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .282.30* +2.40 314.80 216.75 COLT Group . . . . . . . . . . . . . . . .131.00 –0.50 144.20 105.25 ITV . . . . . . . . . . . . . . . . . . . . . . . .52.90 –0.60 71.75 31.75 Schroders . . . . . . . . . . . . . . . . .1271.00 –4.00 1450.00 764.00
3i Infrastructure . . . . . . . . . . . . . 114.20* +1.40 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .536.00 –0.50 574.50 307.75 Jardine Lloyd Thompson. . . . . . .543.50 +3.50 604.50 398.00 Schroders N/V. . . . . . . . . . . . . .1046.00 –2.00 1185.00 643.50
A.B. Foods . . . . . . . . . . . . . . . . .986.50* +0.50 1045.00 752.00 Cookson . . . . . . . . . . . . . . . . . . .427.80 –1.60 616.00 220.00 Johnson Matthey . . . . . . . . . . .1570.00* +16.00 1814.00 1108.00 Scot. & Sthrn Energy. . . . . . . . . 1135.00 +15.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .132.30 +0.20 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . .1035.00 +25.00 1047.00 524.00 Kazakhmys . . . . . . . . . . . . . . . .1087.00 +20.00 1634.00 574.50 Scottish Mortgage. . . . . . . . . . . .571.50* +11.50 623.50 376.00
Admiral. . . . . . . . . . . . . . . . . . .1413.00 +11.00 1441.00 852.00 CSR . . . . . . . . . . . . . . . . . . . . . .386.70 –0.70 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .122.40 +5.90 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .264.70 +1.50 403.10 250.00
Aegis . . . . . . . . . . . . . . . . . . . . . 111.00* +0.40 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .458.10* –0.80 539.00 268.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .219.80 –0.60 255.00 173.00
Afren . . . . . . . . . . . . . . . . . . . . . .89.00 — 111.00 47.25 Dana Petroleum . . . . . . . . . . . . 1176.00 –1.00 1549.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .135.80 –2.10 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .623.50 +3.00 656.50 394.30
African Barr Gold . . . . . . . . . . . .638.00 +5.50 685.00 520.50 Davis Service . . . . . . . . . . . . . . .373.50 +0.50 442.30 310.00 Lancashire Hldgs . . . . . . . . . . . .497.20 +0.70 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1240.00* –11.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1433.00 –2.00 1496.00 492.50 De La Rue . . . . . . . . . . . . . . . . . .954.50 –4.00 1021.00 808.50 Land Securities . . . . . . . . . . . . . .586.00* +5.00 743.50 415.25 Shaftesbury . . . . . . . . . . . . . . . .369.50* +0.60 426.50 285.25
Alliance Trust . . . . . . . . . . . . . . .314.30 +1.30 352.70 260.25 Debenhams . . . . . . . . . . . . . . . . .56.85 –0.65 91.95 53.75 Legal & General . . . . . . . . . . . . . .81.05 +0.25 94.40 49.37 Shire. . . . . . . . . . . . . . . . . . . . .1413.00 –3.00 1526.00 816.00
AMEC . . . . . . . . . . . . . . . . . . . . .852.50* +10.00 891.00 603.50 Derwent London . . . . . . . . . . . .1292.00 –6.00 1490.00 844.00 Lloyds Banking Gp . . . . . . . . . . . .55.41 +1.21 75.58 40.42 SIG . . . . . . . . . . . . . . . . . . . . . . . 110.80 +0.70 146.60 86.75
Amlin . . . . . . . . . . . . . . . . . . . . .384.90 +2.60 428.50 291.00 Dexion Absolute . . . . . . . . . . . . .138.30 –0.70 148.00 115.50 Logica . . . . . . . . . . . . . . . . . . . .109.00 –2.70 149.10 74.50 Smith & Nephew . . . . . . . . . . . . .638.00 –4.50 700.50 435.25
Anglo American . . . . . . . . . . . .2530.50 +55.50 3015.50 1557.50 Diageo . . . . . . . . . . . . . . . . . . .1064.00 –6.00 1176.00 857.00 London Stk Exchange . . . . . . . . .602.00 — 949.50 588.00 Smiths . . . . . . . . . . . . . . . . . . . 1111.00 +11.00 1186.00 677.50
Antofagasta . . . . . . . . . . . . . . . .848.00 +21.00 1100.00 561.00 Dimension Data . . . . . . . . . . . . .100.30 +1.30 105.00 54.75 Lonmin . . . . . . . . . . . . . . . . . . .1546.00 +23.00 2198.00 950.00 SOCO Intl . . . . . . . . . . . . . . . . . .406.30 +1.50 444.60 380.60
Aquarius Platinum . . . . . . . . . . .366.40 +6.30 490.00 172.75 Domino’s Pizza . . . . . . . . . . . . . .374.30 –1.30 387.80 200.00 Man . . . . . . . . . . . . . . . . . . . . . .249.70 +3.10 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .787.50* +9.00 928.00 512.50
ARM Holdings . . . . . . . . . . . . . . .284.60 +3.50 362.40 116.00 Drax . . . . . . . . . . . . . . . . . . . . . .381.70 +0.40 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .340.20* +0.20 412.70 302.25 Spirax-Sarco Eng . . . . . . . . . . .1384.00 +20.00 1591.00 808.00
Arriva . . . . . . . . . . . . . . . . . . . . .765.50 +0.50 782.50 378.50 DSG Intl . . . . . . . . . . . . . . . . . . . .26.40 +0.22 39.75 19.25 Meggitt . . . . . . . . . . . . . . . . . . . .318.70 +8.70 331.00 151.75 Spirent Comms . . . . . . . . . . . . . . 111.20 +3.60 127.80 54.50
Ashmore . . . . . . . . . . . . . . . . . . .253.00 +2.00 311.20 183.25 Dunelm . . . . . . . . . . . . . . . . . . . .330.00 +2.20 438.40 202.00 Melrose . . . . . . . . . . . . . . . . . . .219.60 –2.10 251.50 90.00
Astrazeneca . . . . . . . . . . . . . . .2961.50 –4.50 3136.00 2631.50 Easyjet . . . . . . . . . . . . . . . . . . . .409.00 +3.90 499.90 260.00 Mercantile IT . . . . . . . . . . . . . . . .896.50 +2.50 1002.00 726.00 Sports Direct Intl . . . . . . . . . . . . .106.20 –0.30 134.00 72.50
Atkins(Ws) . . . . . . . . . . . . . . . . .684.50 +4.50 747.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .390.70* +6.00 412.40 298.50 Michael Page Intl. . . . . . . . . . . . .391.40 –1.80 461.50 218.50 SSL Intl . . . . . . . . . . . . . . . . . . . .815.50 +6.00 893.50 506.00
Autonomy Corp . . . . . . . . . . . .1870.00 –3.00 2012.00 1121.00 Electrocomponents . . . . . . . . . . .224.70* +2.20 245.00 134.25 Micro Focus . . . . . . . . . . . . . . . .425.00 –11.30 550.00 300.90 St James’s Place . . . . . . . . . . . . .218.20 –0.40 296.90 172.25
Aveva . . . . . . . . . . . . . . . . . . . . 1175.00* +7.00 1237.00 666.50 EnQuest . . . . . . . . . . . . . . . . . . .102.90 –1.60 112.70 87.35 Millen & Copthorne . . . . . . . . . . .422.20 –1.10 496.30 227.75 Stagecoach. . . . . . . . . . . . . . . . .190.20 –4.10 204.90 123.25
Aviva . . . . . . . . . . . . . . . . . . . . .330.50 +5.40 474.00 274.75 Essar Energy . . . . . . . . . . . . . . .460.00 +9.30 475.00 358.50 Misys . . . . . . . . . . . . . . . . . . . . .243.50 –0.10 281.70 165.25 Standard Chartered . . . . . . . . . .1710.00 –32.00 1847.00 1115.00
Babcock International . . . . . . . . .600.50* +13.00 660.50 448.50 Eurasian Nat Res . . . . . . . . . . . .948.00 +17.50 1276.00 632.00 Mitchells & Butlers . . . . . . . . . . .290.60 –1.30 343.90 228.30 Standard Life . . . . . . . . . . . . . . .180.10 +1.10 237.00 172.60
BAE Systems . . . . . . . . . . . . . . .319.00 — 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .604.50* +5.00 630.00 197.25 MITIE . . . . . . . . . . . . . . . . . . . . .212.20* +0.90 281.70 198.70 SuperGrp . . . . . . . . . . . . . . . . . .733.00 +8.00 736.00 499.00
Balfour Beatty . . . . . . . . . . . . . . .240.50* +0.60 328.85 237.70 Experian . . . . . . . . . . . . . . . . . . .614.50* +4.00 664.50 434.00 Mondi . . . . . . . . . . . . . . . . . . . . .402.00 +9.50 488.00 187.50 TalkTalk . . . . . . . . . . . . . . . . . . .125.50 +2.00 147.10 106.60
Barclays . . . . . . . . . . . . . . . . . . .285.35 +4.15 394.25 255.00 F&C Comm Prop . . . . . . . . . . . . . .93.70* +0.70 96.80 73.50 Monks Inv Tst . . . . . . . . . . . . . . .290.00 +2.00 321.20 222.00 Talvivaara Mining . . . . . . . . . . . .373.00 –2.00 501.50 319.00
Barratt Development . . . . . . . . . .102.90 –1.60 193.31 93.70 Ferrexpo . . . . . . . . . . . . . . . . . . .275.40 +3.80 396.20 112.00 Morrison Wm . . . . . . . . . . . . . . .272.00 +0.30 306.30 234.25 Tate & Lyle . . . . . . . . . . . . . . . . .452.60* –1.00 509.00 284.75
BBA Aviation . . . . . . . . . . . . . . .192.00 +0.80 220.00 105.00 FirstGroup . . . . . . . . . . . . . . . . .389.80 +2.20 448.80 322.75 Murray Intl Tst . . . . . . . . . . . . . . .839.50 +18.50 893.50 593.50 Taylor Wimpey . . . . . . . . . . . . . . .29.70 –0.76 54.90 27.40
Beazley. . . . . . . . . . . . . . . . . . . . 118.70 –0.60 124.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .267.80 +1.60 297.20 210.25 National Express. . . . . . . . . . . . .227.00 –2.40 256.80 135.86 Telecity . . . . . . . . . . . . . . . . . . . .405.70 +6.10 455.00 289.25
Bellway. . . . . . . . . . . . . . . . . . . .654.50* +2.00 927.50 591.50 Fresnillo . . . . . . . . . . . . . . . . . .1052.00 +49.00 1115.00 438.00 National Grid . . . . . . . . . . . . . . .502.00* +3.00 607.65 469.37
Berkeley . . . . . . . . . . . . . . . . . . .787.00 –14.00 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .280.40 –0.40 285.70 203.75 Next . . . . . . . . . . . . . . . . . . . . .2105.00* –13.00 2360.00 1450.00 Templeton Emrg Mkts . . . . . . . . .543.50* +5.50 598.00 349.50
BG . . . . . . . . . . . . . . . . . . . . . .1045.50 –4.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .467.50 +14.50 484.00 370.00 Northumbrian Water . . . . . . . . . .308.10 –0.40 312.00 219.90 Tesco . . . . . . . . . . . . . . . . . . . . .393.85* –4.80 454.90 347.40
BHP Billiton . . . . . . . . . . . . . . .1881.50 +14.50 2346.00 1274.50 GKN . . . . . . . . . . . . . . . . . . . . . .122.60 +1.50 155.00 71.75 Old Mutual . . . . . . . . . . . . . . . . .108.40* +1.00 127.20 74.60 Thomas Cook . . . . . . . . . . . . . . .189.00 +1.00 277.20 187.40
BlackRock Mining . . . . . . . . . . . .571.50 +11.00 654.50 346.00 GlaxoSmithKline . . . . . . . . . . . . 1143.50* –1.50 1347.00 1058.00 Partygaming . . . . . . . . . . . . . . . .242.50 –8.50 339.70 213.30 Tomkins . . . . . . . . . . . . . . . . . . .240.00 +3.30 261.10 141.75
Booker . . . . . . . . . . . . . . . . . . . . .40.85* –0.15 49.50 33.00 Great Portland Estates . . . . . . . .293.70 +2.60 332.10 203.75 Pearson . . . . . . . . . . . . . . . . . . .921.00 +0.50 1069.00 574.00 Travis Perkins . . . . . . . . . . . . . . .779.00 –6.50 915.00 504.00
BP . . . . . . . . . . . . . . . . . . . . . . .308.25 +3.65 658.20 296.00 Greene King . . . . . . . . . . . . . . . .402.00 +3.00 504.00 372.50 Pennon . . . . . . . . . . . . . . . . . . . .555.50 +1.00 567.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .222.40 +4.80 313.90 213.80
Brit Insurance . . . . . . . . . . . . . . .902.00* +7.00 970.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .527.00 +2.00 562.50 306.25 Persimmon . . . . . . . . . . . . . . . . .386.80 +6.30 534.50 343.00 Tullett Prebon . . . . . . . . . . . . . . .318.10 –2.50 436.20 261.20
British Airways . . . . . . . . . . . . . .209.40 +2.20 255.80 117.30 Halma . . . . . . . . . . . . . . . . . . . . .280.80 +4.20 284.90 184.00 Petrofac . . . . . . . . . . . . . . . . . .1233.00 +13.00 1294.00 627.50 Tullow Oil . . . . . . . . . . . . . . . . .1076.00 +9.00 1375.00 834.50
British Amer. Tob . . . . . . . . . . .2146.50 +17.50 2335.50 1664.00 Hammerson . . . . . . . . . . . . . . . .354.50 +1.70 460.30 277.00 Petropavlovsk . . . . . . . . . . . . . .1259.00 +25.00 1370.00 516.50 UK Commercial Prop. . . . . . . . . . .79.50 +0.85 84.90 62.25
British Empire Tst . . . . . . . . . . . .421.80 +2.90 467.90 338.50 Hargreaves Lansdown . . . . . . . .341.50 +3.00 387.00 197.25 Premier Farnell . . . . . . . . . . . . . .228.90 –1.10 252.60 122.25 Ultra Electronics . . . . . . . . . . . .1580.00 +4.00 1678.00 1079.00
British Land . . . . . . . . . . . . . . . .446.20 +6.00 532.00 353.00 Hays . . . . . . . . . . . . . . . . . . . . . . .95.00 –0.75 119.00 80.00 Premier Oil . . . . . . . . . . . . . . . .1266.00 +84.00 1431.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1820.00 +8.00 2024.00 1419.00
Britvic. . . . . . . . . . . . . . . . . . . . .478.10* +2.00 497.70 270.50 Henderson . . . . . . . . . . . . . . . . .124.00 +0.50 157.80 87.25 Provident Financial . . . . . . . . . . .851.50 +0.50 986.00 763.00 United Utilities . . . . . . . . . . . . . .526.50* –1.50 575.00 429.00
Brown(N.) . . . . . . . . . . . . . . . . . .268.90 +2.70 284.30 204.25 Heritage Oil. . . . . . . . . . . . . . . . .413.00 +3.00 587.00 409.20 Prudential . . . . . . . . . . . . . . . . . .537.50 +7.50 665.00 350.25
BSkyB . . . . . . . . . . . . . . . . . . . .705.00 +4.00 732.00 435.75 Hikma Pharma . . . . . . . . . . . . . .710.00 +4.00 730.00 430.00 PZ Cussons . . . . . . . . . . . . . . . .329.90 +3.80 332.30 194.75 Utd Business Media . . . . . . . . . .505.00 — 579.50 364.75
BT . . . . . . . . . . . . . . . . . . . . . . .131.50 +0.80 151.00 99.50 Hiscox . . . . . . . . . . . . . . . . . . . .341.10 — 369.30 279.50 Qinetiq . . . . . . . . . . . . . . . . . . . . 118.50 +1.50 179.10 113.90 Vedanta Resources . . . . . . . . . .2297.00 +49.00 2967.00 1264.00
Bunzl . . . . . . . . . . . . . . . . . . . . .689.00* –0.50 784.50 498.25 Hochschild Mining . . . . . . . . . . .317.10 +5.40 370.60 220.00 Randgold Resources. . . . . . . . .6560.00 +80.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1129.00* +3.00 1193.00 537.00
Burberry . . . . . . . . . . . . . . . . . . .795.00 +10.50 815.50 396.75 Home Retail . . . . . . . . . . . . . . . .222.50* –2.50 336.50 221.30 Reckitt Benckiser . . . . . . . . . . .3122.00 –4.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .146.00* +1.95 153.80 111.90
Cable & Wire Comms . . . . . . . . . .58.75* –1.05 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2033.00 –6.00 2190.00 1336.00 Reed Elsevier . . . . . . . . . . . . . . .505.50 +5.50 548.00 403.75 VT . . . . . . . . . . . . . . . . . . . . . . .781.00 +11.00 782.50 416.00
Cable & Wire Wwide . . . . . . . . . . .90.30* –0.40 94.80 68.60 HSBC Hldgs . . . . . . . . . . . . . . . .639.00* –2.80 766.80 487.00 Regus . . . . . . . . . . . . . . . . . . . . . .73.20 –1.80 125.50 61.00 Weir . . . . . . . . . . . . . . . . . . . . . 1104.00 +23.00 1183.00 437.50
Cairn Energy. . . . . . . . . . . . . . . .430.50 +8.10 448.60 306.80 Hunting . . . . . . . . . . . . . . . . . . .453.60 +3.50 659.50 377.00 Rentokil Initial . . . . . . . . . . . . . . . 114.10 –1.30 140.20 82.25 WH Smith . . . . . . . . . . . . . . . . . .414.90 –3.20 551.00 407.70
Caledonia Invs . . . . . . . . . . . . .1578.00 +5.00 1759.00 1495.00 ICAP . . . . . . . . . . . . . . . . . . . . . .412.70 –2.00 478.30 291.70 Resolution . . . . . . . . . . . . . . . . . .60.30† — 99.15 58.45 Whitbread . . . . . . . . . . . . . . . . .1496.00* +14.00 1645.00 778.50
Capita . . . . . . . . . . . . . . . . . . . . .767.00 –9.00 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .435.60 +6.00 458.20 261.25 Rexam . . . . . . . . . . . . . . . . . . . .312.00 –3.10 331.20 222.50 William Hill . . . . . . . . . . . . . . . . .179.10 –0.80 217.80 160.50
Capital & Counties . . . . . . . . . . .106.30 +1.00 125.40 99.60 Imagination Tech Gp . . . . . . . . . .284.20 +11.20 311.60 130.00 Rightmove . . . . . . . . . . . . . . . . .654.00 –7.50 729.00 334.00 Witan Inv Tst . . . . . . . . . . . . . . . .429.00 +1.00 487.00 329.50
Capital Shopping Centres . . . . . .324.60 +3.10 580.00 300.20 IMI . . . . . . . . . . . . . . . . . . . . . . .714.50 +3.00 756.50 275.25 Rio Tinto . . . . . . . . . . . . . . . . . .3256.00 +67.00 4104.00 1822.00 Wolseley . . . . . . . . . . . . . . . . . .1442.00 +8.00 1742.00 1026.00
Carillion . . . . . . . . . . . . . . . . . . .319.70 +0.40 361.90 244.00 Imperial Tobacco. . . . . . . . . . . .1899.00 +9.00 2159.00 1547.00 RIT Capital Partners . . . . . . . . . 1170.00 +8.00 1200.00 877.00
Carnival . . . . . . . . . . . . . . . . . .2287.00 –15.00 2937.00 1574.00 Inchcape. . . . . . . . . . . . . . . . . . .265.00 –2.50 347.00 253.20 Rolls Royce . . . . . . . . . . . . . . . .583.50* +1.50 631.50 346.50 Wood Group (John). . . . . . . . . . .321.10 –0.80 411.70 231.25
Catlin . . . . . . . . . . . . . . . . . . . . .355.60 +1.80 380.50 284.75 Informa . . . . . . . . . . . . . . . . . . . .369.00 –1.90 439.40 216.00 Rotork . . . . . . . . . . . . . . . . . . .1320.00* +15.00 1482.00 779.50 WPP . . . . . . . . . . . . . . . . . . . . . .657.50 –7.00 744.00 380.50
Centamin Egypt . . . . . . . . . . . . .166.80 +2.80 174.75 77.86 Inmarsat . . . . . . . . . . . . . . . . . . .752.50 +4.50 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .43.45 –1.01 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . . .967.40 +10.40 1344.50 555.10
Centrica . . . . . . . . . . . . . . . . . . .306.00 +0.30 320.00 212.50 Intercontl Hotels . . . . . . . . . . . . 1160.00 +22.00 1244.00 584.50 Royal Dutch Shell A . . . . . . . . .1769.00 +16.50 2068.50 1431.00 Yell Group. . . . . . . . . . . . . . . . . . .26.56 –0.49 86.00 21.00
Charter Intl . . . . . . . . . . . . . . . . .670.00 –3.50 855.50 406.50 Intermediate Capital . . . . . . . . . .256.10 –0.90 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1691.50 +17.00 1997.50 1437.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .3053.00 +43.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1495.00 +15.00 1576.00 1024.00 RSA Insurance . . . . . . . . . . . . . .121.40 +0.90 142.00 113.10
Chloride Group . . . . . . . . . . . . . .348.50 +0.50 350.00 129.00 Intl Power . . . . . . . . . . . . . . . . . .306.90 +0.30 354.00 231.00 SABMiller . . . . . . . . . . . . . . . . .1972.00 +10.50 2090.00 1210.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .713.00 +5.50 806.50 623.00 Invensys . . . . . . . . . . . . . . . . . . .263.00* –0.30 350.30 212.25 Sage . . . . . . . . . . . . . . . . . . . . . .236.20 –1.30 260.50 167.20
Cobham . . . . . . . . . . . . . . . . . . .221.90* –0.70 278.60 171.40 Investec . . . . . . . . . . . . . . . . . . .473.40 +4.40 565.00 323.75 Sainsbury(J) . . . . . . . . . . . . . . . .326.60* –1.60 373.00 307.60 www.interactivedata.com

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FTSE losing streak ends after mining Wall St lit up by tobacco

gains and improved economic outlook but energy stocks darken
THELONDON
the least,” said Jimmy Yates, head of
equities at CMC Markets.
“Investors have looked for value in
on the balance between reviving eco-
nomic growth and cutting budget
deficits at weekend talks in Toronto,
THENEW YORK attempt by the US government to
wrest billions of dollars in damages
from the tobacco industry. Altria

REPORT mining stocks after their recent

weakness, and while there were no
real shocks at the G20 meeting, the
leaving room for each country to
move at its own pace and adopt “dif-
ferentiated and tailored” policies.
REPORT Group gained 3.3 per cent to $20.34
and Reynolds American jumped 4.1
per cent to $53.45. The Dow Jones
countries appeared to put on a unit- Integrated oils were higher as a tobacco index rose 1.8 per cent.

B U
ritain’s leading shares rose yes- ed front on combating deficit prob- sector, boosted by a 1.2 per cent gain S stocks ended slightly lower The spotlight, however, was on the
terday as gains for miners and lems, providing a glint of optimism from BP, rebounding slightly from yesterday as gains in consumer- consumer as investors and analysts
improved sentiment over glob- that the global recovery won’t be sti- the 14-year low hit on Friday. related stocks, including tobac- waited for further evidence that con-
al economic recovery more fled.” co shares, were offset by losses sumer spending would show greater
than offset weakness in bank stocks, “Mining stocks gained having fall- ANALYSIS l FTSE in the energy sector. strength and propel broad growth.
after Standard Chartered results en as much as 9 per cent over the Shares of Coca Cola and Procter & The Dow Jones industrial average
6,000
lagged expectations. last four days, and along with base 5,071.68 Gamble were two of the Dow Jones dropped 5.29 points, or 0.05 per cent,
The FTSE 100 closed up 25.21 metal prices firming as copper 5,800 28 Jun Industrial Average’s best perform- to 10,138.52. The Standard & Poor’s
points, or 0.5 per cent, at 5,071.68, climbed towards its highest level in 5,600
ers. – up 1.6 per cent to $51.08 and 1.4 500 Index slipped 2.19 points, or 0.20
snapping a four-session losing almost a month yesterday. per cent to $60.62 respectively. per cent, to 1,074.57. The Nasdaq
streak. Fresnillo rose 4.9 per cent, topping 5,400 Consumer shares rose after the gov- Composite Index shed 2.83 points, or
Index moves were accentuated as the risers chart, while Antofagasta 5,200
ernment said personal spending rose 0.13 p cent, to 2,220.65.00.
volumes remained light, with the and Anglo American rose 2.5 and 2.2 moderately in May, exceeding expec- About 7.08bn shares traded on the
index trading just 69 per cent of its percent, respectively. 5,000 tations, after being flat in April. New York Stock Exchange, the
average 90 day volume. Leaders of the Group of 20 leading Tobacco companies rallied after the American Stock Exchange and
“Trading has been lacklustre to say countries papered over differences 29 Mar 29 Apr 1 Jun US Supreme Court rejected an Nasdaq, the least since April 5.
CITYA.M. 29 JUNE 2010
WORDS BY
TIMOTHY BARBER Lifestyle | Restaurant 29

Tastes of the garden in St James’s

The Avenue is a light
and airy place for a
business lunch in a
part of London better
known for fustiness

The Avenue
7-9 St James’s Street, SW1A 1EE
www.danddlondon.com
FOOD hhhii
SERVICE hhhhi
ATMOSPHERE hhiii
Cost per person without wine: £40

H
UGE place, The Avenue. It has sat
near the bottom of St James’s Street
since the Nineties when its spacious
minimalism was quite the thing, if
hardly what you’d expect to find just off
fusty old Pall Mall. Earlier this year it was
given a paint job and re-launched with a
kitchen run by Mikko Kataja, a young
Finnish chef who happens to specialise in
modern British cooking.
It’s got some illustrious company: inti-
mate restaurant of renown L’Oranger is
one door down, while Marco Pierre
White’s austere fish place Wheeler’s sits
darkly across the road. The Avenue is nei-
ther intimate nor austere – it’s mostly
white. From a street-side wall that’s all
glass it stretches far back with high white
ceilings, shiny white floors, and tables
with white cloths as far as the eye can see.
Even though there are maroon walls
with huge, splattery paintings by an artist
one hopes has an alternative day job, it’s
an airy, unassuming place – not ideal for a ling pig with liquorice or fish and chips The Avenue’s has an upon helping little. A bowlful of soft cour-
romantic dinner but good for a business
lunch or a pre-theatre meal (for which the
served in paper. airy, minimalist
ambience.
gette slices was laced in a butter so strong-
ly and sweetly lemon-infused it snuffed
FOOD & BOOZE
£19.50 two course or £24.50 three course ARTFUL PRESENTATION out everything else. NEWS
set menus seem pretty good value). With Kataja has previously worked at Mirabelle Of the desserts, raspberry scones with
this many tables you’re unlikely to have (Marco Pierre White’s old, now defunct clotted cream ice cream held a certain TIMOTHY BARBER
trouble bagging one at the last minute if flagship) and more recently the well- cheeky allure, but instead I went for a
you find yourself in the area and hungry, regarded Launceston Place, and our “rose set cream” – pana cotta infused with ANTUNES SETS UP SHOP ON SOUTH BANK
but that also means the restaurant needs starters reflected this kind of quality. A roses – with strawberries and sorbet. I French chef Joel Antunes built a laudable reputa-
to get serious crowds in to create any kind chilled cucumber soup that had crab meat can’t say I could taste the roses, but it was tion for himself back in the Eighties and Nineties
of buzz. I visited on a Friday night and it lurking within was as fresh as a spring a beautiful pana cotta, and classy straw- working around France, Asia and the UK before
was eerily quiet. morning, the crab adding earthy depth to berry sorbet. A quartet of well-chosen launching Les Saveurs in Mayfair, where he
The menu is simple enough and rather the cucumber’s cleansing sparkle. A British cheeses served with crackers kept picked up a Michelin star. After that he went to
enticing, with a seasonal sensibility and creamy pea risotto with smoked bacon, a my friend happy. the States, but his latest venture is back here in
lack of affectation that suits the venue’s brilliant shade of green and artfully pre- We were charmed by our Albanian wait- London, with a brasserie at the Park Plaza
breezy, stripped back atmosphere. Not sented, tasted marvellously of the garden. er who was attentive and knowledgeable. Westminster Bridge. Traditional Gallic dishes on
that it’s without personality – a fondue of The main courses were a let down He recommended a good bottle of merlot offer include tournedos rossini in truffle sauce
British cheeses (for sharing) and a warm though. Roast Devonshire duck with fen- from a well-balanced list, and if he kept us and sweetbreads with veal cheek, roast apple
vegetable salad that’s served with garden nel and orange consisted of pink slices of a little too enthusiastically plied with the and shallot sauce. Brasserie Joel, Park Plaza
flowers are unusual starters, while the breast flopping about in a puddle of restaurant’s home-made bread, we forgave Westminster Bridge, SE1 7UT. 020 7620 7272
mains – divided into meat, fish and grill watery sauce; a sea bream fillet was over- him – it was good bread. But while The www.brasseriejoel.co.uk
sections with four or five options in each – cooked and tasted dull, the curious, Avenue is a well-drilled operation, it is
tempt with dishes like slow cooked suck- brown length of braised celery that it sat more efficient than memorable. GO TO THE CIRCUS ON INDEPENDENCE DAY
Covent Garden restaurant Circus will be getting
in the revolutionary spirit on Sunday, offering an
TASTING NOTES all-American themed brunch to celebrate US
Independence Day. The restaurant will be open
DAMIAN CLARKSON, founder of catering company The London Kitchen from 11-3pm with a selection of Stateside
snacks, including classic stacked pancakes with

Food tips for the best of summer parties

1) PREPARATION is everything when
throwing a summer party. Since cold dish-
es are the order of the day, definitely have
food ready in the fridge that can be pulled
out as your guests arrive. Dishes such as
frittatas and salads will fit the bill per-
fectly. You should enjoy the evening as
much as your guests – make the effort
but don’t kill yourself trying.
2) Keep it informal and relaxed. No
one wants a stiff, multiple-course
meal when the sun is shining outside,
and people are turning up at different
times. Sharing and bowl dishes are the
perfect solution for a party, and increas-
ingly in London we've adopted a more con-
tinental approach to dining, with all-day
grazing being de rigeur. Bowl food is also
great for people to stand and eat from at a
garden party. One dish that always suits
this style is an organic salmon fillet on
herbed cous cous or a lovely fusilli with
feta, pumpkin and rocket.
3) Drinks should be refreshing. Jugs of
Moscow Mule made with ginger beer,
fresh lime, bitters and vodka are the per-
fect thirst quencher and again can be
prepared in advance. If parents are bring-
ing children, jugs of English apple juice
with organic elderflower are the ulti-
mate summer soft drink without the e
numbers.
4) Don't go overboard with decoration –
summer is all about keeping it natural. I
always think nothing beats a crisp, off-
white tablecloth dressed with some colour-
ful blooms such as peonies or
delphiniums (I always buy mine at my
local farmer’s market). As the
evening wears on, put on some
ambient music and light indoor
and outdoor candles to give a flavour
of the exotic.
The London Kitchen: 020 3267 1198
www.thelondonkitchen.com.
caramelised bananas and honeycomb butter,
spiced crab cakes, and Mexican quesadillas and
tacos. This being performance-friendly Circus,
there’ll also be the odd bit of table-side entertain-
ment. Circus, 27-29 Endell ST, WC2H 9BA 020
7420 9300www.circus-london.co.uk.
CUPCAKE MASTERCLASSES IN NW3
Primrose Hill’s award-winning home of delicious-
ness, Sweet Things Cakery, is spreading the
knowledge with some classes in how to
make the perfect cupcake. Founder
Natalie Allen will be explaining
ingredients and baking tips as
well as serving end-of-ses-
sion cocktails. Perfect for a
hen night, one suspects.
One hour classes are £45
with ingredients and cock-
tails included. To book call 020
722 2107. www.sweetthings.biz
 30 Lifestyle | Health & Beauty CITYA.M. 29 JUNE 2010

The king of scent and his

powers of perfume picking BY LAURA WILLIAMS
FITNESS & DIET EXPERT
FIT IN
THE CITY

Zoe Strimpel has a

consultation with
the world’s most
famous parfumier in
his lair at Harrods
W
HEN we meet, Roja Dove is
wearing a billowing turquoise
silk shirt tucked into trousers
held up by a diamante belt
with a skull clasp, and has skin so dewy
it could be that of a 20 year-old boy.
Such remarkable self-presentation, not
to mention his mellifluous voice, is
immediately suggestive of the fact that
there’s nobody else quite like him in the
world. For a start, the English parfumier
(Roja is an old spelling of Roger) is the
world’s only Professeur de Parfums,
though this is more of a general term
that refers to his huge status in the
industry rather anything too terribly
specific. Yes, he tours the world lectur-
ing and consulting on fragrance. But
he’s also a sort of a magisterial figure,
with his silky manner and superhuman
powers of smell.
After working in the perfume depart-
ment of Guerlain for decades, Dove set
up the Haute Parfumerie at Harrods. It’s
an opulent lair, with limited and special
editions, crystal vials, multi-shaped bot-
tles, chandeliers and even a perfume
that costs £140,000 – The Party In
Manhattan, which sports a bejewelled
lid with 26 parve diamonds hand-
applied in the stoppers.
The Haute Parfumerie is where all
Dove’s expertise – and his supreme con-
nections – come together. It contains
only the best scents in the world (in
Dove’s view), and is free of the branding
mania that takes place in the ground
floors of department stores, with Dior,
Chanel and Benefit girls all trying to
spray you with the latest scent. This
means you can find discontinued gems
like Jean-Charles Brosseau’s Ombre
Rose, an iconic scent in the 1980s, along-
side Dove’s own rather more expensive
bespoke fragrances and hundreds more,
mostly French-made.
Roja Dove, the world’s A VERY FRAGRANT CONSULTATION
only Professeur de The centrepiece of the Parfumerie is Dove
Parfums, at his per- himself, who holds immensely sought-
fumerie at Harrods. after consultations there. It was for this,
in my struggle to find a summer scent,
Picture: that I went along to see him at the Haute
Micha Theiner Parfumerie.
/City A.M. We sit facing each other in a velvet cur-
tained booth, amber liquid glinting all
around us like whisky, and begin. For a
man that looks as though he could read
your very soul, Dove surprises me by stick-
ing to the strictly olefactory. The consulta-
tion is basically a long process of
elimination, whereby I am repeatedly pre-
sented with two scents and choose the
one I like most.
He talks me through each one and sud-
denly they make sense: I can smell their
structure, detect their notes and how
they rise and fall as you sniff. He juxtapos-
es freshly squirted scents with those that
have faded as you hang on to them (time
is an important facet of fragrance). Some
begin sharp and go powdery; others are
all musk and exoticism and end up
smelling of holly. We run the gamut,
from Dove’s bespoke line, to 1970s clas-
sics, to brand new Parisian boutique
scents.
He doesn’t tell you what anything is
until you reject it. And after hundreds of
smells, your nose becomes tired. But even-
tually, it leads you where it wants to go,
despite your preconceptions about the
type of perfume you go for. I usually
reject floral and anything that could possi-
bly remind me of old ladies, and go for
musky notes. Yet I wound up with two that
I’d certainly never have found on my own:
the powdery Ombre Rose and a wonderful,
light floral scent called Paradis Paradis
from L’Atelier Floue, a Paris parfumier.
Thanks to Dove, I’m sorted with two sum-
mer choices that will serve me well not just
this year, but probably for many to come.
Roja Dove’s Haute Perfumerie is at the Urban
Retreat at Harrods. One hour’s consulation with
Dove is £250. An hour with an expert is £50.
www.harrods.urbanretreat.co.uk
Tighten your
budget and
your waistline
GET PEDDLING: Gridlocked traffic, the rising
cost of fuel and temperatures on the under-
ground reaching 40 degrees this summer
should make this one a no-brainer (better
still, invest in some good running shoes and
pound the pavements Forrest Gump-style).
BACK AWAY FROM THE REMOTE: With the
rising cost of energy, there’s never been a
better time to turn off the TV and head out-
doors to savour long light evenings while you
can. Escape from the office early and stroll
along the Embankment to watch the sunset
with a loved one. More romantic and less
depressing than watching the news/football.
SCRAP THE TAKEAWAY HABIT: A takeaway
here and there may not break the bank but
they’re usually waistline suicide. Expensive,
fattening and not terribly nutritious, take-
aways are probably best left for the odd
treat (or emergency). When you do treat
yourself, try and keep it healthy: opt for thin-
crust pizzas over the lardier variety and
plump for stir fries over anything battered.
GET GREEN FINGERS: Give gardens and bal-
conies a bit of TLC this summer by getting
busy with planting and digging. Bulbs and
seeds don’t cost a fortune and all that bending,
raking and mowing will help to burn off big
Sunday lunches a treat. You’ll also get a chance
to work and tone muscles that have probably
lain dormant for years.
MAKE A PUKKA PACKED LUNCH: Avoid paying
over the odds for mediocre sarnies by taking
your own lunch to work. Plan ahead so that
you’ve got some tasty things lined up for the
week – think stuffed wraps with chicken and
sun-dried tomatoes, or try rustling up a moz-
zarella and grilled pepper rocket salad.
laura@laurawilliamsonline.co.uk

Fishy feet may be the best

Timothy Barber went trader – that’s exactly what you do.
Luckily there are no piranhas involved.
to unsual lengths in Instead the skin gobbling is done by hun-
dreds of little Garra Rufa fish, otherwise
pursuit of soft and known – more encouragingly – as Doctor
fish. Careening around in their tank they
silky summer toes resemble anchovies, though I’m not sure
how they’d taste on a pizza. They’ve got a
pretty good idea how I taste, however,
tanks, each containing around 200 fish in
warm water (changed several times a day).
After rolling up my trousers and having
my feet gently washed by hand, I took my
seat above a tank and gingerly lowered
them in.
Two hundred fish suddenly looked like
millions as they swarmed onto me, until I
could barely see my feet for fish. Ticklish?

T
HE hot weather will be a mixed bless-
ing for anyone for whom sandal
wearing means feet resembling
parched deserts cracked with jagged
canyons. There are all the usual ways of
dealing with this – creams, sanding down
with pumice, going for a full-on pedicure
– but sticking your tootsies in a tank full
of flesh-eating fish might not seem the
most obvious. Particularly after last week’s
news story of a piranha turning up in an
English pond.
However, at Aqua Sheko, the UK’s first
ever “fish spa” – recently opened in
Kensington by a former Lehman Brothers
since I offered up my sun-cracked feet for
them to breakfast on last week.
Fish spas have been all the rage in South
East Asia for the past few years, but the
idea is actually from Turkey, where Garra
Rufa breed in warm springs where they
have been used for treating psoriasis and
skin conditions for generations. Karen Ho,
a Hong Kong native who worked at
Lehman Brothers’ London office before its
collapse, encountered fish therapy on hol-
iday in Macau and decided to bring it
here.
Aqua Sheko is a rather sultry, smartly-
designed place. There’s a row of glass
Oh yes, and then some, and I confess I let
out a few yelps as the slimy critters
thronged round my toes. “Dead skin is
protein, which they love like we love
sugar,” hooted Karen as they nibbled away.
Luckily Doctor fish don’t have teeth.
They suck gratefully on the skin particles,
leaving the fresh skin. Apparently what
they do have is enzymes in their saliva
which helps heal and regenerate skin, wards, though a few visits is recommend- £45 for 45 minute
hence their nickname. After a few min- ed to really see the benefits. A quick foot treatment including
utes I got used to the sensation, and had massage later – Ho is recruiting a reflexol- 30 minute fish thera-
no problem allowing the fish to keep feed- ogist to add to the experience – and sud- py and 15 minutes
ing on me for half an hour. Sure enough, denly flip flops don’t seem such a bad idea foot pampering.
my feet were softer and suppler after- again. And all thanks to fish. www.aquasheko.co.uk
CITYA.M. 29 JUNE 2010 Lifestyle | TV& Games 31

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
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pilots that fought in the Battle Worth It?; Five News at 9
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Wife: The charges against Peter Update IMAGINE
are dropped. 11pm CSI: NY BBC1, 10.35PM
12.05am The Poker Lounge 12am NCIS Alan Yentob meets acclaimed editor
1.05am Big Brother: Live 4.15am 12.55am SuperCasino and best-selling author Diana Athill,
KOTV Boxing Weekly 4.45am 4.05am Wildlife SOS 4.30am who is perhaps best known for her
Superbike World Championship Wildlife SOS 4.55am County volumes of memoirs.
2010 5.10am Formula Ford Secrets 5.10am The New Tomorrow
Championship 5.35am The Grid 5.35am-6am Michaela’s Wild
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7pm Live Twenty20 Cup
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War Two Lost Films 11pm How Surgery 11pm Transplant
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Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
    

SUDOKU KAKURO
13 30 12 14 11 40 5 16
26 17

12 14
Place the numbers from 1 to 9 in each empty cell so that each 42  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 8 28
44
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 23 16
  
above or to the left of it. 5 15 4
You can only use the digits 1-9 7 9    
 and you must not use the
17 10 3
45  
same digit twice in a block.
     The same digit may occur 24 19 
10 29 25
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column, but it must be in a
21
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8

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11 13 11
12 27
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    ACROSS DOWN
1 Young horses (5) 1 Imperfect (6)
 
     WORDWHEEL N I
4
7
Perhaps (5)
Very badly (7)
2 One who has a
particular regard for
a thing or person (7)
Using only the letters in the Wordwheel, you have 8 Flow in a circular
 ten minutes to find as many words as possible,
E V current, as of liquids (5) 3 Makes tight against
leakage (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E 10 Supply that can be
drawn upon (8) 5 Water-filled tank for

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A T 13 Prescribed selection
keeping live fish and
underwater creatures (8)
SOLUTIONS
of foods (4)
KAKURO is at least one nine-letter word in the wheel.
T L 15 The smallest
6 Graceful, dramatic
dance routine (6)
quantity (4)
QUICK CROSSWORD 5 3 2 1 8 9 3 9 Temperamentally
/ 2 5 * 1 ( 7 7 (
8 5 3 2 4 5 1 6 SUDOKU         
17 Test of something to see
if or how it works (5,3)
disinclined to talk (8)
9 4 7 8 5 7 8 9
& 0 5 . + *          11 Night bird (3)
+ ( $ 9 ( , ' ( $ / 6 2 1 9 5 2 4
         19 Leaves out (5)
7 1 6 7 9 3 4 8 12 Evergreen tree
( 1 % 8 1 , $
         20 Pasting (7) or shrub (7)
& 5 , 0 ( * 2 5 ( ' 5 3 2 6 1
        
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0
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WORDWHEEL         
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author (1771-1832) (5)
14 Slanted lettering (6)
$ 1 < 2 8 = 2
8 6 2 4 9 5 6 8 The nine-letter word          16 Descend by rope (6)
7 ( 1 7 6 $ & 2 5 1
         22 Relating to the
( 8 2 9 1 ( 9 8 5 7 5 4 1 7
was BASEPLATE countryside (5) 18 Mr Daltrey, lead singer
6 / $ 1 ' ( 5 ( ' 4 1 2 1 2 3 4         
with The Who (5)
 Sport
32 CITYA.M. 29 JUNE 2010

Results
Sneijder 84
WORLD CUP ROUND OF 16
Holland............................(1) 2 Slovakia..............................(0) 1
Robben 18 Vittek 90 (pen)
Att: 61,962
Brazil................................(2) 3 Chile.......................................(0) 0
Murray beats
wobble to
Juan 34
Luis Fabiano 38
Robinho 59 Att: 54,096
CRICKET
LV COUNTY CHAMPIONSHIP - DIVISION ONE: Durham v
Warwickshire (Emirates Durham ICG); Durham 288 (I D

sink Querrey
Blackwell 86) v Warwickshire7-0 (1.3 overs). Yorkshire v
Lancashire (Old Trafford); Yorkshire379-8 (96.0 overs) (A
Lyth 100, J A Rudolph 83, A McGrath 61, G Chapple 4-60). v
Lancashire.
DIVISION TWO: Surrey v Derbyshire (Chesterfield);
Surrey364-9 (96.0 overs) (M R Ramprakash 99, U Afzaal 73,
S J Walters 53, T D Groenewald 5-75). v Derbyshire.
Middlesex v Gloucestershire (Bristol); Middlesex 236 (J H
Davey 61, A J Ireland 5-25) v Gloucestershire81-2 (27.0
overs). Worcestershire v Leicestershire (New Road);
Worcestershire 175 (G M Andrew 53no) v Leicestershire163- “It was a very good match,” said the
3 (36.0 overs) (W I Jefferson 64, J du Toit 57).. WIMBLEDON fourth seed. “I had my chances at the
FRIENDS PROVIDENT T20 - SOUTH DIVISION: Glamorgan
v Somerset (Taunton); Glamorgan 138 (M J Cosgrove 75) v
2010 end of the first set, it was a huge point
in the match because he had the
Somerset 139-4. Somerset (2pts) beat Glamorgan by 6 BY FRANK DALLERES momentum and I managed to nick it
wickets.
PATRIOTIC football fans may have had away from him.
THIRD TEST MATCH: West Indies v South Africa little to cheer of late but British No1 “It’s tough playing against someone
(Barbados); West Indies 231 (D J Bravo 61, J Botha 4-56)
and 134-7 (57.0 overs) v South Africa 346 (A G Prince 78no, Andy Murray helped lift the gloom with such a big serve. The shot-mak-
A B de Villiers 73, G C Smith 70, S J Benn 6-81). yesterday by beating Sam Querrey to ing today was great, especially
TOUR MATCH: Pakistan v Kent (Canterbury); Pakistan 360 reach the last eight. towards the end of the first set. I
(Umar Umar Akmal 153, M A K Lawson 4-93) v Kent2-0 (1.0 The Scot, 23, showed guts to over- played well, just a few dips in the per-
overs). come first-set jitters and defeat the in- formance.”
form American 7-5, 6-3, 6-4 on a Querrey went into the match in
TODAY’S DIARY blistering Centre Court. high spirits, with a career-high world
World Cup Round Of 16 Victory secured Murray a place in ranking of 21 and boosted by his tri-
Paraguay v Japan (3pm).......................................................................................... the quarter-finals at the All England umph at Queen’s Club this month,
Spain v Portugal (7.30) ............................................................................................ Club for the third successive year and and bombarded Murray with a boom- Murray now faces French 10th seed Jo-Wilfried Tsonga in the last eight. Picture: GETTY
CRICKET means he is the only man left in the ing serve and hefty forehand.
Friends Provident T20 - South Division: Essex v Sussex tournament yet to drop a set. Yet Murray looked to be coasting to opener. looked likely to relinquish.
(Chelmsford). Murray will now meet Frenchman the first set until losing his way at 5-3 Murray was far from convincing as And he earned a match-winning
Jo-Wilfried Tsonga, seeded 10th, up. The world No4 allowed Querrey to the second set began but his oppo- breakthrough at 4-4 in the third that
SPORTS EDITOR JON COUCH tomorrow as he bids to match last level and then had to save three break nent also wavered, allowing him to enabled him to wrap up the match in
email sport@cityam.com year’s feat of reaching the last four. points before finally clinching the open up a 2-0 advantage that he never little more than two hours.

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pairs of tickets to watch the action from
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The prizes and terms and conditions are as follows:1st Prize: A pair of VIP tickets for the grand prix weekend at Silverstone. Includes a gourmet lunch and unlimited champagne, while enjoying the best view of the circuit
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CITYA.M. 29 JUNE 2010
Shock as Lu
knocks out
ace Roddick
WIMBLEDON
2010
BY FRANK DALLERES
STUNNED fifth seed Andy Roddick
admitted he had played “horrendous-
ly” after crashing out to little-known
Yen-Hsun Lu of Taiwan in the shock of
the tournament.
Roddick, last year’s runner-up and
three times a Wimbledon finalist,
fought tooth and nail to preserve his
challenge but eventually lost a
marathon last-16 match that featured
three tie breaks.
Lu, ranked 82nd in the world, won
4-6, 7-6 (7-3), 7-6 (7-4), 6-7 (5-7), 9-7 to
become the first Asian man for 15
years to reach a Grand Slam quarter-
final, where he will meet third seed
Novak Djokovic.
“Through the first three sets I was
playing horrendously, really badly,”
said the American.
“I think the fifth set was the best
set I played as I was hitting the ball
well and making him struggle to get
through service games sometimes,
but when you dig yourself a hole it is
hard to get out when you have given
them confidence. I thought he did a
good job controlling the middle of
the court all day, he had a gameplan
and stuck to it and deserved the win
more than I did.”
Torres predicts
Spanish surge
WORLD CUP
2010
BY JON COUCH
LIVERPOOL striker Fernando Torres
insists there is still more to come
from Spain as they prepare for
tonight’s last-16 showdown with
neighbours Portugal.
“We’ve all seen the level that this
team has and we know we haven’t
reached that yet,” Torres said.
“We’re ready for whatever comes.
FOOTBALL TRADER BEN CLEMINSON TAKES A LOOK AT
TONIGHT’S CLASH BETWEEN SPAIN AND PORTUGAL
EUROPEAN champions Spain take
on Iberian rivals Portugal in Cape
Town tonight with the winners
confident of beating either
Paraguay or Japan in the quarter-
final. Whoever succeeds will feel
very confident of progressing to
the semi-finals.
Portugal may have struggled in
qualifying, but it isn’t always a neg-
ative to struggle in the build-up to a
major competition and Carlos
Queiroz’s side have kept clean
sheets in all three group games.
Their best performance was
undoubtedly the 7-0 crushing of
North Korea, which sent shudders
In contrast to Roddick, top seed
Roger Federer coasted into the last
eight with a straight-sets victory over
Austria’s Jurgen Melzer.
Federer put his early-tournament
wobbles behind him with a 6-3, 6-2, 6-3
over the 16th seed that took less than
an hour and half.
The six-time champion faces Czech
12th seed Tomas Berdych next, after
he eased into the last eight here with
a 4-6, 7-6 (7-1), 7-5, 6-3 win over Daniel
Brands.
No2 seed Rafael Nadal defeated
Paul-Henri Mathieu 6-4, 6-2, 6-2 to set
up a mouth-watering quarter-final
against the only man ever to beat him
at the French Open, Sweden’s Robin
Soderling.
Djokovic, meanwhile, overcame
Australian 2002 champion Lleyton
Hewitt to take his place in the next
round, the mercurial Serb winning 7-
5, 6-4, 3-6, 6-4.
ORDER OF PLAY | TODAY
CENTRE COURT
K Clijsters (Bel) (8) v V Zvonareva (Rus) (21)
S Williams (USA) (1) v N Li (Chn) (9)
COURT ONE
T Pironkova (Bul) v V Williams (USA) (2)
P Kvitova (Cze) (3) v K Kanepi (Est)
We are where
we wanted to
be, living the
opportunity
that we
dreamed of.”
Torres him-
self has failed to shine so far this
World Cup after returning from
knee surgery, and admits he is
struggling to find his best form.
“I think I’m still a little away
from being 100 per cent, although
I’m close,” he added.
around the Sporting Index trad-
ing floor, but it’s unlikely we’ll see
a game like that tonight.
Spain started disappointingly,
losing 1-0 to Switzerland, but they
have looked more like their old
selves in the past two contests.
However, I reckon the defences
hold the key to this encounter
between two evenly-matched sides
who will be desperate to avoid con-
ceding early.
Portugal won 1-0 the last time
these two sides met in Euro 2004
and I can see this being another
low scoring game so the main bet
is to sell goals at 2.2 with Sporting
Roddick lost to Taiwan’s Yen-Hsun Lu in five sets.
Serena powers through
WIMBLEDON
2010
BY JON COUCH
DEFENDING champion Serena
Williams overcame a brave perform-
ance from 2004 champion Maria
Sharapova to blast into another
Wimbledon quarter-final.
The top seed recovered from a
marathon tie-break in the first set to
come through 7-6 (11-9), 6-4 against
the popular Russian on Centre Court.
Williams now plays China’s Na Li
in the last eight after she took out sev-
enth seed Agnieszka Radwanska with
a 6-3, 6-2 victory.
TODAY’S MATCHES
Paraguay v Japan
Pretoria, ko 3pm, ITV1
Spain v Portugal
Cape Town, ko 7.30pm, BBC1
Index. On current form I find
them quite hard to split and I’ll be
backing the draw at 11/5 with
Paddy Power, as well as having a
small bet on no goalscorer at 7/1
with Stan James.
Spain are 4/9 favourites with
William Hill to qualify and if they
do progress, they are likely to be
favourites to win the whole thing.
POINTERS...
Spain and Portugal to draw at 11/5 with
Paddy Power
No goalscorer at 7/1 with Stan James
Sell total goals at 2.2 with Sporting Index
Picture: REUTERS
The American remains on course
for another all-Williams final with
sister Venus after she edged out
Australian Jarmila Groth 6-4, 7-6 (7-5)
to earn a last-eight clash with
Tsvetana Pironkova, who beat Marion
Bartoli to prevent a rematch of the
2007 final.
Kim Clijsters won the battle of the
comeback queens from Belgium,
recovering from a shaky first set to
beat Justine Henin 2-6, 6-3, 6-3.
The shock of the day saw third seed
Caroline Woznacki thrashed 6-2, 6-0
by unseeded Czech Petra Kvitova,
while No4 seed Jelena Jankovic is also
out after retiring injured while trail-
ing 6-1, 3-0 to Vera Zvonareva.
Sport 33
SPORT | IN BRIEF
Hunt apologises for Hillsborough
FOOTBALL: Culture Secretary Jeremy
Hunt has apologised after suggesting
that hooliganism played a part in the
Hillsborough tragedy, which killed 96.
Praising the behaviour of England fans
at the World Cup, Hunt said “the terrible
problems” of “Heysel and Hillsborough in
the 1980s were behind us”.
Apologising, he said: “I know that fan
unrest played no part in the terrible
events of April 1989 and I apologise to
Liverpool fans and the families of those
killed and injured.”
Sharks snap up James
RUGBY UNION: Sale Sharks have
strengthened their squad for the new
Premiership campaign by completing
the signing of utility back Matty James.
The 23-year-old New Zealander
makes the step up from National One
side Cinderford after enjoying a spell
with Welsh side Neath in 2009.
Newcomers Exeter Chiefs, meanwhile,
have signed Samoan international
scrum-half Garrick Cowley from Esher.
Cavendish eyes fast start
CYCLING: Mark Cavendish is looking to
hit the ground running with a first stage
victory when the Tour de France gets
underway on Saturday.
The British rider sprinted to six stage
wins during last year’s Tour and believes
the 225.5km opening stage through
Holland to Brussels is right up his street.
“It’s no secret I love racing in Belgium
and to win that stage in Brussels, where
the crowds are going to be massive,
would be very special,” he said.
O’Brien dominates Coral-Eclipse
RACING: Aidan O’Brien has six of the 13
six-day entries for the Coral-Eclipse at
Sandown on Saturday. The master of
Ballydoyle has entered Beethoven,
Bright Horizon, Encompassing, Fencing
Master, Steinbeck and Viscount Nelson.
Henry Cecil’s Twice Over is one of
O’Brien’s main rivals, along with John
Gosden’s Dar Re Mi.
 34 Sport | Football CITYA.M. 29 JUNE 2010

Up in the air:
England fly
home with
Fabio in limbo
Capello wants to stay on but is left hanging as FA
delays decision on his future for two weeks
WORLD CUP
2010
BY FRANK DALLERES
UNDER-FIRE England manager Fabio
Capello faces a nervous fortnight
after being told that the Football
Association want time to weigh up
whether to sack him.
Capello held talks with Club
England chairman Sir Dave Richards
yesterday morning, just hours after a
crushing 4-1 defeat to Germany
ended the nation’s World Cup hopes.
The Italian insists he wants to see
out a contract that runs until after
the 2012 European Championships,
but has been informed he will have to
wait two weeks to learn his fate.
“I spoke this morning with Dave
Richards. He told me that he needs
two weeks’ time to decide,” said
Capello, who maintained he was
happy with Richards’ response. “Yes. I
think it is an intelligent answer.”
Capello, who is thought to earn
between £5m and £6m a year, defend-
ed the size of his salary and took the
opportunity to point out he had
shown loyalty to England by shun-
ning other job offers.
“When they decide to pick me as
manager, I spoke with the people
who give me this money. But it is not
the money, but the value of the man,”
he said. “I refused a lot of opportuni-
ties to be manager of important clubs
because I like to stay here. I like this
job. I want to stay on as manager of
England.”
Capello flew back from South
Africa last night with the rest of the
squad, but the Football Association’s
refusal to lend him their immediate
and unequivocal backing means his
future will remain up in the air long
after this morning’s landing.
The situation is a delicate one. The
64-year-old said in the wake of
Sunday’s chastening defeat that he
would only stay on if the FA still had
confidence in him, so has already
been somewhat undermined, but is
considered unlikely to leave of his
own volition and thereby forfeit a
hefty pay-off.
The FA, meanwhile, will want to
avoid a huge financial hit and is likely
to face accusations of incompetence if
it fires the former Real Madrid coach,
having removed a clause from his
contract on the eve of the tourna-
ment that would have allowed it to
sack him far more cheaply.
Club England managing director
Adrian Bevington said there was
“nothing sinister” in the move to
delay a decision on his future.
He added: “We just want to show a
common-sense approach rather than
Capello has a contract
making a knee-jerk reaction within
until 2012 with the FA but
24 hours of a very disappointing his job is under threat.
result. It makes perfect sense for us to Picture: ACTION IMAGES
go back to London and take stock of
the situation.”

Our problems lie deeper Spurs boss Redknapp

than knee-jerk reactions
OUR MAN IN SOUTH AFRICA
TREVOR STEVEN
after England’s woeful display against
the Germans, but I think it’s a sensi-
ble move to step back, let the dust set-
tle and reflect over a two-week period,
taking everything into account.
I’m sure the FA would not have
foreseen the World Cup going quite
so badly, so even after the disappoint-
ing group stage results, I doubt there
was ever a time when uncertainty
over Capello’s future entered offi-
cials’ heads.
bly wrong, the players themselves just
weren’t technically good enough not
to be stagnated by tactics.
Look at Holland, Brazil, Argentina
and Germany. All four have technical-
ly gifted players in their side, we do
not, and that comes down to how we
coach the game at grass-roots level.
Capello has also made the point
that his players looked tired after a
long, hard season and that a winter
break could help prepare us better for
admits interest in top job
WORLD CUP
2010
BY FRANK DALLERES
TOTTENHAM manager Harry
Redknapp has thrown his hat into the
ring to succeed Fabio Capello, declar-
ing he would find it impossible to
turn down the England job.
Redknapp is the bookmakers’
favourite to take the reins if the
Football Association decides to dis-
pense with the Italian following a dis-
want to manage our country. No-one
is ever going to turn that job down.”
Redknapp believes the FA should
appoint a homegrown candidate,
insisting they would at least match
the achievements of Capello and
Sven-Goran Eriksson, who led
England to the quarter-finals in 2006.
“We should be able to produce
someone who can manage the
England football team,” he said. “And
let’s be honest, they can’t do any
worse than what they’ve [Eriksson
and Capello] done.”

T
HE Football Association has not
always been correct in its deci-
sion-making in the past, but its
response to the criticism of
Fabio Capello after a dismal World
Cup campaign is common sense pre-
vailing.
It would have easy to make a rash
decision in the heat of the moment
First and foremost, the FA will need
to sit down and assess Capello’s tac-
tics in South Africa – and they won’t
make good reading.
We looked old, tired, unimaginative
and predictable, playing a rigid 4-4-2
with no width and no Plan B if, like
against Germany, it went awry.
But although Capello got it horri-
major tournaments.
I think he’s got a point. The
Germans break for six weeks and the
French for three, and although that
doesn’t disguise the fact we are tech-
nically not good enough to compete, I
think there’s room in our game to at
least consider it, if it’s going to help
spare us another campaign like this.
astrous World Cup.
“Until he’s not the manager it’s dif-
ficult to talk about it. But I’m English,
who wouldn’t want to manage
England?” said Redknapp.
“There’s not an Englishman –
whether it’s me, Roy Hodgson or Sam
Allardyce – who would turn the job
down because it’s our country and we
The former Portsmouth boss
added: “Could you imagine an
Englishman managing the Italian
national team? It doesn’t happen. The
Germans are the same, they have a
German manager.
“This guy [Capello] has a fantastic
record at club level. But look, we’ve
had a go with it now.”
CITYA.M. 29 JUNE 2010
Clinical Brazil
closing in on
a sixth title
BRAZIL 3 winners despatched a Chile side that
CHILE 0 Dutch camp before the teams meet in
WORLD CUP 2010
BY FRANK DALLERES
BRAZIL manager Dunga saw his side
justify their favourites tag by strolling
past Chile and into a last-eight meet-
ing with Holland – and then told
them to up their game further.
Two goals in the space of four min-
utes from Juan and Luis Fabiano gave
Brazil a stranglehold on the game
before half-time, and Robinho added
gloss to the score just before the hour.
Robben is back on song as
Dutch glide into last eight
HOLLAND 2
SLOVAKIA 1 World Cup 2010
WORLD CUP 2010
BY FRANK DALLERES
COACH Bert van Marwijk hailed
Arjen Robben after the fit-again
winger capped his first start of the
tournament with the goal that set
Holland on their way to the quar-
ter-finals.
Robben’s fine individual strike
and a simple second for Wesley
Sneijder secured the Dutch a last-
eight clash with Brazil, despite
Robert Vittek’s injury-time consola-
tion from the penalty spot.
Holland were again efficient
rather than dazzling, but Robben’s
return to the starting line-up pro-
vided spark and Van Marwijk is
delighted to have the former
Chelsea man at his disposal.
“I am so pleased that Robben is
fit again. He was decisive for us,” he
WORLD CUP NEWS | IN BRIEF
Fifa evade technology debate
FIFA remains defiant in its decision to
oppose goal-line technology, despite
even Prime Minister David Cameron
adding to calls for it to be introduced.
Cameron joined the debate after
Frank Lampard was denied a goal in
Sunday’s 4-1 defeat by Germany when
the ball had clearly crossed the line.
Fifa blocked any further experi-
ments with technology at a meeting of
the International FA Board in March,
and stood its ground at a media brief-
ing in Johannesburg yesterday.
Communications director Nicolas
Maingot said: “We will not enter into
The ease with which the five-time
had lit up the tournament will
ensure a few extra nerves in the
Port Elizabeth on Friday.
But Dunga is anticipating a tough
test and has warned his squad they
must continue to get better if they are
to claim a sixth World Cup.
“We have to improve in all sectors
of our play, but it was a nice game
against Chile,” he said.
“We have already said we are trying
to play the open football which every-
one wants to see. The players did well
and we got forward a lot.
“We know Holland are very diffi-
cult to beat and very able technical-
ly – they play like South Americans.
said. “It was important that he
played for 70 minutes and I think
for him he has just passed that fear
factor having recently returned
from injury.”
Bayern Munich star Robben
opened the scoring in style on 18
minutes when he gathered the ball
and ran at the Slovakia defence
any debate on refereeing at the daily
media briefing. I am not competent to
do so. The International FA Board
dealt with this topic in March. A clear
decision on the use of technology was
taken at the time.”
Real sign £20m Di Maria
ARGENTINA winger Angel di Maria
has sealed a £20m switch from
Benfica to Real Madrid.
The Spanish club confirmed the
transfer last night, making him the first conflict in the camp. Domenech has
arrival since Jose Mourinho was
appointed manager.
Di Maria, 22, spent three years in
“Some people doubted we would
perform but as we go along that con-
fidence is growing and growing and
we hope to make it to the final.”
Chile were at a major disadvantage
even before kick-off, with three play-
ers suspended, and found themselves
Robben (left) scored
Holland’s first goal.
Picture: ACTION IMAGES
before cutting inside and rifling a
low shot past Jan Mucha from 25
yards.
With six minutes remaining
Dirk Kuyt evaded goalkeeper
Mucha and squared for Sneijder to
tap the killer second goal that ren-
dered Vittek’s penalty – the last
kick of the game – irrelevant.
Portugal and won the player of the
year award last season as Benfica
scooped the double.
French FA chief quits
FRENCH Football Association presi-
dent Jean-Pierre Escallettes quit yes-
terday following France’s World Cup
humiliation.
France were eliminated at the group
stage in South Africa under coach
Raymond Domenech amid reports of
since left the post; now Escalettes will
resign on Friday at a meeting of the
organisation’s federal council.
Sport | Football 35
Luis Fabiano (left) and
Robinho (right) both struck.
Picture: PA
a goal down after 34 minutes when Claudio Bravo.
unmarked centre-back Juan headed With a quarter-final spot secure
home Maicon’s corner. Dunga’s men eased off, but that did
Moments later Brazil were two not stop Manchester City outcast
goals up, Kaka slipping in Sevilla Robinho gathering a pass from
striker Luis Fabiano to cap an incisive Ramires – who will be banned for the
move by rounding goalkeeper Dutch clash – and netting the third.
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