LOOKING FOR THE
GREAT BRITISH
Issue 1,185 Tuesday 27 July 2010
HAYWARD SENT
OFF TO SIBERIA
BP IN CRISIS
BY EMMA SADOWSKI
BP’S BELEAGUERED chief executive
Tony Hayward will stand down in
October and is expected to be nomi-
nated for a non-executive board direc-
torship with TNK-BP, the group’s
Russian joint venture.
The oil major is set to announce
Hayward’s departure this morning
and will reveal that Mississippi-born
Bob Dudley, the man in charge of the
oil spill clean up for the past six
weeks and a former chief executive of
TNK-BP, will take charge of the busi-
ness.
Hayward has come under heavy
criticism by US government officials
and the public for his handling of the
Gulf of Mexico oil spill, which is the
largest crude disaster in US history.
BP’s board met yesterday evening
to go over the details of Hayward’s
departure and severance package. It
also discussed the group’s second
quarter financial results, which are
expected to show up to $30bn (£19bn)
has been set aside to cover the costs of
the spill, creating one of the worst
quarterly losses in British corporate
history.
Last night BP maintained that
“Tony Hayward remained BP’s chief
executive”.
Lawyers have argued that Hayward,
53, who has worked for the company
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LOOKING FOR THE
BUSINESS WITH PERSONALITY
LONDON 2012: IT’S THE
TWO-YEAR COUNTDOWN
OLYMPICS SPECIAL P21-25
BP chief executive Tony Hayward (l) is set to be replaced by oil spill clean-up boss Bob Dudley (r)
for 28 years, is still entitled to an
£11.8m pay-off even if he joins TNK-
BP’s board.
“[Hayward] is still entitled to his
notice pay and benefits under his
contract, so his pension pot won’t be
affected,” said employment lawyer
Paul Reeves at Stephenson Harwood.
It is understood that the board’s
decision to replace Hayward, who has
led the firm since 2007, is a bid to
secure BP’s operations in the US,
www.cityam.com
which currently accounts for up to 40
per cent of the group’s sales.
Since the 20 April explosion of the
Deepwater Horizon rig that killed 11
people, BP’s reputation in the US has
suffered from significant criticism,
including an increase in public fury
over a number of Hayward’s gaffes.
During that time Hayward said he
“just wanted his life back” and that
the Gulf of Mexico was a “big ocean”
following the leak.
OVER 700 REAL ALES, CIDERS AND FOREIGN
BEERS FROM AROUND THE WORLD
Picture: REUTERS
Robert Gibbs, a spokesperson from
the White House said yesterday no
matter who leads BP, the company’s
obligations are to clean up the Gulf.
Gibbs said: “BP cannot, should not
and will not leave the Gulf without
meeting its responsibilities to plug
the well, to clean up the damage
that’s been caused and to compensate
those that have been damaged. I
think that is the most important les-
son out of here.” BP CARTOON: P14
GREAT BRITISH BEER FESTIVAL
3-7 August 2010, Earls Court, London
Advance Tickets
0844 412 4640 | www.seetickets.com
BEER FESTIVAL
3-7 August 2010
Earls Court, London
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0844 412 4640
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CONNAUGHT
HIT BY DEBT
FSA TO PROBE
SOCIAL HOUSING
FIRM P8
FREE
Basel rules
overhauled
to curb risk
▲
BANKING
BY OLIVER SHAH
BANKS face a tough cap on leverage to
stop them using off-balance sheet
vehicles to hide their borrowings,
under sweeping rules agreed by glob-
al regulators last night.
Institutions will be asked to hold
tier one capital equal to three per
cent of their unweighted assets, the
Basel Committee on Banking
Supervision said. The ratio will be
tested from 2013 until 2017 and could
become binding by 2018.
Prominent bankers such as
Deutsche Bank’s Josef Ackermann
and HSBC’s Stephen Green have
argued against such a limit, warning
it could curb lending and impact on
economic growth. But regulators said
such steps were necessary “to discour-
age excessive risk-taking.”
The leverage ratio was one of a
number of updates to the Basel III
reforms agreed by all but one of the
board’s 27 member countries.
In the face of lobbying from the
industry and some governments, the
committee delayed its liquidity rule
requiring banks to match the dura-
tion of their liabilities more closely to
their assets, meaning it will stay in
“observation phase” until 2018. Banks
will also be able to use capital held by
minority-owned affiliates towards
their tier one needs and count higher-
quality bonds as liquid assets.
ECB president Jean-Claude Trichet
described the accord as “a landmark
achievement” to strengthen the bank-
ing sector. BASEL Q&A: P2
Certified Distribution
31/05/10 till 04/07/10 is 103,725
www.gbbf.org.uk
 2 News
Vince Cable’s confused bank rhetoric
EDITOR’S LETTER
ALLISTER HEATH
VINCE CABLE was at it again yesterday,
bashing the banks, calling for bonuses
to be capped and for a new tax on
their profits if they don’t lend more. It
was a case of business as usual for the
business secretary – or so we thought
until we actually read Cable’s consul-
tative green paper, on which his com-
ments were supposedly based. The
document is strikingly at odds with
what Cable was telling journalists,
including at a press conference. For a
start, the green paper makes no men-
tion of a tax on banking profits, an
astonishing mismatch given the busi-
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Allister Heath
David Hellier
Ben Griffiths
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Katie Hope
David Crow
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Head of Distribution
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WHAT THE OTHER PAPERS SAY THIS MORNING
FEARS OVER CHINA’S BAD LOANS
China’s banks are facing serious
default risks on more than one-fifth
of the Rmb7,700bn ($1,135bn) they
have lent to local governments across
the country, according to senior
Chinese officials. In a preliminary
self-assessment carried out at the
request of the country’s regulator,
China’s commercial banks have iden-
tified about Rmb1,550bn in question-
able loans to local governments.
BANKS OPTIMISTIC IMF LOAN WILL
REBOOT UKRAINE
Only a couple of weeks after Ukraine
cancelled a $2bn Eurobond issue,
bankers who saw it as a missed and
attractive opportunity are now hop-
ing the former Soviet republic will
return to capital markets following
this week’s expected approval of a
$14.9bn standby loan from the
International Monetary Fund.
ness secretary’s endless threats. To
add insult to injury, the green paper
only mentions the word “bonus”
twice, in close succession; and the lan-
guage used is moderate, unlike
Cable’s populist rabble-rousing rheto-
ric. The document repeats a claim in
the Bank of England’s financial stabil-
ity report, making the theoretical (and
pretty useless) point that if UK banks
limited bonus and dividend payouts,
they could generate more capital and
lend more. This is arithmetically true
but economically and practically irrel-
evant.
So what is the coalition, which was
supposed to have banished the spin of
the Labour years, playing at? As one
Whitehall source told our political edi-
tor (see page 4), “I’m not sure where
Cable is coming from. He seems to be
arguing against his own green paper.”
An official at the business department
told us Cable was “floating some ideas
off the back of the paper.” The green
paper actually admits that “condi-
tions have improved since the finan-
Basel III rules at a glance
THE REGULATIONS EXPLAINED
Q. WHAT IS BASEL III AND WHAT
ARE ITS ROOTS? Q. WHAT ARE BASEL III’S MAIN
POINTS?
A. A.
In the wake of the financial cri-
sis, the G20 decided internation-
al capital and liquidity requirements
for the banking sector were in need
of a major overhaul. The original
rules, known as Basel I, were drawn
up in 1988 by a committee formed
following the disastrous collapse of
German bank Herstatt in the 1970s.
The measures were revised in Basel II
in 2004 although the US did not
implement the update.
Q. WHEN IS IT DUE TO COME INTO
EFFECT?
A. World leaders have asked the
Q. WHAT
Basel board to finalise the third
version in time for the G20 meeting
CHANGED IN
YESTERDAY’S TWEAKS?
A.
in Seoul in November. The intention
is to enforce it around the world by
the end of 2012, although more com-
plicated measures will be subject to
transition periods, observation peri-
ods and phase-ins.
FORD UNVEILS ECO-EXPLORER
The Ford Explorer, once the embodi-
ment of American baby-boomers’ love
affair with big cars, reappeared in a
more environmentally friendly form
designed to keep pace with shifting
consumer tastes. Ford promises that
the 2011 Explorer’s standard V6
engine will offer 20 per cent better
fuel economy than the current 2010
model. The version fitted with Ford’s
new four-cylinder EcoBoost engine,
which delivers as much power as a
V6, will have fuel consumption com-
parable to Toyota’s Camry.
PUBLISHER JOINS PROTEST AT
AMAZON E-DEAL
HarperCollins UK yesterday joined
Random House in protesting against
an exclusive deal between Andrew
Wylie, the controversial literary
agent, an Amazon.com to sell elec-
tronic versions of classic books.
Random House last week severed ties
with Mr Wylie.
cial crisis, and… the majority of busi-
nesses can now raise the finance they
require.”
The real danger to the sustainability
of the recovery is that some politicians
seem to believe that lending is good in
of itself and that if only we had more
of it all would be well. Given that this
crisis was one of over-borrowing, and
that the Bank’s credit conditions sur-
vey shows that credit availability to
business is increasing again, such
thinking beggars belief. The main rea-
son credit isn’t easier is that the
authorities have (sensibly) forced
banks to hike the amounts of capital
they retain as protection against the
risk of future losses; this automatical-
ly reduces the availability of credit.
The authorities also keep urging
banks to reduce the size of their bal-
ance sheets; that also implies cuts to
loan books. One can’t have it both
ways: either banks are smaller and
more sensible, or they take excessive
risks and lend too much. Why can’t
Cable understand this?
Basel III plans to make banks
raise their tier one and tier two
capital ratios. Banks will also need
“counter-cyclical” capital levels,
meaning they will have to hold more
in good times to slow their activity
and less in bad times to encourage
lending. Softer forms of capital that
cannot absorb financial shocks will
be eliminated. Basel III will intro-
duce a leverage ratio to limit banks’
borrowings and a “net stable fund-
ing ratio” to force institutions to
match the duration of their liabili-
ties and assets more closely.
The announcement was the
result of extensive horse trading.
Most importantly, the net stable
funding ratio has been delayed for
eight years while regulators develop
a workable version. The leverage
PENSION PAYOUTS THREATENED IF
EXECUTIVES QUIT OVER TAX
Many thousands of employees face
lower pension payouts if high-rank-
ing executives carry out threats to
quit corporate schemes to avoid a
punitive new tax measure to take
effect in April, The Times has learnt.
It is feared large numbers of senior
executives will choose to leave pen-
sion schemes to avoid the new levy.
AUDIT OFFICE DEMANDS REVIEW OF
FUTURE PFI PROJECTS
The National Audit Office has called
for a project-by-project review of
future Private Finance Initiative con-
tracts amid concerns about a rise in
bank lending rates. An NAO report
said that higher rates charged by pri-
vate sector lenders meant that the PFI
was less likely to represent value for
money in future. Credit crunch deals
locked in an extra £1bn of costs.
The implication of his thinking is
that banks should never make a prof-
it, shareholders deserve to suffer, staff
should have their incomes forcibly
reduced and bankers should be incen-
tivised to lend, regardless of whether
there is demand for credit or enough
projects that deserve financing. It is
astonishing that any cabinet minister
can think in this way, especially given
that 50 per cent of bonus payments
are collected in tax, shareholders are
already suffering from low returns on
capital, making them less likely to
want to provide more funds to the
banks (and hence further pressurising
lending), and that it is in taxpayers’
interest for RBS and Lloyds to be priva-
tised at a profit, not destroyed.
The good news is that Cable is clear-
ly losing the power struggle in the cab-
inet. Despite his still extreme rhetoric,
the government is becoming more
pragmatic, while credit conditions are
loosening of their own accord. The
City should be thankful for such small
mercies. allister.heath@cityam.com
ratio was also put into testing until
2018, although banks will have to
disclose their individual leverage fig-
ures from 2015.
Q. ARE THE RULES SOFTER THAN IN
DECEMBER?
A. Certain conditions have been
Q. WHAT
eased since the Basel Committee ECONOMIC IMPACT WILL
BASEL III HAVE?
published a draft at the end of last
A.
year. Other than the more gradual
timetable for bringing in the lever-
age and liquidity ratios, banks will
be able to count government and
high-quality corporate bonds toward
the stock of liquid assets they have to
hold against a future crisis. They will
also be able to include capital held
through minority-owned offshoots
as part of their tier one capital.
Q. HAS THERE BEEN BEHIND-THE-
SCENES LOBBYING?
A. Banks and industry groups have
been pressuring the Basel
Committee to water down capital
BUSINESS TURNS TO BANK OF
ENGLAND FOR FUNDING
he Bank of England purchased more
corporate bonds in May and June
under its quantitative easing pro-
gramme to push cash into the econo-
my as companies struggled with the
sovereign debt crisis. Bank holdings of
corporate debt rose from £1.36bn to
£1.6bn in the three months to June,
its quarterly Asset Purchase Facility
report showed.
ID FRAUD UP 22PC DUE TO RECESSION
The number of victims of ID fraud has
risen in the first six months of this
year compared to the same period in
2009. The number of instances has
also risen significantly, up 14pc from
January to June compared with the
previous year according to Cifas, the
UK's fraud prevention service. The
report also warned of a strong likeli-
hood of incidents continuing to rise.
CITYA.M. 27 JULY 2010
NEWS | IN BRIEF
AstraZeneca rises on Brilinta
US reviewers gave mixed views on
AstraZeneca’s experimental blood thin-
ner Brilinta but the company’s shares
rose on investor optimism that an advi-
sory panel will back the potential block-
buster drug. AstraZeneca is counting on
Brilinta to help offset the looming loss of
patent protection on key drugs such as
heartburn treatment Nexium and
antipsychotic Seroquel. AstraZeneca
shares gained 3.9 per cent on the New
York Stock Exchange after the FDA doc-
uments were released suggesting the
body will green-light the drug.
Legg Mason profit falls on costs
Legg Mason reported its quarterly earn-
ings decreased more than expected as
expenses rose and investors pulled
money out of many of its funds yester-
day. The US asset manager reported fis-
cal first-quarter net income of $47.9m
(£30.9m), or 30 cents per share, com-
pared with net income of $50.1m, or 35
cents per share, in the same period a
year earlier. The quarter ended 30 June.
Analysts had expected a 31 cemt per
share profit. Expenses rose three per cent
to $571m compared with a year ago.
requirements and
push back the sched-
Q&A
ule for bringing in
tougher rules. France, Germany and
Japan have also been pressing
against countries such as the UK and
US for softer measures.
This is a key battleground for
lobbyists, who claim Basel III
will make it harder for banks to lend
and thus slow economic growth
around the world. According to the
Institute of International Finance,
Basel III will shave three per cent
from the GDP growth of the US and
Europe over five years. The French
banking association is more
extreme, estimating a six per cent
hit. In contrast, Doug Elliott at the
non-profit Brookings Institute in
Washington thinks the impact will
be negligible, a bit like a minor
change in base interest rates.
CRISIS-ERA MUNI FUNDS HAUNT WALL
STREET BROKERAGES
Two years after the credit-market
meltdown hit a once-booming sector
of the municipal-bond market, Wall
Street brokerage firms are being
ordered to pay millions to investors
who lost big on what some thought
were low-risk investments. This
month, an investor arbitration panel
awarded a California family $2.1m,
the full amount of its losses on a $3m
investment in a fund sponsored by
First Republic Securities, formerly
owned by Merrill Lynch.
CITI DISCLOSES SECURITY FLAW IN
ITS IPHONE APP
Citigroup told its US mobile banking
customers they should upgrade to a
new application designed for Apple’s
iPhone after the bank’s original ver-
sion was found to have a security
flaw.
CITYA.M. 27 JULY 2010 News 3

US new home sales surge in

June as inventories contract
increase since May 1980 and partially fell from 9.6 in May to 7.6. Progress is
▲

US ECONOMY
BY JESSICA MEAD
SALES of new homes in the US
rebounded in June from the previous
month’s record low, providing a rare
ray of light in an otherwise gloomy
housing market. They jumped by 23.6
per cent last month to an annual rate
of 330,000 units from a downwardly
revised 267,000 units in May. The June
rise was the largest percentage
offset May’s historic 36.7 per cent fall.
Analysts had expected sales to
climb to 320,000. Capital Economics’
Paul Dales said: “New home sales were
always going to rebound from May’s
record low, which came in the after-
math of the expiry of the homebuyer
tax credit in April.”
“What’s more, with a record low of
210,000 new homes currently up for
sale, the supply of unsold new homes
therefore being made in reducing the
excess inventory, which is crucial for
the outlook for prices,” Dales added.
Societe Generale’s Aneta
Markowska said: “We would charac-
terise the housing environment as US home sales
still soft, but stabilising. Despite surged last
recent demand weakness, inventories month.
of new homes continue to contract, Picture: GETTY
which argues against another down
leg in home prices.”

Jain rejigs a
key Deutsche
bank division
▲

BANKING ment banking coverage and advisory,

BY HARRY BANKS
ANSHU Jain tightened his grip on
Deutsche Bank’s investment bank by
installing a 15-member management
team of mostly company veterans,
ahead of today’s second-quarter earn-
ing results.
The changes introduced by Jain,
who is favourite to succeed Josef
Ackermann as Deutsche Bank’s chief
executive, mark an evolution in
Deutsche’s strategy, with the bank
focused on corporate finance, mar-
kets and transaction banking.
The reshuffle more closely inte-
grates a division previously run by
former investment banking co-head
Michael Cohrs, who has left Jain to
take over sole responsibility from July.
The 15 CIB executive committee
members are: Jacques Brand, invest-
Anshu Jain took over
sole responsibility for
Deutsche Bank’s invest-
ment banking at the
Alan Cloete, global finance and for-
eign exchange, Ivor Dunbar, capital
markets, Michele Faissola, rates and
commodities, Colin Fan, credit and
emerging markets, David Folkerts-
Landau, research, Rich Herman, insti-
tutional client group, Stephan
Leithner, investment banking cover-
age and advisory, Boon-Chye Loh, Asia
Pacific region, Jeff Mayer, North
America region, Ram Nayak, structur-
ing, Brett Olsher emerging markets
coverage, Garth Ritchie, equities,
Henry Ritchotte, chief operating offi-
cer and Werner Steinmueller, transac-
tion banking.
GERMAN BANKS: P5
ANALYSIS l Deutsche Bank
56 € 50.38
26 Jul
54
52
50
48
46

start of this month

26 Apr 25 May 23 Jun 22 Jul

Unite to sue British Airways over

removal of employee travel perks
secure a settlement to this dispute
▲

AVIATION
UNITE, the trade union representing
11,000 British Airways (BA) cabin
crew, will launch a legal attack over
the airline’s removal of travel perks
from striking staff.
The union said yesterday it believed
BA management was “breaching
European human rights legislation”
when it cut travel concessions from
cabin crew in March.
BA and Unite have been at odds
over the move since and it is now the
sole reason the dispute continues.
Unite joint general secretaries
Derek Simpson and Tony Woodley
said: “Unite remains determined to
acceptable to cabin crew. Until such
an agreement is secured, we will con-
tinue to support our members finan-
cially and legally.”
The airline rejected the claim by
Unite and has pledged to defend its
position vigorously.
A statement from BA said: “Staff
travel is a non-contractual perk that
the company can withdraw at its dis-
cretion. Our cabin crew knew that if
they took part in strike action they
would lose their staff travel perks.”
Unite and BA will return to the
negotiating table next week at concil-
iation service, Acas in an attempt to
come to an agreement.
 4 Politics CITYA.M. 27 JULY 2010

Cable targets bank bonuses

and dividends in lending war
lending.” “floating some ideas off the back of
▲

POLITICS
BY DAVID CROW
VINCE Cable, the business secretary,
yesterday stepped up his war of words
against the banking industry, warn-
ing that dividends and bonuses could
come under attack if banks don’t lend
more to small businesses.
Unveiling a green paper aimed at
getting banks to fund a private sector-
led recovery, Cable said: “There clearly
is a choice between paying out cash in
bonuses and reinvesting it in new
Cable warned that the government
could introduce new lending agree-
ments or a tax on bank profits if the
industry fails to get its house in order.
However, there was a mismatch
between his rhetoric and the contents
of the green paper, which made no
mention of a tax on bank profits.
“I’m not sure where Cable is com-
ing from. He seems to be arguing
against his own green paper,” said one
Whitehall source. An official at the
business department said Cable was
the paper” and insisted that chancel-
lor George Osborne was “very support-
ive of the approach”.
Angela Knight, chief executive of
the British Bankers’ Association,
pointed out that the green paper actu-
ally admits the situation is already
improving.
“Conditions have improved since
the financial crisis, and… the majority
of businesses can now raise the
finance they require,” the green paper
states.

Mark Hoban launched a consultation on regulatory reform Picture: GETTY

Thousands of
firms facing
more red tape
costs in making arrangements to deal
▲

POLITICS
BY DAVID CROW
THOUSANDS of banks and insurers
could be forced to pay through the
nose to comply with the biggest over-
haul of financial regulation in a
decade, because they will have to deal
with two regulators instead of one.
The government made the admis-
sion as it began a three-month consul-
tation on plans to scrap the Financial
Services Authority and replace it with
two new regulators.
A Prudential Regulation Authority
(PRA) – which will operate as a sub-
sidiary of the Bank of England – will
be responsible for banking supervi-
sion, while the Consumer Protection
and Markets Authority (CPMA) will
take on the remainder of the FSA’s
duties. A new Financial Policy
Committee (FPC), charged with spot-
ting the build of risk in the financial
system, will also be created.
But in an impact assessment
released yesterday, the government
said between 1,500 and 2,000 firms –
mostly banks and insurance compa-
nies – are “likely to incur transitional
with two regulators rather than one”.
It also warned of “higher ongoing
costs”. The overhaul is expected to set
the taxpayer back by around £50m.
Meanwhile, plans for an Economic
Crime Agency charged with stamping
out white collar crime appear to have
been delayed. The government was
expected to launch the ECA alongside
the two new regulators, but yesterday
Mark Hoban, the financial secretary
to the Treasury, told City A.M. a sepa-
rate consultation will now be
launched at a later date.
Before the election, sources close to
chancellor George Osborne insisted he
would table legislation “as early as pos-
sible in the next parliament”.
Yesterday, the government appeared
to step away from this firm commit-
ment. “The government proposes to
consider, as part of possible wider
reforms to the approach to tackling
economic crime, whether to transfer
responsibility for prosecuting criminal
offences… to a new Economic Crime
Agency (ECA),” it said in its consulta-
tion document on regulatory reform.

REGULATORY OVERHAUL

Q. WHICH FIRMS WILL BE

AFFECTED BY THE OVERHAUL?
A. The Financial Services Authority
(FSA) currently regulates 20,000
firms. The vast majority of those will
simply be regulated by the new
Consumer Protection and Markets
Agency, which will police conduct in
financial services and protect cus-
tomers. Although there will be some
changes, they won’t incur any signif-
icant extra costs.
Authority (PRA),
which will operate as a
Q&A
subsidiary of the Bank of
England. But they will still be policed
on a day-to-day basis by the CPMA,
meaning they will have to comply
with two different watchdogs.
Q. WHY WILL IT COST FIRMS
MORE?
A. These firms – which total
between 1,500 and 2,000 – will
need more staff to manage relations

Q. WHICH FIRMS ARE GOING TO

FACE HIGHER COSTS?
with two watchdogs, which could
request information in different for-

A. All banks, investment banks and

insurers will also be regulated by
a new Prudential Regulation
mats. The cost of overhauling compli-
ance systems will also be
considerable.
CITYA.M. 27 JULY 2010 News 5

CITY VIEWS: HAS THE CITY STARTED TO QUIETEN DOWN IN

THE SUMMER? Interviews by Marion Dakers

RACHEL NEWTON | BREWIN DOLPHIN RUSSELL LAMB | IT CONSULTANT

“I think people have become more optimistic as the
weather has improved. But until the government’s
spending review comes out in the autumn there’s
still going to be a lot of uncertainty in the
City. In the public sector too, people still
seem anxious about spending cuts.”
“Things have perked up as we’ve moved into sum-
mer. Businesses have started moving offices
again, and spending a bit more. I don’t know
whether this is just down to the weather and the
holidays, but I hope it carries on. I think
there is still a lot of uncertainty.”

SAVIN GOONEWARDENE | AVIVA INVESTORS

“People are still unsure about what’s happening, especially those who are not from the UK. The new government seems
keen to cut back on people coming to work from overseas, which is going to cause big economic problems. I think people

SALE
know tough spending choices are required, and they’re prepared, but they don’t feel like things have stabilised yet.”

Eurogroup chairman Jean-Claude Juncker defended the stress tests Picture: GETTY

Market calm
on bank tests
the dollar at $1.2996. The pound was
▲

BANKING
marginally higher at $1.5497.

BY OLIVER SHAH
EUROPEAN lenders’ credit default
swap (CDS) spreads narrowed and the
euro was steady yesterday as the mar-
ket gave a mild thumbs-up to the
region’s bank stress test results.
The cost of insuring against default
on debt issued by key banks fell after
the Committee of European Banking
Supervisors (CEBS) said just seven of
91 institutions needed to raise extra
capital. The amount of capital
required – €3.5bn (£2.9bn) – was far
below the level predicted by analysts.
CDS spreads for Barclays, HSBC,
Lloyds Banking Group and Royal
Bank of Scotland fell by between one
and 12 basis points, according to
Markit. Spreads for Spain’s regional
banks, where instability has long
been suspected, shrank more dramat-
10
ONE WAY, FROM
Analysts were divided on the use-
fulness of the stress tests. At the posi-
tive end of the spectrum, Nomura
Credit suggested the extent of institu-
tions’ disclosure would bolster mar-
ket sentiment and allow investors to
model more bearish scenarios.
Bank of America Merrill Lynch said
greater transparency on banks’ sover-
eign debt holdings was “certainly the
most significant accomplishment”.
Others were scathing. Analysts at
RBS European Economics said the
decision not to factor in banks’ sover-
eign exposure outside their trading
books and use a tier one capital ratio
target rather than core tier one capi-
tal meant the tests were “weakened”.
Beyond the market’s short-term
reaction, the arbiter of the tests’ suc-
cess will be whether the blockage in

ically as investors drew confidence.
The premium for insuring Caja de
Ahorros del Mediterraneo’s debt
dropped from 633 to 588 basis points.
The steepest decline for a European
bank saw National Bank of Greece’s
CDS spread come in from 831 basis
points to 750 basis points.
The euro closed slightly up against
£
wholesale lending is eased, said
Exane BNP Paribas’ Ian Gordon. He
said: “[That] would be of clear benefit
to wholesale-reliant UK banks.”
Jean-Claude Juncker, chairman of
the Eurogroup of finance ministers,
defended the stress tests against criti-
cism. He insisted they had been
“robust” and “professional”.

German lenders release PIIGS

stats but Deutsche Bank is quiet FLIGHTS FROM LONDON (STANSTED)
Greece might struggle to service its
▲

BANKING
GERMAN banks appeared to cave in to
pressure from European Union regu-
lators late yesterday as they joined EU
peers to reveal the extent of their
exposure to heavily indebted
Eurozone nations.
The banks -- Hypo Real Estate,
Landesbank Berlin and cooperative
banks DZ Bank and WGZ Bank --
joined Postbank to reveal their sover-
eign debt exposure to Portugal, Italy,
Ireland, Greece and Spain, or PIIGS
states. The exposure to these heavily-
indebted Eurozone countries has
been a concern among regulators fol-
lowing worries earlier this year that
government debt.
Hypo Real Estate late last night said
it had €73bn (£61bn) worth of expo-
sure to PIIGS states.
Landesbank Berlin said it had €1bn
TRAVEL SEPTEMBER-OCTOBER
worth of exposure to PIIGS states as of
31 May, most of which was held on
the banking books.
Postbank said its total sovereign
exposure was €7.9bn as of 20 July.
Cooperative bank WGZ Bank said it
had €4bn of exposure to the PIIGS
states as of the end of March.
Cooperative bank DZ revealed
€11.3bn of exposure to PIIGS. Book until midnight 29.07.10. Subject to availability. Terms and conditions apply,
Only Deutsche Bank has not dis- see Ryanair.com for details. Fares exclude optional fees/charges.
closed its Eurozone exposures.
 6 News CITYA.M. 27 JULY 2010

UKFI slashes
director pay
by 5 per cent
▲

FINANCIAL SERVICES that expenditure for the year to end

BY VICTORIA BATES of March came in at £3.7m, of which
personnel expenses were almost £2m.
DIRECTORS at UKFI, the body set up UKFI has faced difficulties in
to manage the taxpayers’ stakes in retaining key staff since its inception
the banks, have agreed to take a vol- in 2008. RBS chairman Sir Philip (Left to right) UKFI chief executive Robin
untary five per cent pay cut, in a nod Hampton and Pearson’s Glen Moreno Budenberg, new market investments chief
to the government’s public sector aus- both held the chairmanship for a Jim O’Neil and chairman David Cooksey
terity drive. period, while ex-chief executive John have all accepted lower pay packets
The pay cut for UKFI’s seven board Kingman left after just over six
members amounts to a saving of over months. Two market investments
£20,000 for the Treasury. Robin executives, John Crompton and Tim AUSTERITY DRIVE | UKFI DIRECTORS’ REMUNERATION
Budenberg, the ex-UBS banker who Sykes, have also quit this year, to be
took the chief executive’s mantle in replaced by O’Neil. BOARD DIRECTOR DATE APPOINTED CURRENT SALARY
January, has also waived his right to a One of the most pressing problems POSITION ANNUAL AFTER PAY
bonus for the year, meaning that for UKFI in keeping senior staff on SALARY CUT
none of the board members will board is the delay before it will be
Chairman David Cooksey 1 August 2009 £100,000 £95,000
receive any performance-related pay. able to divest the government’s stakes
Bank of America Merrill Lynch vet- in RBS and Lloyds, expected to be at Chief executive Robin Budenberg 1 January 2010 £155,000 £147,250
eran Jim O’Neil, who said last week he least a year away. Chairman David
would move over to UKFI to take Cooksey yesterday reiterated that Non-executive Peter Gibbs 18 January 2009 £37,500 £35,625
responsibility for market invest- completing UKFI’s task would “not be Directors
ments, has also taken a hit. O’Neil’s quick or easy”, requiring “profession- Michael Kirkwood 18 January 2009 £40,000 £38,000
salary of £180,000 a year reflected a alism and patience”. UKFI said it had Lucinda Riches 15 January 2009 £37,500 £35,625
reduction negotiated prior to his not ruled out any options for selling
Philip Remnant 11 March 2009 £32,500 £30,875
appointment, UKFI said. down the stakes and would continue
The organisation published its to explore alternatives, including Louise Tulett 11 March 2009 £0 £0
annual accounts yesterday, showing public offers for sale.

Ocado chief Tim Steiner (l) blames hedge funds for the shares’ fall. Picture: Christopher Pledger
Ocado fails to
recoup early
loss in value
▲
RETAIL
BY STEVE DINNEEN
NEWLY floated Ocado failed to
recoup the losses it made in last
week’s unofficial, grey market trad-
ing, yesterday closing 16p shy of the
180p it floated at just over a week ago.
On its first full day of official trad-
ing Ocado’s shares started as low as
159.25p before finishing up three per
cent at 164p.
The firm’s chief executive Tim
Steiner last week blamed hedge funds
for “taking a pop” at his online grocer
but said he wasn’t worried about the
drop in value.
Retail investors were last week
offered a chance to cancel their
orders after Ocado was forced to drop
its value at the last minute after a
lack of interest in the shares.
It slashed the price from 200-275p
to 180-200p, finally setting the price
at the bottom of the lower range.
Those retail investors – staff and
Institute of Directors hits out at
public interest test for takeovers
▲
FINANCIAL SERVICES
THE Institute of Directors (IoD) has
slammed the idea of a public interest
test for takeovers which is being con-
sidered by the Takeover Panel.
The IoD instead argued in favour
of a requirement that all bids for
major UK-listed companies should
be conditional on achieving the
support of the shareholders of the
acquiring company, regardless of its
domicile.
The Takeover Panel’s review into
the takeover process in light of the
controversial acquisition of Cadbury
by US firm Kraft closed last night.
Miles Templeman, director general
News
customers of the firm – who did not
cancel their purchases are now
thought to have suffered an immedi-
ate hit of over £1m.
Ocado has declined to reveal how
many of its customers took up the
offer. The firm says it is confident the
value of the firm will rise over a two-
year period.
However, a string of analysts
released damning notes, speculating
the firm is worth as little as £400m
and warning off investors.
ANALYSIS l Ocado
164 p 164.00
26 Jul
163
162
161
160
159
08:00 11:00 14:00
of the IoD, said: “The Takeover Code
must continue to support the UK as a
leading destination for foreign invest-
ment and as a leading location for
corporate HQs and operations.
“It would be undesirable for
takeover policy to be perceived as a
pretext for protectionism, as part of
an industrial strategy, or as the out-
come of a political lobbying process.
“For these reasons, we are opposed
to a new public interest test for
takeovers.”
The IoD also said it opposes raising
the acceptance threshold for a
takeover offer as a way of protecting
the long-term interests of the firm
and its shareholders.
7
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 8 Focus on Connaught
FSA to probe
Connaught as
debt woes hit
▲
PROPERTY
BY MARION DAKERS
THE Financial Services Authority has
launched a probe into house mainte-
nance firm Connaught.
The City watchdog is investigating
whether Connaught fully disclosed
its dire financial condition to
investors ahead of last month’s shock
profits warning.
The FSA’s move comes as
Connaught lost almost 70 per cent of
its share value yesterday as it admit-
ted it will breach its banking
covenants by the end of August.
The FTSE 250-listed firm revealed
its debt is “significantly in excess” of
the £120m originally posted, and said
it is in urgent talks with unnamed
lenders to secure additional funding
above the £200.6m already borrowed.
Company bosses met with share-
holders, analysts and employees yes-
terday to convince them that the firm
has a future. The shares had already
shed two-thirds of their value after a
profit warning in June, when the
firm blamed lost trade on public
spending cuts.
City stalwart Sir Roy Gardner, who
was appointed chairman in May, yes-
terday drafted in four City veterans to
help change the firm’s fortunes,
including Stephen Billingham, for-
merly of British Energy and WS
Akins, who will work on funding.
Roger Wood of British Gas, Michael
Young of Centrica and Compass and
former Capita executive Chris Sellers
have also been taken on. An
unnamed Big Four auditor is still
examining the firm’s accounting pol-
icy, after Sir Roy initiated an inde-
pendent review two weeks ago.
Sir Roy said yesterday the situation
was “challenging”.
FAST FACTS | CONNAUGHT
● Shares closed yesterday at 31.7p, almost 70
per cent down on the day and 93 per cent down
on the 52-week high of 448p seen in October.
● The social housing maintenance firm started
trading in 1982 as a concrete repair company.
CITYA.M. 27 JULY 2010
ANALYSIS l Connaught
350 p
31.70
250 26 Jul
150
50
26 Apr 17 May 7 Jun 25 Jun 15 Jul
Connaught chairman Sir Roy Gardner has assembled a new team in a bid to turnaround the firm
ANALYST VIEWS: WHAT DOES TODAY’S STATEMENT MEAN FOR
CONNAUGHT? By Marion Dakers
DAVID JONES | IG INDEX JOE BRENT | LIBERUM CAPITAL
“ “
Companies have been battered in the This is clearly a disturbing statement
past following profit warnings, and there’s always which leaves us uncertain about trading and the
the possibility that they will pull through. It’s hard financial position. More encouragingly, Sir Roy
to see the banks offering to lend Connaught more Gardner has put together an A-team manage-
in the current climate, so its best bet is probably ment, including Stephen Billingham, who we think
” ”
for a large investor to come along and give is a top notch FD. But we are still in the
it some financial breathing space. dark and retain our ‘sell’ rating.
PAUL CHECKETTS | ORIEL SECURITIES
“
The situation at Connaught appears to be spiralling out of control. What began as a 10 per cent revenue shortfall
”
has become potential administration. Chairman Roy Gardner has brought in some serious business men in an attempt to
sort out the mess. They will have their work cut out. The shares have to be avoided. Sell.
CITYA.M. 27 JULY 2010 News 9

Lion snaps up French food

producer Picard for £1.3bn
food can be high-quality, is the coun- matter said the deal placed an enter-

▲
CONSUMER
BY HARRY BANKS
BC PARTNERS has agreed to sell
French frozen-food firm Picard
Surgeles to rival Lion Capital, high-
lighting the keen appetite of private
equity firms to strike deals in the
recession-resilient food industry.
The sale of Picard, which has
thrived by persuading France’s fastid-
ious consumers that convenience
try’s biggest leveraged buyout (LBO)
since the September 2008 collapse of
Lehman Brothers.
In a joint statement yesterday,
which contained no financial details,
the firms said Lion would begin talks
with employee representatives this
week ahead of a formal agreement
and the transaction was likely to com-
plete in the fourth quarter.
Three people familiar with the
prise value of about €1.5bn (£1.3bn)
on Picard. BC would make roughly
double its initial equity investment,
one of the people said.
Two of the people said Lion made a
pre-emptive bid over the weekend to
head off rivals Bain Capital, CVC and
LBO France, who were also preparing
binding bids for the company.
Bain, CVC and LBO France all
declined to comment yesterday.

EX
TE
29
ND
GSK boss Andrew Witty is looking for small bolt-ons Picture: Micha Theiner/City A.M.

ED
Jul
DE 01
GSK explores JOHN GRIFFITH-JONES

AD
y2
LI NE
IS READY. ARE YOU?

0
options with
rival Genzyme
▲

PHARMACEUTICAL Genzyme as it continues to look for a

BY EMMA SADOWSKI
SHARES in GlaxoSmithKline (GSK) fell
yesterday on news that the pharma-
ceutical major made an approach for
biotech group Genzyme.
GSK made the “causal approach” to
wards the US based group over the
weekend asking to be kept in mind if
Genzyme intended to put itself up for
sale.
Although no discussions have
taken place, chief executive Andrew
Witty said the group was looking to
do some smaller bolt-on type acquisi-
tions. “We may do small targeted
deals, but nothing big. We will not do
a large transaction in pharma nor in
generics,” said Witty.
GSK declined to comment on its
interest in Genzyme, which is the
world’s third largest biotechnology
firm and specialises in rare diseases.
But industry experts have said that
Genzyme is much more likely to do a
deal with Sanofi-Aventis.
The French pharma group is under-
stood to have started “sounding out”
large acquisition. “We view Genzyme
as being a credible target for Sanofi,
and the magnitude of the stock price
moves imply that some sort of process
is indeed occurring,” said Dominic
Valder at Evolution Securities.
Genzyme has appeared particular-
ly vulnerable of late as it has been
dealing with shortages of two of its
biggest-selling products due to a viral
contamination at its plant in Boston
that led to declines in earnings and
its share price.
GSK’s ended 1.3 per cent lower yes-
terday at 1,172p.
ANALYSIS l GlaxoSmithKline
1,250 p
1,172.00
26 Jul
1,200
1,150
1,100
1,050
26 Apr 17 May 7 Jun 25 Jun
John Griffith-Jones, Chairman of KPMG, 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.
The Awards are free to enter online at
www.CityAMAwards.com. There are 15 company
awards recognising corporate excellence and 6
awards that celebrate the individual or team
stars of the financial community.
Extended deadline for entries: 29 July 2010
Book now for the City A.M. Awards reception,
dinner, ceremony and entertainment on
Thursday 28 October 2010 at
Grange St Paul's Hotel, London EC4.
To be a sponsor of the first City A.M. Awards
15 Jul
please contact Harry Owen: 020 7015 1241
harry.owen@cityam.com

UK Coal loses top bosses as part headline sponsor in association with

of a radical overhaul of its board

business from the property business.
▲

MINING
UK COAL is set to lose both its chief
executive and chairman after a radi-
cal shake-up of the group’s board.
Chairman David Jones and chief
executive Jon Lloyd will leave the UK’s
largest mining group within the next
month as UK Coal will merge the two
positions into one role, creating a
new executive chairman post.
UK Coal will separate its mining
Mining director Gareth Williams will
take over the new mining division,
while Owen Michaelson will join UK
Coal from Peel Holdings as managing official venue partner Awards reception sponsor category sponsors
director of the property division.
“These very different businesses
need to focus single-mindedly on
their distinct value creation strate-
gies,” said Jones.
UK Coal has already launched the
search for a new executive chairman.
 The Capitalist
10
KILLING KITTENS ORGY ORGANISER
WHIPS HER BUSINESS UP A NOTCH
THOSE Londoners with a persistent
naughty streak have probably heard
of Emma Sayle, the founder of sex
party organising firm Killing Kittens.
Up until now, Killing Kittens has
specialised in what Sayle likes to
describe as “eyes wide shut orgies”,
with club members – vetted for
attractiveness – gathering in private
townhouses to get to know one
another more intimately.
But I hear that Sayle is now gun-
ning to take the business to the next
level, and is in advanced-stage talks
with a Canadian technology multi-
millionaire who wants to take a hefty
stake in the company.
On the menu if the deal goes ahead
is an ambitious upscaling of the
Kittens franchise. Quite apart from
selling merchandise such as sex toys,
underwear, CDs, raunchy books and
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
the like, Sayle is also planning to
launch an online dating forum to
run alongside the party-organising
branch, using the same physical
membership criteria.
“Parties are what we are known for,
but that part of the business is at
capacity,” she tells me. “Currently, we
only hold about one party a month,
but the problem with holding them
more often is that they would lose
Emma Sayle has big plans for the future of her Killing Kittens business
their excitement and allure and
become more mainstream. That’s not
something we would relish.”
Well, quite. Prudes had better turn
the other cheek: we haven’t seen the
last of Sayle yet.
BEAUTY CONTEST CHOP, CHOP
Speaking of beautiful people, count UKFI still has at least a year to go
this as another call to the financial
community to send in nominations
for The Capitalist’s upcoming competi-
tion to find the ten hunkiest gents
and loveliest ladies in the City.
The inbox has been flooded with
talent since nominations opened last
week, and there’s not long to go
Last year’s men’s winner, Joshua Raymond
before judging commences.
If you, your colleagues or friends
have what it takes, email thecapital-
ist@cityam.com with your nomina-
tions – plus flattering photographs, of
course.
TIME OUT
A near-70 per cent collapse in a share
price and a warning of a breach of
banking covenants is usually enough
to send a company’s spinners into
overdrive. Bizarrely, that wasn’t the
case yesterday with property group
Connaught. Upon enquiring after
group PR manager Paul Haines early
yesterday, baffled hacks were
informed he had taken the morning
off…
REST
MOVIE STAR And finally, some sad news for the
Quite how this passed under the stockbroking community this
radar for so long is a mystery, but
those who are fascinated, awed,
angered or appalled at Goldman
Sachs – or all of the above – can
now look forward to an actu-
al movie about the banking
behemoth, in which chief
executive Lloyd Blankfein
is set to make a cameo
appearance.
Filmmaker Ric
Burns was first
approached about the
documentary project
CITYA.M. 27 JULY 2010
Pictures: GETTY
three years ago by Goldman itself,
which has full editorial control.
Goldman is overseeing the film via its
marketing team and is only preparing
to show it to its own employees. That’s
Hollywood, Goldman style.
before it will be given the green light
to start selling down the taxpayer’s
stakes in the banks, according to gov-
ernment ministers, so perhaps the
organisation should use the down-
time to get up to speed on some sim-
ple housekeeping matters.
On checking the composition of
the senior management team on
UKFI’s official website yesterday, The
Capitalist was informed that Tim Sykes
holds the position of head of market
investments and strategy and Sam
Woods that of chief operating officer.
This despite Woods having accepted
the role of secretary of the govern-
ment’s new banking commission ear-
lier this month and Sykes having left
the building after resigning in May.
Better hop to it, pronto.
CHOC FINGERS
Perhaps Armajaro’s Anthony “Choc
Fingers” Ward should consider
upping his personal security after
snapping up seven per cent of the
world’s cocoa bean supply.
Chocolate activists have been up in
arms ever since Ward made his move,
arguing that he’s planning to hold
chocolate makers – and, by associa-
tion, seasoned chocoholics – to ran-
som by driving up the price.
Now, we’ve even got an outraged
Facebook page dedicated to his down-
fall, depicting his face superimposed
onto a cartoon pig, greedily eyeing a
trough full of chocolate. And if there’s
one thing we’ve learnt from Tony
Hayward’s debacle at BP, it’s not to
underestimate the power of public vil-
ification.
IN PEACE
week, after James Rodger
passed away from leukaemia on
Sunday.
Rodger, who tragically wel-
comed his first baby daugh-
ter into the world just a
week ago, was a market
maker at HSBC for
many years and had
recently left to join Fox-
Davies Capital later in
the summer. He will be
sorely missed by all
whose lives he touched.
CITYA.M. 27 JULY 2010
Net inflows
give a boost
to Aberdeen
▲
ASSET MANAGEMENT
BY VICTORIA BATES
ABERDEEN Asset Management saw
assets under management dip over
the third quarter of its financial year
due to weakness of the global mar-
kets, though investors found reason
to cheer in a robust flow of new busi-
ness into the firm.
Aberdeen said assets under man-
agement stood at £164.7bn at the end
of June, 3.6 per cent lower than at the
end of March, blaming the decline in
equity markets and unfavourable
exchange rates for the fall.
But the group’s shares bounced
1.66 per cent to 134.9p on the London
Stock Exchange yesterday as appetite
for the stock was whetted by strong
equity inflows and lower outflows in
fixed income.
Aberdeen raked in a total of
£11.2bn in gross new business wins
for the third quarter, compared to
just £3.4bn in the same quarter last
year.
Slowing redemptions meant that
net new business for the quarter was
positive at £0.3bn, against net out-
flows of £2.2bn in the third quarter of
2009. The firm expects to pocket
FedEx raises its full-year profit
forecast as economy rebounds
▲
SUPPORT SERVICES
FEDEX raised its full-year outlook yes-
terday due to a surge in the number
of packages flowing through its air
and ground networks, boosting its
shares and the broader market.
For the first quarter ending on 31
August FedEx raised its earnings per
share forecast to a range of $1.05 (68p)
to $1.25, up from a prior view of 85
cents to $1.05 and ahead of analysts’
estimates of $1.01.
Demand for high tech electronics
and their components out of Asia is
driving an estimated 20 per cent first-
quarter volume increase in the com-
pany’s premium “International
News 11
Hogg Robinson
Aberdeen, led by
chief executive
Martin Gilbert, has
seen a net inflow of
new business over
says it is flying high
the third quarter,
offsetting a decline
in assets under
management due
to market turmoil
It added it has lowered its operat-
▲
TRAVEL
BY STEVE DINNEEN ing costs to produce a “strong result”
for the quarter.
TRAVEL services firm Hogg Robinson The average client’s travel spend
reported brisk trading in its interim spiked 19 per cent and it expects fur-
management statement yesterday. ther gains from new corporate clients
It said sales were up six per cent on including Ernst & Young, Novartis,
2009 levels for its first three months SGS and Volkswagen.
of the financial year. It now expects its full-year results
Improving market conditions, to be in line with expectations as the
aided by the calming of the Icelandic majority of its revenue is gained in
volcano, helped the results. the second half.
£10m of extra annualised fee income
from the net inflows.
Analysts said the update was
encouraging, particularly in light of
the ongoing turbulence on the mar-
kets.
Sarah Ing at Singer Capital Markets
said: “Aberdeen is showing good
organic revenue growth and flows
will have outperformed the wider sec-
tor in equities given the firm’s global
equities expertise.”
Aberdeen said it is on course to
eliminate its short-term bank debt by
the end of the financial year, adding
that it is confident of delivering fur-
ther organic growth despite the risk
of further market volatility in the
near term.
ANALYSIS l Aberdeen Asset
145 p Management
140 134.90
26 Jul
135
130
125
120
26 Apr 17 May 7 Jun 25 Jun 15 Jul
Priority” service, which ships goods
from country to country as fast as
overnight, said spokesman Jess Bunn.
Last quarter, International Priority
volume rose 23 per cent.
With the higher forecast for its fis-
cal first quarter, FedEx now sees full-
year earnings of $4.60 per share to
$5.20 per share compared with ana-
lysts’ expectations of $4.98. Previously
it had projected $4.40 to $5.00.
Both FedEx and larger rival United
Parcel Service, the world’s largest
package delivery company, are consid-
ered proxies for global economic
health because their businesses
expand during boom times and
shrink in recessions.
 12 News
Strand founder strikes back
at legal claim over Sibir fees
▲
FINANCIAL SERVICES
BY VICTORIA BATES
ADVISERS acting for Strand Partners
founder and former chairman
Richard Fenhalls have hit back at
claims he owes the firm a share of the
£7.6m in advisory fees paid to him
last year by oil firm Sibir Energy.
Strand Partners – now named
Strand Hanson – has initiated legal
proceedings against Fenhalls to try
and reclaim a proportion of the fees,
claiming he was still with the compa-
ny when the contract with Sibir was
signed.
But Fenhalls insists that his new
company began a three-year assign-
ment with Sibir after he and Strand
parted company in April 2009.
In the end, Sibir was sold to
Russian energy giant Gazprom in
May, though a spokesman for
Fenhalls said that the $11.7m (£7.6m)
worth of fees paid to him over the two
months included $5m as an early ter-
mination payment.
“Sibir shareholders were jubilant at
the 500p a share deal that Fenhalls
negotiated with Gazprom, given that
only a few months earlier, the shares
had been worth 50p,” the spokesman
added.
“They won’t begrudge his new
company a single penny. The costs of
employing an investment bank or an
accountancy firm would have been
much more, and with less likelihood
of success.”
National Grid
upbeat after
mixed quarter
▲
ENERGY
BY MARION DAKERS
THE COUNTRY’S biggest utility firm
National Grid yesterday said it was
positive on the outlook for the year
and posted a 1.3 per cent rise in elec-
tricity transported in the first quarter.
But the UK’s power transmission
operator said gas volumes were down
by 4.6 per cent in the first three
months of the year, discounting the
effects of the cold weather on gas use,
which the firm blamed on the down-
turn and a new customer focus on
energy efficiency.
Analysts currently expect the
group to report pre-tax profit for this
year of £2.2bn, up from £1.97bn last
year.
“We are well positioned to deliver
another year of good performance,
which will underpin our targeted
eight per cent dividend growth policy
to 2012,” said chief executive Steve
Holliday. The firm also announced
the success of its £3.9bn rights issue,
which raised half a million pounds
more than first planned.
“Our rights issue will enable the
group to fund a significant increase
in UK capital investment whilst deliv-
ering attractive returns to sharehold-
Ofgem lays out plan to help power
sector hit £32bn low-carbon goal
▲
ENERGY
ENERGY regulator Ofgem yesterday
responded to parliamentary pressure
by proposing changes to its network
rules to encourage investment in the
sector, which requires £32bn to meet
low-carbon commitments.
The regulator suggested, among
other proposals, to extend price con-
trols for energy networks to eight
years from five years, giving investors
CITYA.M. 27 JULY 2010
National Grid
boss Steve
Holliday said the
firm is “well posi-
tioned” for
growth this year
Picture: Micha
Theiner/City A.M.
ers,” said Holliday.
Repairs to the gas distribution net-
work are on course, according to the
firm, with 501km of mains replace-
ment completed in the quarter. It
aims to complete more than 2,000km
of repair work this year.
In the US branch of the business,
the gas division won 7,700 new cus-
tomers in the quarter to aid on-target
annual growth of around $50m
(£32.3m).
The firm plans to sell off its New
Hampshire energy businesses, which
the company said “do not enable us
to meet long term customer needs
and earn acceptable returns”.
Shares in National Grid dipped fol-
lowing the announcement, but
closed 1.3 per cent up at 509p.
ANALYSIS l National Grid
1,250 p
509.00
1,200
26 Jul
1,150
1,100
1,050
26 Apr 17 May 7 Jun 25 Jun 15 Jul
longer return periods, and to pro-
mote incentives for companies that
perform well and foster innovation.
“Ofgem is seeking to make regula-
tion smarter by placing more empha-
sis on financial incentives to deliver
efficient innovation and investment
over a longer timescale,” Ofgem chief
executive Alistair Buchanan said of
the regulator’s new model.
Ofgem also proposed penalising
poorly performing companies.
CITYA.M. 27 JULY 2010
HMV launches an iTunes rival
CONSUMER
▲
BY JOHN DUNNE
RETAILER HMV is to taking on iTunes
with the launch of a new music
download service yesterday.
The company will challenge its
online rivals, including the American
industry leader, Apple, with a launch
promotion offering every single in
the top 40 UK chart for 40p each.
The new hmvdigital service has a
catalogue of over ten million songs.
It is compatible with any mp3 play-
er and automatically synchronises
Reckitt profit
up but warns
over growth
CONSUMER
▲
BY JOHN DUNNE
CONSUMER goods maker Reckitt
Benckiser warned of shrinking
European growth and posted its first
ever quarter-on-quarter underlying
sales dip in the region yesterday.
The British group, which makes
nearly half its sales in Europe, said
growth had virtually disappeared in
its markets there.
However, Reckitt saw a 21 per cent
rise in second quarter overall pre-tax
profit to £507m from £415m in the
same period last year. Sales were up
10 per cent.
Last week the group agreed to buy
Durex condom and Scholl sandal
maker SSL, for £2.54bn. Reckitt –
which makes Cillit Bang cleaners, Air
Wick airfresheners, Nurofen
painkillers and Finish dishwash prod-
ucts – said second quarter revenue in
Europe slipped one per cent while
operating profit was unchanged from
a similar period last year.
Chief executive Bart Becht said:
downloads with iTunes or Windows
Media Player libraries.
Users can also re-download past
purchases if they are lost – which is
not currently possible on iTunes.
However, the site crashed at one
stage yesterday with customers being
told by messages on an error page
“HMV.com is temporarily unavailable
as our servers are busy” and to “try
again in a bit later”.
A spokesman for HMV said: “We are
having a few volume-related site
issues.”
Last September HMV acquired a 50
“Six months ago we were seeing four
per cent growth in our markets in
Europe now it is below one per cent.
In Europe there is now virtually no
market growth.”
Becht added that the group had
broadly held on to its market share in
Europe but was down in fabric care
products such as Vanish.
Analyst James Edwards Jones at
broker Execution Noble said: “We
believe that competitive activity will
get more difficult in the second half
and now see significant risks to full-
year targets.”
ANALYSIS l Reckitt Benckiser
3,700 p
3,600 3,333.00
26 Jul
3,500
3,400
3,300
3,200
3,100
3,000
26 Apr 17 May 7 Jun 25 Jun
per cent stake in digital music special-
ists 7digital – the company which
powers Spotify – which helped boost
its online credentials.
Melanie Armstrong, head of music
at HMV, said: “Some people still tend
to think of us as a traditional retailer,
but the fact is we’ve completely trans-
formed our business.
“The launch of hmvdigital means
we now also have a world-class music
download platform.”
Last week the group announced it
had sealed a £240m debt re-financing
package.
EUROPEAN MARKET SLUMPS FOR CONSUMER GOODS COMPANY
The lull before the storm – cash in now
O
n the surface, Reckitt’s earn-
ings per share growth of 20
per cent, almost four per cent
ahead of what was expected is
good, but the absence of its usual
full-year profit guidance upgrade is
worrying.
Weak demand in Europe, a niggle
in the first-quarter, has now become
a full-blown crisis with the second
quarter seeing growth grind to a
halt and explains the lack of an
upgrade – customary for the past
four years.
15 Jul
Consumer News
William Hill to kick-off
new Gibraltar operation
▲
LEISURE
BOOKMAKER William Hill has said it
will establish a new telephone bet-
ting operation offshore in Gibraltar.
The company said the move was in
response to betting exchanges and
offshore telebetting operators, which
have a lighter tax burden.
Firms based offshore do not have to
pay the Horseracing Betting Levy,
which UK-based bookies have to pay
Europe generates over 40 per cent
of the group’s sales, and this quarter
where growth has dwindled to
below one per cent, marks the first
quarter-on-quarter sales decline in
the region.
The decline makes it clear that it
will be all but impossible for Reckitt
to exceed its full-year annual sales
and profit growth targets of five and
10 per cent respectively.
And the shares, which have risen
17 per cent in the past year, are now
likely due a correction.
13
in order to take bets on British races.
The firm will also close a call cen-
tre in Leeds as part of the shake-up.
William Hill chief executive Ralph
Topping said: “This significant
change to our telephone business is a
response to the challenge of compet-
ing with betting exchanges and off-
shore telebetting operators, all off
whom have benefitted from signifi-
cant cost and tax advantages over UK
bookmakers.”
£2.54bn
the amount Reckitt paid for SSL
21%
rise in overall pre-tax profits
in its second quarter
£507m
second-quarter pre-tax profit
under 1%
growth in European market
Yes, Reckitt remains relatively
cheap, currently trading on a 2010
price to earnings ratio of 15.7 times,
but the European growth that has
fuelled the shares stratospheric rise
is now firmly set on pause.
Investors should cash-in now to
avoid the likely lull, and use the cash
to invest in faster-growing rivals
such as Procter & Gamble.
BOTTOMLINE
Analysis by Katie Hope
 14 News
Knowing who is in charge is the key to success
DRAGON’S VIEW
JULIE MEYER
T
WICE in the past month, I’ve got
back in touch with businesses
with husband and wife teams at
their core. In both cases, the busi-
nesses are doing well, and my hesitan-
cy to not get involved because of the
“power knot” may have been too
strong.
A girlfriend is considering buying a
business with a friend she’s known for
20 years. As we discussed the opportu-
nity, it was clear she’s done an excel-
lent job analysing the business
opportunity, but has underestimated
the potential problems in terms of
“corporate architecture” – by which I
mean the structure of the firm in
terms of where the power and respon-
sibility really lies in the firm. Her
friend as the dominant shareholder
may not accept her as CEO because she
believes she has the power of owning
the majority of shares. In the early
days, this may not be a problem, but
down the line she may exercise her
shareholder muscles if she doesn’t get
what she wants as an executive.
Corporate architecture has a dispro-
portionate impact on a firms’ success:
Three things matter:
• Strong firms have strong CEOs.
Great CEOs serve their companies and
teams, but the team knows, that if
there is a difference of opinion, that
the CEO’s vote carries the day. The CEO
tries hard not to have these situations,
but ultimately there are always going
to be different opinions. You have to
know who’s in charge or you have
paralysis when action is required.
Witness how the Bank of England, the
FSA and the Treasury Department did
not know who was in charge at the
time of the financial crisis.
• Alignment is everything. You’d be
surprised at how frequently sharehold-
er agreements of early stage firms
enable management teams, different
classes of shareholders, and founders
to pull in different directions. I’ve seen
tragic situations where a company had
the team to become a global leading
firm but was pulled apart at the seams
by investor groups who were in charge
rather than the CEO.
• The deal is always done at the
Tullow cheers
big oil find off
Ghana coast
▲
ENERGY
BY MARION DAKERS
TULLOW OIL said yesterday it had
found a major new oil field off the
coast of Ghana, raising hopes for the
firm’s other wells in West Africa.
Tullow, the largest independent oil
explorer in Europe, said the discovery
was substantial and of excellent qual-
ity.
London-based Tullow owns a 49.95
per cent stake in the Tano licence,
which struck a significant column of
light oil in the Owo well, around
2.5km under the sea bed.
“It continues the success of
Tullow’s equatorial exploration cam-
paign in West Africa. We’re very well-
exposed to the upside in this play,”
said Tullow exploration director
Angus McCoss.
Discussions are at an advanced
stage between Tullow and its partners
in the licence, including US oil firms
Kosmos Energy and Anadarko
Petroleum, about procuring another
rig in the region.
Oriel Securities analyst Richard
Rose said the result was “unequivocal-
ly positive” and provided encourage-
Madoff trustee
could sue 1,000
▲
FINANCIAL CRIME
THE TRUSTEE overseeing the liquida-
tion of Bernard Madoff’s investment
firm might sue about 1,000 victims
whom he believes profited improper-
ly from doing business with the now-
imprisoned Ponzi schemer.
Irving Picard, the court-appointed
trustee, “could sue” about half of the
estimated 2,000 former Madoff
clients whom he considers “net win-
ners,” a spokesman said.
Picard has until December to file
such clawback lawsuits, marking the
two-year anniversary of Madoff’s 11
December, 2008 arrest and the start of
related criminal and civil proceedings.
CITYA.M. 27 JULY 2010
beginning in any relationship –
whether that be business or personal
life actually. The most you can ever do
once that relationship structure is set
is to course correct or adjust at the
edges, but you fundamentally never
renegotiate the relationship.
There are three levels of power in
any company: that of the shareholder
base, management led by the CEO,
and the board led by the chairman or
CEO as the case may be. Checks and
balances are important, but the
Hasbro boardgame, Risk, it is not.
You are on the same side.
Julie Meyer is CEO of Ariadne Capital and a
dragon on the BBC’s Online Dragon’s Den.
ment over the potential of the neigh-
bouring Tweneboa area, which
Tullow hopes will deliver oil later this
year.
Tullow said it plans to appraise the
rest of the Owo field straight away, to
determine the exact size of the
deposit found yesterday and locate
further well sites. It will update its
estimates in August.
Tullow also has operations in
Uganda, Liberia and Sierra Leone and
is planning for further expansion in
the next twelve months. Its plans in
the Democratic Republic of Congo
are on hold after authorities stripped
the firm of its exploration blocks and
handed them to smaller companies.
ANALYSIS l Tullow
1,250 p
1,200
1,238.00
26 Jul
1,150
1,100
1,050
1,000
950
26 Apr 17 May 7 Jun 25 Jun 15 Jul
CITYA.M. 27 JULY 2010 Technology and Media News 15

IBM faces competition probes Pace buys US box-maker

operating system. day. The Commission enforces EU
2Wire in a £307m deal
▲

TECHNOLOGY
The second probe, opened on the competition rules and can fine com-
BY STEVE DINNEEN European Commission’s own initia- panies that break them.
EUROPEAN Union competition regu- tive, concerns alleged discriminatory IBM rejected the allegations but The British firm, which overtook

lators launched two anti-trust investi-
gations against IBM, suspecting it of
abusing its dominant position in the
mainframe computer market.
One investigation followed com-
plaints by emulator software vendors
T3 and TurboHercules against IBM’s
practices, and focuses on the US com-
puter group’s alleged tying of main-
frame hardware to its mainframe
behaviour towards competing suppli-
ers of mainframe maintenance servic-
es. “The Commission has concerns
that IBM may have engaged in anti-
competitive practices with a view to
foreclosing the market for mainte-
nance services ... in particular by
restricting or delaying access to spare
parts for which IBM is the only
source,” said the Commission yester-
promised to cooperate fully with the
investigation.
“IBM is fully entitled to enforce its
intellectual property rights and pro-
tect the investments we have made in
our technologies,” the company said
in a statement.
It said Microsoftand its other big
competitors had inspired the
Commission’s action.
▲
TECHNOLOGY
PACE, the world’s largest set-top box
maker, has thrown down the gaunt-
let to internet TV providers by snap-
ping up US broadband technology
firm 2Wire for $475m (£307m).
The acquisition will allow it to
broaden its customer base beyond
cable and satellite into the rapidly
expanding online TV market.
Motorola to claim the top set-top box
spot, said 2Wire supplied AT&T and
the deal would catapult it to number
three in the global home-hub market.
Pace chief executive Neil Gaydon
said yesterday: “2Wire, with its
expertise in the broadband residen-
tial gateway market, will enable us to
address a full range of US operator
requirements.”

Pearson gets GOOGLE HIT BY CHINA RETREAT NEWS | IN BRIEF

EU loses in world trade row
A World Trade Organisation (WTO)
panel has ruled that the EU was wrong

digital boost to impose duties on three types of elec-

tronics products from the US and other
countries, trade sources said yesterday.
The WTO panel backed the US as well as
Japan and Taiwan in their complaint
that EU duties on flat-panel displays,
multifunction printers and television set-
top boxes violated the WTO’s
earnings per share should rise to Information Technology Agreement
▲

MEDIA
BY STEVE DINNEEN
PUBLISHER Pearson expects to see a
seven per cent spike in full-year earn-
ings after a boost from its digital serv-
ices division.
The company now says it is wholly
focused on the education aspect of its
business, with online services taking
the forefront in its expansion.
Pearson’s education business, the
world’s largest, saw a nine per cent
increase in sales and more than dou-
bled its operating profit as it gained
market share, helped by digital learn-
ing tools especially popular amid
spending cuts on books.
Chief executive Marjorie Scardino
said: “All of Pearson is now about edu-
cation. The 2010 finish line isn’t yet in
sight, but this is as good a start to our
year as I’ve seen. That boosts our con-
fidence in the full year, enabling us to
brighten our outlook and raise our
guidance.”
The group said full-year adjusted
around 70p, with underlying sales
growing seven per cent to £2.34bn.
The Financial Times owner, which
makes the vast majority of its sales in
the second half of the year, raised its
interim dividend by seven per cent to
13p per share.
It has already begun reinvesting
the proceeds in educational technolo-
gy and announced its biggest acquisi-
tion in the field outside the US last
week, with an agreement to buy part
of Sistema Educacional Brasileiro.
Pearson said it remained cautious
in the face of severe pressure on pub-
lic-sector funding in the US and else-
where, but said it expected to keep
gaining market share in education
and to sustain healthy renewal rates
at the FT Group.
In the first half of the year, the FT
group reported a seven per cent rise
in underlying sales and more than a
doubling in its operating profit as
advertising revenues returned to
growth.
(ITA). That 1996 agreement eliminated
duties among a group of 72 participat-
ing countries on goods like computer
screens and printers to promote trade in
high-tech products. But the EU argued
that added functionality meant some of
these products were now also consumer
goods not covered by the agreement
rather than information technology
products and therefore should not bene-
fit from the lower duties.
BBC warned over spending
Culture secretary Jeremy Hunt yester-
day warned the BBC must check its
spending or face losing the trust of the
public. He warned the broadcaster must
be “on the same planet as everybody
else” when it spends public money.
Speaking yesterday, he said: “As we’re
having to be very careful about every
GOOGLE’S dominant position on the global online search market slipped slightly in the penny of taxpayers money we spend, so
second quarter, as it retreated from the Chinese market. Its market share fell to 69.7 per the BBC should be very careful about
cent in the April to June quarter from 71.1 per cent in the previous three months. The the money that they spend. He also con-
biggest gainer on the global scale was China’s Baidu, the fourth-largest search provider firmed the government may axe the UK
globally, which almost caught up with Yahoo and Microsoft. Picture: REX Film Council.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Victoria Bates in association with

Deloitte
The accountancy giant has appointed Nick
Sanderson to head up its real estate corporate
finance advisory business.
Sanderson joins Deloitte as a partner from
Japanese bank Nomura, where he was a man-
aging director and head of real estate invest-
ment banking. He has also previously worked at
Lehman Brothers and UBS and has 10 years of
experience in the real estate investment bank-
ing sector.
Legal & General
The insurance group has promoted
Andrea Blance to the position of chief
risk officer, effective from August.
Blance, who will also join the group’s
executive committee, is currently group
financial controller at L&G.
KPMG
The accountancy firm’s London office
has taken on Mazyar Kotwal as a direc-
tor in its international markets team.
Kotwal, who has been seconded from
KPMG’s Mumbai office, will be working
with Ian Gomes, chairman of the firm’s
high growth markets practice, in help-
ing to assist companies in Europe seek-
ing to invest in India and vice versa.
He started his career with Arthur
Andersen in 1994 and has spent the
past six years at KPMG in India.
Matrix Group
Matrix has appointed Matthew Earl
and Tom Gadsby to its investment
banking division as analysts.
Earl covers the business service sec-
tor and joins from Charles Stanley
Securities, while Gadsby, a retail sector
specialist, was previously head of global
food retail research at Societe Generale.
Freshfields Bruckhaus Deringer
Gil Strauss is to join the law firm’s
London practice in September as a
partner in the high yield team.
Strauss is an experienced US corpo-
rate finance and securities lawyer and
joins from Simpson Thacher & Barlett.

To appear in CITYMOVES please email your career

updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
morganmckinley.com
 16 News
Singapore Air
beats forecast
with recovery
▲
AVIATION
BY HARRY BANKS
SINGAPORE Airlines, the world’s sec-
ond-largest airline by market value,
yesterday said a recovery in passenger
and freight traffic should be sustained
in the near term after posting a better-
than-expected first quarter profit.
Global airlines are recovering from
the worst downturn in aviation histo-
ry, but some analysts doubt if the
rebound can be sustained with the
Eurozone debt crisis threatening
demand for more expensive long-haul
flights.
Singapore Airlines said: “Advance
bookings indicate that the year-on-
year recovery in passenger carriage
and yields evident in the quarter to
June will hold up for the rest of 2010.”
It added: “Similarly, leading indica-
tors... suggest that recent resurgence
in air freight may be sustained in the
near-term, although the rate of
growth may abate.”
The International Air Transport
Association said this month global air-
lines will turn a $2.5bn (£1.6bn) profit
this year, swinging from the heavy
$2.8bn loss the industry group fore-
cast three months ago.
The recovery was harmed when a
volcanic eruption in Iceland caused
havoc in air travel earlier this year.
Singapore Airlines, whose competi-
tors include Australia’s Qantas and
Hong Kong-listed Cathay Pacific,
racked up costs of S$50m (£23.7m) as a
result of the disruption.
Singapore Air’s passenger yield
improved to 11.7 Singapore cents per
passenger kilometer from 10.2
Singapore cents a year ago.
Analysts said fuel costs and the sta-
bility of demand for European traffic,
a key profit area for Singapore
Airlines, would be the main issue that
investors would need to monitor for
the rest of this year.
Singapore’s flag carrier posted an
April-June net profit of S$253m, beat-
ing analysts’ forecasts of S$232m and
compared with a S$307m loss a year
ago when the airline recorded its first
quarterly loss in six years.
BEST OF THE BROKERS
ANALYSIS l Dana Petroleum
1,800 p
1,700
1,690.00
26 Jul
1,500
1,300
1,100
900
26 Apr 17 May 7 Jun 25 Jun 15 Jul
DANA PETROLEUM
Evolution Securities has given Dana
Petroleum a “sell” recommendation and
said that the Korean National Oil Company
has tabled a conditional 1,800p offer for
full issued and to be issued share capital in
Dana. Evo said that the risk for investors
could be that if Dana frustrates the
Koreans, they could walk away.
Barlows puts Halliwells into split LLP
LEGAL
▲
BARLOW LYDE & GILBERT will ring
fence lawyers moving over from
stricken law firm Halliwells into a
subsidiary LLP to protect itself against
potential claims from clients.
The move will allow Barlows to
avoid any future liabilities and claims
taken against the 19 Halliwells part-
ANALYSIS l Eurotunnel
7.5 € 5.50
26 Jul
7 150
6.5
6
5.5
5 125
26 Apr 17 May 7 Jun 25 Jun 15 Jul
EUROTUNNEL
The cross-channel truck market remains
depressed, but Eurotunnel continues to
re-take market share, according to Royal
Bank of Scotland (RBS) which gives the
group a “buy” rating. RBS said that insur-
ance indemnity receipts are stuck but
despite this, it thinks Eurotunnel still has
headroom in regard to its covenants.
To appear in Best of the Brokers email your research to notes@cityam.com
ners that will join the firm.
Incoming partners will not be
expected to contribute capital into
Barlows and will operate a separate
profit pool, a move the firm said was
a “derisking” exercise due to the
sheer speed with which the acquisi-
tion took place.
Similarly, regional firm HBJ
Gateley Wareing will place the 38
CITYA.M. 27 JULY 2010
ANALYSIS l Vodafone
155 p
151.90
26 Jul
145
140
135
130
26 Apr 17 May 7 Jun 25 Jun 15 Jul
VODAFONE
Citigroup reiterates a “buy” recommenda-
tion for Vodafone and said that the acceler-
ation in mobile data revenue is particularly
encouraging. Citi said that management
has reiterated guidance across the board,
and said that it would set out how it
intends to accelerate its strategy to drive
shareholder value later in the year.
Halliwells partners and more than
200 staff members it has acquired in
Manchester into a similar structure.
Senior partner Mike Ward said the
plan was to eventually merge the
business into the firm, but because
the deal happened so fast, staff and
client issues needed to be discussed.
“The intention is not to remain as
separate entities,” said Ward.
 Investment | Contracts for Difference
17

STRENGTH IN
EQUITIES IS Europe’s banks are at a
SURPRISING
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
crossroads after tests
Investors should be
A
FTER a shaky start, last week saw the sec-
ond quarter US earnings season come alive
and galvanise equity markets. The strong aware that plenty of
rally that began on Thursday was thanks to
better-than-expected bottom line, top line and for- stresses remain, says
ward guidance from bellwether stocks such as
Caterpillar, UPS, Microsoft and 3M. But it also Kathleen Brooks
highlighted a contradiction that is becoming
increasingly obvious – an apparent improvement in

the corporate sector against a weakening econom-
ic background. If the macro picture was improving,
we wouldn’t have heard such downbeat testimony
from Fed chairman Ben Bernanke last Wednesday
when he warned of an unusually uncertain outlook.
The disparity between the corporate outlook
and the wider economy is highlighted by the cor-
relation between equities and bonds. The yield on
the two-year Treasury has been hitting new lows
while the 10-year yield is well below 3 per cent
and fell to 2.86 per cent last Wednesday. This
means that equities and bonds are rallying at the
same time – a situation that can't carry on indefi-
nitely. Low yields typically indicate expectations of
a weak economic environment, which should
weigh on the corporate sector. Some analysts
argue that without government stimulus, equities
would be much lower while the yield curve could
be inverted if the Fed allowed the base rate to
trade at its true market level.
The strength of US stocks is also surprising
given the amount of money leaving equities and
finding its way to the bond market. For the week
ending 14 July, the Investment Company Institute
(ICI) estimates that more than $3bn left equity
funds, while $5.8bn found its way into bonds. So
while this helps to explain recent bond strength, it
is at odds with an equity rally. Year to date,
$37.5bn has left equity funds, yet the S&P is pret-
ty much unchanged from the end of 2009.
While the actions of governments and central
banks are distorting the historical correlations
between financial instruments, in time these rela-
tionships will return to normal. The question for
investors is which market to trust most, bonds or
equities?
I
F THE results of European bank stress
tests were designed to draw a line
under fears about the robustness of
the system, then they failed miserably.
The tests conducted on 91 banks across
Europe were met with a hefty dose of scep-
ticism from the investment community
after only seven banks failed and the com-
bined funding shortfall was “only” €3.5bn.
In contrast to the US, where banking
stress tests in early 2009 helped foster confi-
dence in the system and spurred an equity
market rally, Europe is unlikely to follow
suit. As Nic Clarke, a banking analyst at
Charles Stanley, the stockbroker, says:
“Ironically, the US stress tests improved
investor confidence in US banks because 10
out of 19 failed and the capital injections
required was significant so the market
then felt the problem was being fixed.” He
says the same is not true for Europe. “We
still cannot say with high conviction that
the European banking system is in fine
health, as we are not convinced that the
tests were tough enough.”
There are two main concerns with the
tests. Firstly, that banks were only tested for
an adverse scenario which had a five per
cent probability of occurring. This equates
to a one-in-20-year event. Yet the prospect of
a Greek default does not seem that remote,
especially if its austerity measures are not
enacted in a timely manner. Secondly, ana-
lysts including Clarke would have preferred
the regulators to use the core tier one capi-
tal ratio to measure the banks’ capital
strength, which includes only the most liq-
uid assets. “Overall, it will be a disappoint-
ment that many Eurozone banks have not
adopted a ‘fortress balance sheet’,” wrote
analysts at Morgan Stanley.
Going forward, investors need to be
choosy about which banks to back, accord-
Some banks like Soc Gen
are in fairly good health
Picture: GETTY
ing to Morgan Stanley. Its analysts like BNP often quote the price, which, like a bond, is
Paribas, Societe Generale, Barclays, UBS and inverse to the yield. So, if you think there
Julius Baer. In contrast, Deutsche Bank, will be a loss of confidence in the banking
Deutsche Postbank and Hypo Real Estate all system then you would need to take a short
failed to disclose their sovereign debt hold- Euribor position.
ings alongside their test results so they are While investors are still unsure what lia-
at risk of punishment by the markets. bilities exist on banks’ balance sheets,
Another way for contract-for-difference expect nervousness to abound.
(CFD) traders to make a profit from the
European banking sector is to take a view ANALYSIS l European Banking Index:
on Euribor – the European interbank performance over the last three months
3,500
offered rate – the interest rate that banks
charge to each other to lend on a short-
term basis. In normal times, it is usually 3,340
only a few basis points. However it peaks in
times of stress in the banking sector and 3,180
rose in the lead up to the test results: from
0.55 per cent on 12 July to 0.635 per cent
3,019
yesterday.
If you think that the stress tests could
raise more questions than they answered 2,859
then this could put more pressure on the
Euribor yield curve. Most CFD trading hous- 2,699
es offer quarterly Euribor contracts. They Jul 2005 Jul 2006 Jul 2007 Jul 2008 Jul 2009

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CITYA.M. 27 JULY 2010
Those with the
stomach for it
should go long
on food demand
Soft commodity prices are volatile but will
deliver long-run returns, writes Juliet Samuel
W
ELSH lamb-farmers have every
reason to celebrate as they edge
closer to signing a lucrative
export deal with China. The
deal is just another of many signs that
emerging markets’ growing demand for
hard commodities like steel and oil is
leading to a boost in demand for soft
commodities like wheat and cocoa. As
infrastructure projects boost productivi-
ty and provide jobs, the resulting wealth
is feeding consumer-led demand for
more and better food.
But traders looking to capitalise on the
trend should beware of taking punts on
soft goods – although the overall trend is
upwards, short-term fluctuations are
highly dependent on something that not
even the most seasoned investors can pre-
dict: the weather.
There have been dramatic price move-
ments in soft commodities this year, with
the price of your favourite latte in danger
of spiking on the back of jumps in coffee
and sugar. Coffee spiked to over $160 per
tonne, close to its early-2008 highs, while
sugar shot up to 30 cents per pound in
February – its highest level for around thir-
ty years. But these sweeping moves high-
light that trading on soft commodities in
the short- to medium-term is not for the
casual investor or the faint of heart.
Particularly because, as IG Index’s David
Jones points out, “by the time a major
move in a market is hitting the main-
stream press, the move is over. All cocoa
has done since it hit the news is go down”.
This means that if you come to a soft
commodities market late and want to
trade, you are better off going short than
trying to catch the tail-end of a spike.
Prices often rally upwards dramatically
and then correct downwards, sometimes
by as much as 40 per cent in a few days.
They are also increasingly following oil
prices because many nitrate fertilisers
used by modern farmers are oil-based.
GROWING POPULATION
But with the world’s population growing in
number and wealth, most analysts are bull-
ish about soft commodities over the long-
term. With interest rates so low, contracts
THE TIPSTER
EASYJET IS
SCHEDULED TO
REVEAL GOOD
QUARTER
A
LTHOUGH recent traffic figures have
revealed poor punctuality at budget
airline easyJet, the company should be
releasing its trading statement bang on
time tomorrow. EasyJet will be looking to
calm investors’ nerves and the airline appears
to have overcome the troubles faced during air
Investment | Contracts for Difference 19
for difference traders can afford to hang on
for these longer-term gains, so long as the
near-term lurches don’t scare you off.
With meat consumption in markets
such as Brazil and China on the rise – not
least Welsh lamb – the grains required to
feed the requisite animals are likely to be
in high demand. For example it takes 9.4
kilos of grain to feed enough pigs to pro-
duce one kilo of pork, and 25 kilos of
grain to feed enough cows for a kilo of
beef. Patrick Armstrong of Armstrong
Investment Managers emphasises that
this “multiplier effect” will combine
with dietary changes to drive up demand
for meat: “In 1961, Chinese meat con-
sumption was 3.8kg per person per year.
In 2008, it was 60kg,” he says.
WATCH THE SUPPLY SIDE
But even with this growing demand, it is
important to keep an eye on the supply
side of the equation. There is continuing
uncertainty as to the pace of infrastruc-
ture development, mechanisation, the
use of GM crops and other factors such as
a move towards or away from biofuels.
Investors should look at the underlying
drivers of production before choosing
where to put their money.
For example, while the excessive sugar the full advantage of the rally. One way of Growing Chinese Even taking account of this effect, how-
and coffee rallies seem to have lost mitigating this effect is to make sure meat consumption ever, rising soft commodity prices should
momentum, Barclays Capital’s your contracts are a little longer-term will boost grain prices easily justify a well-placed investment.
Sudakshina Unnikrishnan says the rise in than normal: rather than trading con- For any investor with faith in emerging
the cocoa price is due to more sustainable tracts that are on a monthly basis, buy Picture: GETTY market development, betting on demand
factors: “The cocoa story is still moderately quarterly contracts. for food makes sense.
bullish on the strength of longer-term bull-
ish factors, especially given the infrastruc- ANALYSIS l Meat consumption in the US ANALYSIS l Soft commodity and energy
tural deficiencies in the Cote d’Ivoire. compared to China prices are increasingly correlated
There is a lot of under-investment there 200 $/barrel $/tonne
kg meat/person/year Source: FAO
because there isn’t a stable political sys- 180 125
tem: cocoa trees peak after 30 years of pro- US Cocoa 3,000
160
duction and the bulk of these trees were China Crude oil
140 100 2,600
planted in the 1970s and are in decline.”
Aside from investigating supply, con- 120 2,200
75
tracts for difference traders investing in 100
1,800
soft commodities should also take 80
50
account of the contango effect. This 60 1,400
refers to the negative effect on profits
40 25 1,000
from rolling futures contracts: because
when you come to renew your contract, 20 600
Source: Bloomberg, Tradermade International
the price of a good has gone up, you have 0 0
Jul 2005 Jul 2006 Jul 2007 Jul 2008 Jul 2009 Jul 2010 Jul 2005 Jul 2006 Jul 2007 Jul 2008 Jul 2009 Jul 2010
to buy at this raised price and don’t see
travel suspensions when the volcanic ash
cloud covered the skies of Europe. Capital
broken, then we could see gold retrace to the
$1,150-$1,160 level. After breaking through
CFDs quotes a price of 426.1p-427.8p.
Credit checking agency Experian has
the 90-day exponential moving average at
$1,189 yesterday, gold found support at
enjoyed a recovery in existing established
markets such as North America as well as
$1,181, the 100-day simple moving average.
This level coincides with the 38.2 per cent
seeing new revenue growth in Latin America.
The shares have had a good 2010 so far and
Fibonacci retracement of the move from the
year’s low of $1,043 to the high of $1,265.
while the stock remains above last July’s sup-
port at 630p, a re-test of the intraday high at
Spread Co offers a spread on spot gold of
$1,183.5-$1,184.
664p is expected over the next one to two City stockbroker Seymour Pierce yesterday
recommended buying Gulfsands Petroleum
weeks. You could look to place a stop loss at
624p. Spreadex offers a September spread of following an upbeat operations update from
647.40p-651.90p on the stock. the small-cap Aim-listed oil and gas explo-
Gold has been trending sideways lately, ration company. Production in its Syria fields
oscillating around the $1,200 mark since the is particularly encouraging. Spreadex has a
beginning of July. However, it is trading close rolling spread of 292.7p-294.8p.
to some crucial support areas and if they are Jessica Mead easyJet’s trading statement is due to take-off Picture: REX
 20 Markets & Investments CITYA.M. 27 JULY 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 . . . . . . . . . . . . . . . . . . . . . . . .284.80 +1.10 314.80 246.90 COLT Group . . . . . . . . . . . . . . . .134.20 –0.90 144.20 106.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .55.35 +0.85 71.75 36.25 Schroders . . . . . . . . . . . . . . . . .1246.00 +3.00 1450.00 887.00
3i Infrastructure . . . . . . . . . . . . . 112.00 +0.60 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .566.50* +0.50 574.50 307.75 Jardine Lloyd Thompson. . . . . . .598.00 +7.00 604.50 420.70 Schroders N/V. . . . . . . . . . . . . .1039.00 +5.00 1185.00 764.00
A.B. Foods . . . . . . . . . . . . . . . .1086.00 +12.00 1086.00 767.00 Cookson . . . . . . . . . . . . . . . . . . .465.50 +3.50 616.00 292.50 Johnson Matthey . . . . . . . . . . .1703.00* +8.00 1814.00 1257.00 Scot. & Sthrn Energy. . . . . . . . . 1168.00 +9.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .134.90 +2.20 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . . 1173.00 +2.00 1203.00 536.00 Kazakhmys . . . . . . . . . . . . . . . .1203.00 +18.00 1634.00 768.00 Scottish Mortgage. . . . . . . . . . . .610.00 +5.00 623.50 420.75
Admiral. . . . . . . . . . . . . . . . . . .1506.00 +8.00 1513.00 921.00 CSR . . . . . . . . . . . . . . . . . . . . . . 411.00 +4.00 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .131.00 +1.00 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .282.80 +3.20 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . . 118.40 +1.50 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .498.40 +7.10 539.00 290.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .221.80 +1.60 255.00 196.50
Afren . . . . . . . . . . . . . . . . . . . . . .92.75 +5.25 111.00 51.75 Dana Petroleum . . . . . . . . . . . .1690.00 –16.00 1728.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .139.00 –0.40 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .569.00 +1.00 656.50 394.30
African Barr Gold . . . . . . . . . . . .550.00 –24.00 685.00 520.50 Davis Service . . . . . . . . . . . . . . .391.80 +1.80 442.30 323.25 Lancashire Hldgs . . . . . . . . . . . .539.00 — 545.00 416.70 Severn Trent . . . . . . . . . . . . . . .1283.00* –2.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1602.00 — 1639.00 524.50 De La Rue . . . . . . . . . . . . . . . . . .756.50* –18.50 1021.00 744.00 Land Securities . . . . . . . . . . . . . .616.00* +4.50 743.50 487.00 Shaftesbury . . . . . . . . . . . . . . . .403.60 +2.30 426.50 307.75
Alliance Trust . . . . . . . . . . . . . . .321.40* +3.50 352.70 281.00 Debenhams . . . . . . . . . . . . . . . . .65.00 +0.10 91.95 51.95 Legal & General . . . . . . . . . . . . . .92.45 +1.90 94.40 57.00 Shire. . . . . . . . . . . . . . . . . . . . .1475.00 +6.00 1526.00 850.00
AMEC . . . . . . . . . . . . . . . . . . . . .899.00 –4.00 909.50 684.50 Derwent London . . . . . . . . . . . .1349.00 –9.00 1490.00 906.00 Lloyds Banking Gp . . . . . . . . . . . .66.00 +2.48 75.58 45.30 SIG . . . . . . . . . . . . . . . . . . . . . . .104.50 +0.40 146.60 96.90
Amlin . . . . . . . . . . . . . . . . . . . . .428.10 +3.50 430.00 320.25 Dexion Absolute . . . . . . . . . . . . .139.70 +1.00 148.00 117.00 Logica . . . . . . . . . . . . . . . . . . . .103.60 –1.40 149.10 84.25 Smith & Nephew . . . . . . . . . . . . .546.00 –10.00 700.50 458.60
Anglo American . . . . . . . . . . . .2539.00 +16.50 3015.50 1777.50 Diageo . . . . . . . . . . . . . . . . . . . 1143.00 +11.00 1176.00 893.00 London Stk Exchange . . . . . . . . .628.50* +3.00 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .147.20 –0.80 150.20 70.00
Antofagasta . . . . . . . . . . . . . . .1014.00 +3.00 1100.00 676.00 Dimension Data . . . . . . . . . . . . .124.30 +0.70 125.50 55.00 Lonmin . . . . . . . . . . . . . . . . . . .1541.00 +16.00 2198.00 1169.00 Smiths . . . . . . . . . . . . . . . . . . . 1147.00 — 1186.00 715.00
Aquarius Platinum . . . . . . . . . . .279.00 +4.10 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .424.90* –0.70 431.30 228.40 Man . . . . . . . . . . . . . . . . . . . . . .224.60 +8.20 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .428.20 +2.10 444.60 380.60
ARM Holdings . . . . . . . . . . . . . . .346.10 –7.20 370.00 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .376.70 +3.10 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .354.20 +0.50 412.70 321.90 Spectris . . . . . . . . . . . . . . . . . . .897.50 +5.50 949.00 545.00
Arriva . . . . . . . . . . . . . . . . . . . . .771.00 — 782.50 413.50 DSG Intl . . . . . . . . . . . . . . . . . . . .27.62 +0.18 39.75 23.00 Meggitt . . . . . . . . . . . . . . . . . . . .320.50 +2.30 331.00 168.50 Spirax-Sarco Eng . . . . . . . . . . .1589.00 –12.00 1617.00 893.50
Ashmore . . . . . . . . . . . . . . . . . . .286.60 +6.10 311.20 195.00 Dunelm . . . . . . . . . . . . . . . . . . . .399.30 +8.80 438.40 250.70 Melrose . . . . . . . . . . . . . . . . . . .235.40 +0.40 251.50 109.00
Astrazeneca . . . . . . . . . . . . . . .3126.00 –20.50 3277.50 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .429.60 +3.00 499.90 271.00 Mercantile IT . . . . . . . . . . . . . . . .960.00* +14.50 1002.00 772.00 Spirent Comms . . . . . . . . . . . . . .134.60 +3.60 135.00 64.25
Atkins(Ws) . . . . . . . . . . . . . . . . .752.00 –3.00 760.50 532.50 Edinburgh Inv Tst . . . . . . . . . . . .399.60* +1.40 412.40 313.50 Michael Page Intl. . . . . . . . . . . . .404.00 –2.30 461.50 268.00 Sports Direct Intl . . . . . . . . . . . . . 115.20 –0.90 134.00 81.80
Autonomy Corp . . . . . . . . . . . .1630.00 +7.00 2012.00 1161.00 Electrocomponents . . . . . . . . . . .227.00* –2.50 245.00 142.25 Micro Focus . . . . . . . . . . . . . . . .419.80 –0.20 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . 1184.00 +7.00 1190.00 522.50
Aveva . . . . . . . . . . . . . . . . . . . .1355.00* +16.00 1365.00 755.00 EnQuest . . . . . . . . . . . . . . . . . . .106.50 +1.00 112.70 87.35 Millen & Copthorne . . . . . . . . . . .497.00 +13.60 498.10 246.50 St James’s Place . . . . . . . . . . . . .250.80 +5.10 296.90 172.25
Aviva . . . . . . . . . . . . . . . . . . . . .355.10 +5.10 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .444.70 +0.90 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .250.20 –1.60 281.70 171.00 Stagecoach. . . . . . . . . . . . . . . . .181.90 –1.70 204.90 126.20
Babcock International . . . . . . . . .597.00 –11.00 660.50 459.80 Eurasian Nat Res . . . . . . . . . . . .921.00 +7.50 1276.00 731.00 Mitchells & Butlers . . . . . . . . . . .320.90 +3.80 343.90 228.30 Standard Chartered . . . . . . . . . .1850.00 +26.00 1850.00 1310.00
BAE Systems . . . . . . . . . . . . . . .316.90 +0.40 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .593.00 +13.00 630.00 220.00 MITIE . . . . . . . . . . . . . . . . . . . . .209.10* +0.20 281.70 195.20 Standard Life . . . . . . . . . . . . . . .199.00 +2.10 237.00 170.00
Balfour Beatty . . . . . . . . . . . . . . .258.10 +1.50 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .647.00* –6.00 664.50 463.25 Mondi . . . . . . . . . . . . . . . . . . . . .450.40 +2.10 488.00 238.75 SuperGrp . . . . . . . . . . . . . . . . . .952.00 –38.00 1030.00 499.00
Barclays . . . . . . . . . . . . . . . . . . .315.65 +13.65 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .92.45* +0.45 96.80 74.50 Monks Inv Tst . . . . . . . . . . . . . . .295.00* +1.30 321.20 238.00 TalkTalk . . . . . . . . . . . . . . . . . . .123.00 +3.00 147.10 106.60
Barratt Development . . . . . . . . . .100.30 +0.10 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .292.30 +2.20 396.20 138.00 Morrison Wm . . . . . . . . . . . . . . .277.40 –0.10 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .412.30 +6.20 501.50 341.40
BBA Aviation . . . . . . . . . . . . . . .195.20 +0.20 220.00 123.50 FirstGroup . . . . . . . . . . . . . . . . .380.70* +1.20 448.80 322.75 Murray Intl Tst . . . . . . . . . . . . . . .847.00* +15.00 893.50 632.00 Tate & Lyle . . . . . . . . . . . . . . . . .468.70* –0.80 509.00 336.00
Beazley. . . . . . . . . . . . . . . . . . . .122.30 –0.20 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .279.60 +3.60 297.20 229.50 National Express. . . . . . . . . . . . .248.20 +1.20 258.60 155.86 Taylor Wimpey . . . . . . . . . . . . . . .27.22 +0.20 54.90 24.29
Bellway. . . . . . . . . . . . . . . . . . . .583.50 –3.00 927.50 554.00 Fresnillo . . . . . . . . . . . . . . . . . .1063.00 –28.00 1139.00 539.50 National Grid . . . . . . . . . . . . . . .509.00* +6.50 607.65 474.80
Berkeley . . . . . . . . . . . . . . . . . . .834.00 +1.50 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .265.80 — 285.70 208.50 Next . . . . . . . . . . . . . . . . . . . . .2202.00 +12.00 2360.00 1601.00 Telecity . . . . . . . . . . . . . . . . . . . .440.10 +3.80 458.90 300.00
BG . . . . . . . . . . . . . . . . . . . . . .1066.00 –15.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .477.00 +3.80 484.00 370.00 Northumbrian Water . . . . . . . . . .325.30 +1.00 329.20 219.90 Templeton Emrg Mkts . . . . . . . . .557.00* +2.00 598.00 390.00
BHP Billiton . . . . . . . . . . . . . . .1968.50 +4.00 2346.00 1481.00 GKN . . . . . . . . . . . . . . . . . . . . . .144.40 –0.70 155.00 90.00 Old Mutual . . . . . . . . . . . . . . . . .122.10 +3.00 127.20 85.80 Tesco . . . . . . . . . . . . . . . . . . . . .395.40 –3.45 454.90 361.20
BlackRock Mining . . . . . . . . . . . .576.00 +7.00 654.50 412.00 GlaxoSmithKline . . . . . . . . . . . . 1172.00 –15.00 1347.00 1088.00 Pace . . . . . . . . . . . . . . . . . . . . . .214.00 +26.50 243.80 145.00 Thomas Cook . . . . . . . . . . . . . . .191.20 –1.30 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .44.61 +0.61 49.50 33.00 Great Portland Estates . . . . . . . .306.20 –0.80 332.10 218.25 Partygaming . . . . . . . . . . . . . . . .249.00 +15.30 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .307.50 +0.50 314.00 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .416.95 +18.35 658.20 296.00 Greene King . . . . . . . . . . . . . . . .449.10 +3.70 504.00 372.50 Pearson . . . . . . . . . . . . . . . . . .1029.00 +56.00 1069.00 603.00 Travis Perkins . . . . . . . . . . . . . . .836.50 +11.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . . .920.50 +10.50 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .516.50* –2.00 562.50 324.00 Pennon . . . . . . . . . . . . . . . . . . . .572.50 –3.50 587.50 434.40 TUI Travel . . . . . . . . . . . . . . . . . .221.30 –0.90 313.90 202.30
British Airways . . . . . . . . . . . . . .223.60 +3.00 255.80 127.50 Halma . . . . . . . . . . . . . . . . . . . . .277.90* +0.90 298.70 184.25 Persimmon . . . . . . . . . . . . . . . . .370.30 +1.00 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .353.00 +4.00 436.20 261.20
British Amer. Tob . . . . . . . . . . .2282.50 +16.00 2335.50 1785.00 Hammerson . . . . . . . . . . . . . . . .390.70 +7.20 460.30 324.50 Petrofac . . . . . . . . . . . . . . . . . .1345.00 –8.00 1372.00 730.00 Tullow Oil . . . . . . . . . . . . . . . . .1239.00 +60.00 1375.00 970.00
British Empire Tst . . . . . . . . . . . .446.50 +6.30 467.90 338.50 Hargreaves Lansdown . . . . . . . .355.40 –3.10 387.00 209.25 Petropavlovsk . . . . . . . . . . . . . .1099.00 –1.00 1370.00 601.00 UK Commercial Prop. . . . . . . . . . .80.30 –0.30 84.90 62.25
British Land . . . . . . . . . . . . . . . .466.00* +3.50 532.00 402.00 Hays . . . . . . . . . . . . . . . . . . . . . . .93.85 –1.65 119.00 85.75 Premier Farnell . . . . . . . . . . . . . .243.20 –1.90 252.60 138.00 Ultra Electronics . . . . . . . . . . . .1666.00 +25.00 1678.00 1094.00
Britvic. . . . . . . . . . . . . . . . . . . . .500.50 –4.50 518.00 316.25 Henderson . . . . . . . . . . . . . . . . .130.00 +1.00 157.80 98.50 Premier Oil . . . . . . . . . . . . . . . .1561.00 –4.00 1610.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1928.00 –12.00 2024.00 1521.00
Brown(N.) . . . . . . . . . . . . . . . . . .237.00* –1.90 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .410.50 –1.60 587.00 368.70 Provident Financial . . . . . . . . . . .882.50 +7.00 986.00 786.00
BSkyB . . . . . . . . . . . . . . . . . . . .704.00 +2.00 732.00 512.00 Hikma Pharma . . . . . . . . . . . . . .732.00 +0.50 746.00 430.00 Prudential . . . . . . . . . . . . . . . . . .527.50 +0.50 665.00 418.25 United Utilities . . . . . . . . . . . . . .566.50* –1.00 575.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .142.20 +1.50 151.00 108.40 Hiscox . . . . . . . . . . . . . . . . . . . .351.50 +1.10 369.30 290.00 PZ Cussons . . . . . . . . . . . . . . . .360.00 –7.00 373.20 210.10 Utd Business Media . . . . . . . . . .559.50 +3.00 579.50 366.00
Bunzl . . . . . . . . . . . . . . . . . . . . .727.50 +1.00 784.50 514.00 Hochschild Mining . . . . . . . . . . .313.00 +3.00 370.60 220.00 Qinetiq . . . . . . . . . . . . . . . . . . . .129.40 –1.60 179.10 113.90 Vedanta Resources . . . . . . . . . .2442.00* –13.00 2967.00 1616.00
Burberry . . . . . . . . . . . . . . . . . . .884.00* +15.00 884.00 436.00 Home Retail . . . . . . . . . . . . . . . .242.00 +1.00 336.50 208.50 Randgold Resources. . . . . . . . .5935.00 –100.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1181.00 +13.00 1193.00 613.50
Cable & Wire Comms . . . . . . . . . .61.15* +0.15 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2330.00* –14.00 2376.00 1336.00 Reckitt Benckiser . . . . . . . . . . .3333.00 –3.00 3667.00 2686.00 Vodafone . . . . . . . . . . . . . . . . . .152.10* +1.55 153.80 117.30
Cable & Wire Wwide . . . . . . . . . . .68.85* –0.15 94.80 64.85 HSBC Hldgs . . . . . . . . . . . . . . . .649.30 +3.10 766.80 562.60 Reed Elsevier . . . . . . . . . . . . . . .534.50 –2.50 548.00 403.75 Weir . . . . . . . . . . . . . . . . . . . . .1250.00 +12.00 1260.00 524.00
Cairn Energy. . . . . . . . . . . . . . . .471.00 –2.10 485.30 306.80 Hunting . . . . . . . . . . . . . . . . . . .539.50 +6.50 659.50 395.75 Regus . . . . . . . . . . . . . . . . . . . . . .74.50 +0.50 125.50 67.50 WH Smith . . . . . . . . . . . . . . . . . .430.50 +2.00 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1632.00 +16.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .401.00* +5.90 478.30 291.70 Rentokil Initial . . . . . . . . . . . . . . .109.00 –0.50 140.20 86.75 Whitbread . . . . . . . . . . . . . . . . .1466.00 –2.00 1645.00 827.50
Capita . . . . . . . . . . . . . . . . . . . . .747.00 +7.50 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .484.90 +6.50 492.20 291.00 Rexam . . . . . . . . . . . . . . . . . . . .343.40 –3.30 348.80 222.50 William Hill . . . . . . . . . . . . . . . . .173.50 –0.60 217.80 160.50
Capital & Counties . . . . . . . . . . . 113.60 +0.70 125.40 99.60 Imagination Tech Gp . . . . . . . . . .332.50 –0.40 343.70 149.75 Rightmove . . . . . . . . . . . . . . . . .664.00 –2.00 729.00 398.75 Witan Inv Tst . . . . . . . . . . . . . . . .450.00 +5.80 487.00 356.00
Capital Shopping Centres . . . . . .351.50 +5.00 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .764.00 –2.00 786.00 314.50 Rio Tinto . . . . . . . . . . . . . . . . . .3350.00 +14.50 4104.00 2205.00 Wolseley . . . . . . . . . . . . . . . . . .1448.00 +6.00 1742.00 1155.00
Carillion . . . . . . . . . . . . . . . . . . .326.10 –1.30 361.90 246.25 Imperial Tobacco. . . . . . . . . . . .1851.00* –8.00 2159.00 1624.00 RIT Capital Partners . . . . . . . . . 1178.00 +28.00 1215.00 910.00
Carnival . . . . . . . . . . . . . . . . . .2357.00 +38.00 2937.00 1649.00 Inchcape. . . . . . . . . . . . . . . . . . .317.00 –2.80 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . .603.00 –4.00 631.50 367.75 Wood Group (John). . . . . . . . . . .369.40 –1.00 411.70 261.50
Catlin . . . . . . . . . . . . . . . . . . . . .386.00 –4.00 394.60 303.20 Informa . . . . . . . . . . . . . . . . . . . .387.60 +6.60 439.40 225.00 Rotork . . . . . . . . . . . . . . . . . . .1438.00* –13.00 1482.00 864.50 WPP . . . . . . . . . . . . . . . . . . . . . .686.50 +3.00 744.00 440.00
Centamin Egypt . . . . . . . . . . . . .158.60 +1.40 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .754.00 +11.50 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .46.67 +1.34 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . .1036.50 +2.50 1344.50 713.00
Centrica . . . . . . . . . . . . . . . . . . .312.50 –2.00 320.00 215.50 Intercontl Hotels . . . . . . . . . . . . 1199.00 +10.00 1244.00 629.00 Royal Dutch Shell A . . . . . . . . .1824.00 +4.50 2068.50 1521.50 Yell Group. . . . . . . . . . . . . . . . . . .26.75 +0.25 86.00 22.42
Charter Intl . . . . . . . . . . . . . . . . .743.00 +14.00 855.50 486.00 Intermediate Capital . . . . . . . . . .268.00* +3.00 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1750.00 +0.50 1997.50 1505.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .3066.00* –3.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1677.00 — 1745.00 1024.00 RSA Insurance . . . . . . . . . . . . . .127.00 +1.60 142.00 114.10
Chloride Group . . . . . . . . . . . . . .373.50* +0.50 390.50 130.75 Intl Power . . . . . . . . . . . . . . . . . .363.20 +0.80 365.70 243.00 SABMiller . . . . . . . . . . . . . . . . .1967.50 +4.00 2090.00 1307.00 * Ex-Dividend † Suspended
Close Bros . . . . . . . . . . . . . . . . .693.50 +6.50 806.50 660.00 Invensys . . . . . . . . . . . . . . . . . . .295.20* –1.60 350.30 234.50 Sage . . . . . . . . . . . . . . . . . . . . . .251.90 +4.70 260.50 182.70
Cobham . . . . . . . . . . . . . . . . . . .244.10 –3.50 278.60 173.20 Investec . . . . . . . . . . . . . . . . . . .512.50 +14.50 565.00 378.20 Sainsbury(J) . . . . . . . . . . . . . . . .347.80 +3.00 373.00 307.60 www.interactivedata.com


 
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Banks lead the way as resurgent FTSE Home sales and an upbeat
gives bulls a glimpse of higher plains FedEx buoy US equities
THELONDON
the sector, which had come under
pressure on Friday ahead of the
results, with Lloyds Banking Group
may rise,” said Sandy Jadeja, chief
technical analyst at City Index.
London’s blue chips rallied further
THENEW YORK stuff around for a slowing economy,”
said Stephen Massocca, managing
director of Wedbush Morgan.

REPORT and Royal Bank of Scotland up 3.9 per

cent and three per cent, respectively.
Only seven of 91 banks tested -- five
after data was released showing sales
of new US single-family homes
rebounded strongly in June from the
REPORT The Dow Jones industrial average
gained 100.81 points, or 0.97 per cent,
to 10,525.43. The Standard & Poor’s
small Spanish banks, Germany’s prior month’s record low, cooling 500 Index rose 12.35 points, or 1.12

B A
RITAIN’S top share index hit its state-rescued Hypo Real Estate and fears of a slowdow in recovery in the N upbeat outlook from FedEx, per cent, to 1,115.01. The Nasdaq
highest close in 10 weeks yester- Greece’s ATEbank -- failed to satisfy world's largest economy. BP rose 4.6 coupled with encouraging Composite Index advanced 26.96
day, led by banks after the regulators, with an overall capital percent on reports of a new boss. home sales, lifted US stocks yes- points, or 1.19 per cent, to close at
European stress tests passed shortfall of just €3.5bn (£2.9bn). terday, keeping the S&P 500 2,296.43. The gains pushed the Dow
without major incident, and as The FTSE 100 closed above its 50 ANALYSIS l FTSE above 1,100 for a second day and sug- up 0.9 per cent for the year to date
strong economic data from the US per cent Fibonacci retracement from 5,800 gesting the rally could last. and lifted the Nasdaq 1.2 per cent for
boosted investor confidence. a high in April to a low in June at 5,351.12 FedEx raised its outlook, boosting the year so far, while the S&P 500
The FTSE 100 index ended up 0.7 5,311.89 points, and also ended above 5,600 26 July its stock by 5.6 per cent. The news closed just shy of break-even.
per cent, or 38.50 points, at 5,351.12, its 200-day moving average of 5,400 from the package delivery and busi- “There is a certain psychological
its highest closing level since 13 May. 5,328.80. ness services company validates the victory there,” Massocca added.
Banks were the top performers as “As important key levels have been 5,200 optimism of those who believe the A surprising 23.6 per cent jump in
investors breathed a sigh of relief breached on the upside, the opportu- 5,000 economic recovery is less fragile than new home sales in June from May
after the European bank stress tests nity for the bulls to lift the indices recently thought. countered some disappointing data
published late on Friday unearthed higher certainly stands a good 4,800 “FedEx was very real, on top of UPS in recent weeks that had increased
no nasty surprises. chance. But there may be limits on 4,600
(last week), so if the economy is slow- concerns the economy may slip back
Barclays rose 4.5 per cent and led how much further these markets 26 Apr 17 May 7 Jun 25 Jun 15 Jul ing, people are still shipping a lot of into recession.
 London 2012
The ex-Goldman
man bringing his
banking skills to
the Olympics
Paul Deighton has raised £650m – now he
just has to sell volleyball, writes David Hellier
A
S far as many people are con-
cerned, ex-Goldman Sachs banker
Paul Deighton has quite possibly
the best job in the world. Today
he’s precisely two years away from organ-
ising the most prestigious sporting event
in the history of mankind, the Olympic
Games. And so far it’s going swimmingly
well, he says. And he’s still in the job after
four years – the comparable agency for the
Sydney games went through three chief
executives.
Sure, there’s the little problem of sell-
ing 10m tickets to often little known
sports, and yes, the Games might not be as
environmentally friendly as was once
pledged. Yes too, there are question marks
about transport and the lasting legacy and
the ticket allocation – will domestic fans
miss out to corporates and overseas visi-
tors, for example?
But the chief executive of the Local
Organising Committee of the Olympic
Games and the Paralympic Games (LoCoG)
feels things are on track. Crucially, he has
raised sponsorship money from a bunch
of corporate backers such as Lloyds Bank
and BA and now he wants to “warm peo-
ple up” for the events ahead. “Now’s the
time to plan your Games,” he says.
“Because two years will go quickly and
there are a number of ways to get
involved.” Now that the infrastructure is
two-thirds ready, Deighton’s priority is to
attract the 70,000 volunteers and 10m
ticket-holders to ensure the Games’ suc-
cess and financial viability.
POT OF MONEY
Deighton is in charge of a £2bn budget,
which is funded from the private sector
and from ticket sales. This pot of money is
for the costs of staging and hosting the
games – everything from feeding the ath-
letes, buying sports equipment, venue
overlay, technology, marketing, recruiting
and paying the workforce, and so on. Then
there’s a £9.3bn fund, which is the ODA’s
publicly funded budget to build the new
venues and infrastructure for the Games,
and for the regeneration of East London.
Deighton has already raised around
£650m of private sponsorship, a figure
he’s enormously pleased with given the
economic circumstances. “The thing I’m
most proud of is that we have raised all
this money from private sponsorship in a
market that went from credit crunch to
recession to an era dominated by deficit
reduction. To have raised a record amount
of sponsorship in those circumstances is
gravity-defying.”
As evidenced from a view out of the
windows of the Organising Committee’s
reception in Canary Wharf, the Olympic
stadium and the other venues rise some-
what majestically from the previously bar-
ren ground of East London. And they
21
| Two years to go
appear to be on time and on budget.
Deighton is now able to look ahead to
dates, in the not too distant future, when
some of the main venues will be ready to
host test events.
But the job of organising London 2012 is
not without further challenges and some
of these on first sight look different to
those he encountered at Goldman, where,
in the first phase of his career, he worked
on corporate finance deals such as the
spinning off of Vodafone from the more
defence-focused Racal or on the selling of
British Caledonian to British Airways.
For instance, of the 10m tickets that
need to be sold for the Games and the
Paralympics combined, quite a few of
those will be to watch less well known
events such as volleyball. Indeed, Deighton
tells me with a hint of trepidation, there
are 76 volleyball sessions in a venue that
holds 15,000 a time (the Earls Court arena),
which amounts to rather a large number
of seats to fill for a sport that has next to
no popular appeal in the UK. As an ex
Goldman banker, Deighton has no doubt
dealt with some complex problems, but all
the same this is a big ask.
The hope of the Olympics committee is
that people will be so desperate to take
part in the Olympic experience that they
will support the lesser known events – but
until the ticketing process begins in
earnest, there’s no knowing quite how Paul Deighton is He feels Beijing 2008 suffered from a other large cities London has an extraor-
high the demand will be. So far, the signs relaxed about the lack of support at some of its venues. “I dinarily rich transport infrastructure. In
are encouraging in that more than 1m success of the Games. think there was some political distribu- the main spectators will be able to get to
people have put their names down for the tion of tickets around the country which the Games by public transport. There’s
Just Sign Up campaign, which registers Picture: contributed to this. People living far away been £8.5bn of transport upgrades over
interest in tickets and gives those who Micha Theiner from the venues were sent tickets but the past five years which expands capaci-
have enlisted priority availability when /City A.M. many of them didn’t use them; many just ty and there are 11 different train lines
the sale process begins. stuck the tickets on the wall as souvenirs. into the Olympic Park. The system is
There have been murmurings that the We need full stadia to create a great mature and has got capacity.”
organisers will renege on their earlier atmosphere,” he says. The race to sign up volunteers is anoth-
commitment to provide a certain number A common complaint at recent sporting er thing on the organisers’ minds, with a
of affordable tickets but Deighton, who events has been the high allocation of tick- big push planned now that the two years
applied for the job after seeing an adver- ets to corporate guests who might not be to go milestone has been passed.
tisement in the Economist, is not getting as committed to the sports they are sup- Up to 70,000 volunteers are being
drawn on this and indeed reiterates that posedly watching. Too many of them sought and Deighton reckons they will
affordability and accessibility are two pre- spend the bulk of their time being enter- play a crucial role in the success of the
requisites of the sales process. tained, critics say. events. “The character of the games will be
He says his team has been fortunate to While acknowledging the importance based on the volunteers and people will
have learnt from some of the huge events of the corporate sector to the revenues the remember the Games in terms of the vol-
of the past few years, such as Beijing, the Olympics organisers must raise, Deighton unteers.”
Vancouver Winter Olympics earlier this thinks he has got the proportions right. Above all, Deighton is hoping that
year and the South African World Cup. Of the 10m tickets on sale, 75 per cent London can rise to the occasion in a man-
will go to a domestic public ballot, with ner that will have lasting effects for its
the remaining 25 per cent being split economy and its attractiveness. “Whether
CV | PAUL DEIGHTON between overseas visitors, corporates and you’re from Sunderland or Rio de Janeiro
organisers. the atmosphere in the city should create
Transport is another of the most an end to end experience that you will
EDUCATION: BA in Economics from Trinity College, Cambridge important issues ahead of the Games and remember for the whole of your life.”
CAREER: Started at the Security Pacific National Bank and Bank of already the unions are warning that they There’s little doubt that the Organising
America. He joined Goldman Sachs in 1983, and rose to be the bank’s chief have not signed any agreements on Committee has had a reasonable first four
extended services during the Olympic years and preparations appear to be well
operating officer in Europe and a member of its European Management period and upgrades to the Northern on track. But as Deighton well knows, clos-
Committee. He became a partner in 1996. He lives in central London with Line now look unlikely to happen on ing a deal is the key. And the business end
his wife Alison. He became chief executive of LoCoG in 2005. time. Deighton expects the transport sys- of this particular transaction starts
tem to hold up well. “Compared to most around now.
 22 London 2012 | Two years to go CITYA.M. 27 JULY 2010

Britain’s best chances for Olympic gold

These are the five to watch when the Games JESSICA ENNIS
Age: 24
kick off in London 2012, writes Jon Couch Sport: Athletics
Best achievement:
2009 World

I
T’S a once-in-a-lifetime chance, and
for these British sporting stars, it is
now just two years away. From diving
prodigies to record-breaking sailors,
they are Team GB’s best hopes for a medal
when the Olympic Games return to
London in 2012.
Last time out in Beijing, Britain
hoovered up 47 medals in total, including
19 golds. It was their best performance for
a century and saw them end a lofty fourth
in the medals table. Champion
But it has only further inflated expecta-
tions for a Games on home soil, so there
will be even more pressure on the shoul-
ders of our top prospects. One thing is for
sure, however: illegal substances aside,
nothing provides that extra lift to per-
formance better than competing in front
of a partisan crowd.

JASON KENNY
Age: 22
Sport: Cycling
Best achievement:
2008 Olympic Team
Sprint Champion

Pictures: REUTERS, ACTION IMAGES, PA, REX

TWO years ago, Sir Chris Hoy blasted his way
into British Olympic history with a triple gold
performance in Beijing.
Now, with the veteran Scot expected to retire
before London 2012, it could be the turn of his
young protégé Jason Kenny to make his mark.
The 22-year-old from Bolton has already
staked his claim, helping Britain to gold in the
team sprint with Hoy and Jamie Staff in
Beijing in 2008 – breaking the world record in
qualifying – and was then pipped by Hoy in
the final of the individual sprint.
Kenny’s rise to the top has been rapid to say
the least, progressing from the domestic jun-
ior series to Olympic champion in just three-
and-a-half years.
Indeed, he is living proof of the work Dave
Brailsford and his merry men have put in to
make Britain the dominant force in world
cycling.
WAS cruelly robbed of her chance at Olympic gold two years
ago when a fractured ankle ruled her out of a place on the
British team bound for Beijing. Now, however, having swept
to heptathlon gold at both the indoor and outdoor world
championships – the first British woman ever to do so –
Ennis is at the very top of her game and has some unfinished
business to attend to. With fellow Brit Kelly Sotherton and
Swede Carolina Kluft unlikely to rival her in 2012, Sheffield-
born Ennis, 24, is clearly the athlete to beat – and will take
plenty of stopping. Her personal best points tally of 6,731 to
win the 2009 World Championship in Berlin took her profile
to a whole new level, and she finished third in the BBC
Sports Personality of the Year Award. She then followed that
up with personal bests in the shot put, long jump and 800
metres to win the World Indoor Games in Doha with a
Championship record performance in the pentathlon, and
now has her sights set on emulating Denise Lewis’ success at
the 2000 Sydney Games.

BEN AINSLIE LOUIS SMITH TOM DALEY

Age: 33 Age: 21 Age: 16
Sport: Sailing Sport: Gymnastics Sport: Diving
Best achievement: Best achievement: Best achievement:
Three Olympic golds Bronze medal in 2009 Fina World
and one silver pommel horse in Champion
Beijing

AINSLIE is Britain’s most successful sailor of all time and widely
regarded as our best medal hope in 2012. He started sailing aged nine,
won his first Olympic medal – a silver in the Laser class – at the 1996
Atlanta Games 10 years later, and has conquered all since.
After snaring Laser gold in Sydney in 2000 he switched to the more
physically demanding Finn class and promptly became world champi-
on. He defended that title a record three times, won his first Finn class
gold at the 2004 Athens Games and then overcame illness and
adverse weather conditions to defend his title in China two years ago.
If a barrier to Ainslie claiming a fifth medal exists it may be his
increasing focus on his America’s Cup efforts with British outfit Team
Origin. He hasn’t raced a Finn since Beijing, but is set to in Weymouth
next month.
SMITH shot to fame two years ago in Beijing when, at the tender age
of 19, he became the first Briton to win a medal in gymnastics for 80
years. That bronze medal came after a sterling performance on the
pommel horse, which is the Peterborough pin-up’s speciality. His first
success in the event came at the 2006 Commonwealth Games, where
he won gold, and he proved that was no fluke by claiming bronze at the
World Championships in Stuttgart the following year. But he had to
settle for silver at this year’s European Artistic Gymnastics
Championships as fellow Brit Daniel Keatings snatched gold. Smith will
miss this year’s Commonwealth Games, however, after British
Gymnastics decided to withdraw its athletes from the event in India.
Chiefs were worried their stars would not have enough time to recover
for the World Championships, which will take place in October.
DESPITE just turning 16, diving champion Tom Daley has quite simply,
been there, done that. Two years ago, the Plymouth-born schoolboy
created history when, at 14 years and 81 days, he became Britain’s
youngest Olympian since 1960 when he leapt off the 10m platform
into the pool at the Beijing Games. Since then, Daley has shot to fame
as one of Britain’s best-known sporting talents and has not let anyone
down in his efforts to fulfil his huge potential. Exactly 12 months ago
this week, he leapt into the record books again by becoming the Fina
World Champion, while also shooting to No1 in the world rankings.
Ever the showman, Daley has already started work on some new dives
to showcase in London 2012, but first he has his sights set on bringing
more silverware back home, this time in the Commonwealth Games
medal, in Delhi, this October.
 24 London 2012 | Two years to go
The legacy of the
Olympics will be
a 21st century
transport system
Improvements are planned to Tubes, trains,
bikes and boats, writes Emma Sadowski
E
VERY Olympic host has a legacy.
Beijing 2008’s was clearing the pol-
lution from the city’s air so visibili-
ty was more than just a few feet,
while Athens in 2004 made significant
improvements to its infrastructure,
including the establishment of the
brand new Eleftherios Venizelos
International Airport.
But exactly how will London leave its
mark on the memories of the expected
10m visitors due to descend upon the
city two years today? One word: trans-
port. Ambitious plans aim for London to
be the first Olympics when 100 per cent
of spectators leave the cars at home and
jump onto public transport. Major
improvements to the Tube, new train
services, better walking paths, a new
cycling hire scheme and improved termi-
nals at London’s airports are all part of
the multi-billion pound plan to improve
London’s much-criticised transport
infrastructure in a way that will make it
a more navigable and attractive city way
beyond 2012.
London mayor Boris Johnson has said
that he wants to turn London into the
“best big city on earth”, and transport lies
at the heart of that desire. One central
promise is to make more use of the river,
historically London’s key transport route.
The Tower Pier is getting a facelift with an
expected 150,000 spectators to travel on
the Thames while planners also believe
that roughly 20 river taxis will carry
around 8,000 people a day,
The establishment of a new cycle hire
scheme of over 6,000 bikes across 400
docking stations and the development of
nine different walking routes connecting
various parts of the city to the Olympic
park in Stratford will also play a part. But
rail has remained the focus of the Olympic
transport plans, with expectations that 80
per cent of the Games’ spectators will
arrive at the venues by train. Major proj-
ects including Crossrail, the East London
Line and improvements to the Tube are
already underway as the 2012 deadline
approaches. The majority of a £600m
investment by the Olympic Development
30 July 2010
Launch of London
cycle hire scheme Airport improvements
LONDON 2012 OLYMPICS TIMELINE
2012
East London
cable car opens
CITYA.M. 27 JULY 2010
Authority (ODA) is already dedicated to
upgrading the North London Line, adding
new Docklands Light Railway (DLR) train
carriages and a major re-development of
the Stratford Regional station, one of the A Thames commuter boat, above; the Javelin
three main access points to the East train, left; and the London bicycle scheme, below.
London site. DLR capacity will increase by Pictures: Micha Theiner/ CITY A.M, GETTY, PA,
50 per cent once it receives 55 new car-
riages, while London’s Overground is to
receive a brand new fleet of air condi-
tioned trains with CCTV and wheelchair
bays. These projects will have a lasting
effect on London, and make the east of the
City much more attractive to business.
The high speed Javelin train service,
expected to whisk passengers from Kings
Cross to the Olympic site in seven minutes
along the High Speed 1 network will make
Stratford accessible to those coming into
King’s Cross from the north or from
Europe on Eurostar.
UPGRADES GALORE
But will it all happen? Fears remain that
cuts will damage the plans. Transport for
London (TfL) and Network Rail upgrades
are expected to exceed £389m, while costs
of improving the London Overground will
come to £326m. A huge £27m has already
been cut from the Olympic budget,
despite promises from the previous gov-
ernment that £9.325bn was ringfenced.
500 54 6,000
Despite this Peter Hendy, London’s
transport commissioner, insists that
“we’re on track to deliver all our 2012
transport upgrades and projects well
buses and coaches new trains delivered bikes will be available
ahead of the Games, including improve- will be used as to London Overground for hire across
ments to the Tube, the upgrade of the
North London Line, the re-opening of the
shuttle service 400
docking
extended East London Line and the DLR stations
extension to Stratford International.”
It’s not all smooth sailing, of course. TfL
10m 55
recently announced that the Northern
Line upgrade will not be ready by 2012.
But the good news is that an increase in
the transport budget of £5m was recently people will new carriages
okayed. So far, the desire to leave London attend the games for DLR
more navigable and more attractive to
business post-2012 remains intact. Let’s
hope the money-men continue to share
the vision.
Autumn 2010 2011
London City Autumn 2010 Autumn 2010 First air-conditioned
Jubilee Line upgrade DLR Stratford International Tubes arrive
2011
Heathrow completes the
second phase of Terminal 5
2012 2012 2012
Victoria Line Cycling route Walking route
upgrade improvements improvements
CITYA.M. 27 JULY 2010
Austerity Games can still be a triumph
The key now is to
avoid further cuts
and to shore up the
regeneration legacy,
writes David Crow
W
HEN London last hosted the
Olympic games, it was 1948. The
Allies had won the war, but
Britain’s rewards were still to
come: food was still rationed; the capital’s
streets looked like rows of broken teeth
(post-war construction was but a dream);
and there was quite simply no cash at all
to spend on stadiums or infrastructure.
When the cycling competition at Herne
Hill velodrome ran into the evening, locals
had to park their cars outside and put
their headlamps on full beam, as the
organising committee had been unable to
afford a set of floodlights.
As the capital gears up for the 2012
games, the chill winds of austerity are
upon us yet again. The aftermath of the
global financial crisis can’t be compared to
that of World War Two, but you should try
telling that to the terrified mandarins run-
ning around Whitehall; they have been
asked to cut public spending by up to
40 per cent in real terms – the
biggest fiscal squeeze in Britain’s
peacetime history. Quite what these
swingeing cuts mean for the £9.3bn
Olympics budget will remain unclear
until the Autumn, when the
Treasury must unveil a compre-
hensive spending review that will
spell out exactly which projects
are to be axed. Still, the depart-
ment of media culture and sport
(DCMS), which is responsible for
providing the £6bn or so of cen-
tral government funding, has-
n’t been offered any shelter
from cuts.
Although the official line
is “wait and see”, aides to
culture secretary Jeremy
Hunt think that it could be
too late to start clawing
money back from the
Olympics budget. One DCMS
official told City A.M. that a
lot of the money has already
been spent: “The contracts
have been signed, the stadi-
um is pretty much built –
we’re very nearly there”.
Instead, it looks like the
name of the game could be
ensuring the budget – which
has soared from £2.35bn
when London won the
games – doesn’t swell any
further. If specific
projects over-shoot,
as is the case for the
aquatics centre, savings will have to be
found elsewhere.
To its credit, the Olympic Development
Agency, which is responsible for spending
the lion’s share of the funding, has
already said it will deliver £27m of in-year
savings for 2010-11. However, critics argue
that it is unfair to make the Olympics
a sacred cow, especially if public
services are slashed and burned.
Similarly, DCMS will have to make
even deeper cuts elsewhere if the
Olympics do emerge from the com-
prehensive spending review: those
with vested interests in the arts
say that theatre, visual art
and British film might
never recover.
Advocates of anoth-
er austerity Olympics
should take heart
from the fact that
London’s games are
costing less than
London 2012 | Two years to go 25
LONDON 2012 TOTAL COST
TO THE TAXPAYER:
£9.3bn
(projected)
half of those in Beijing. However, that’s for-
getting the fact that a billion quid buys BEIJING 2008 TOTAL COST
you much more in China, with its low- TO THE TAXPAYER:
wage workforce and lax planning laws.
Still, even with the huge cost, China
claims to have turned a profit of around
$16m on its Olympics investment.
London Mayor Boris Johnson
characteristically uses Latin to
£23.5bn
describe his approach to the
games: “Citius, Altius, Fortius,
sed non carius” (for the 99.9 per
cent of us that don’t speak the
ancient language, this means
“Faster, Higher, Stronger, but not
more expensive”). The “not more
expensive” part is key: Boris does-
n’t want the cost to increase, but
he’ll fight tooth and nail to stop
proper cuts. “The progress that
is being made in the Olympic
Park is extremely impressive,
coming in on time and on budg-
et,” he told us. “So much so that if
we needed or wanted to we could
even bring the Games forward a
year and catch our competitors
off guard. There is also concern over spending that London’s Olympic things are unlikely to change when
“A great deal of hard work is exists outside the Olympics budget, which Stadium, top, and swarms of tourists descend on the capital.
being carried out to ensure sav- many see as integral to its success. Beijing’s bird’s Nest Still, it’s important to remember the cir-
ings have already been made Upgrades to the Tube network need to go Stadium, above. cumstances under which we won the
and it would be a mistake to ahead and the Crossrail project must be Culture secretary games: shortly after London’s bid emerged
take too much money out of built, City Hall says, if the Games are to Jeremy Hunt, left, and victorious, jihadist terrorists unleashed
the Olympic budget now, only run smoothly. Meanwhile, funding to help mayor of London terror on the London Underground. In
to be forced to put more back British athletes, which is doled out by Boris Johnson, below many ways, that makes the 2012 games a
in closer to the Games. Equally I Sport England and UK Sport, is an ideal left. lasting testament of the capital’s ability to
am completely committed to candidate for the chop when Treasury offi- pick itself up and carry on regardless, to
the regeneration legacy in East cials start swinging the axe. survive that assault on its way of life. It
London and it would be a false It’s oh-so British to complain about the might have to be done with less cash but,
economy to short-change the planned Olympics – the cost, the disruption – and as proved in 1948, it can be done.
investment in this.”
One sticking point could be the £1bn Public sector funding (%) Public sector funding (£)
contingency that the ODA has to play London
with. City Hall sources are worried that London
Greater Development Agency Greater Development Agency
Hunt could cut the budget by this amount
to satisfy the Treasury’s appetite for London
Authority
3% London
Authority £250m
£925m
immediate savings, but Boris is
adamant that the cushion is needed 10%
%
to absorb any unforeseen shocks.
£m
“Don’t touch the contingency,” an
aide to the Mayor said. “We can’t
say where we’re going to be at the
end.” Of course, any savings the ODA
does make will probably be returned
to government coffers after 2012,
although that could be too late
for the coalition, which wants Lottery
23%
to make a significant
amount of cuts now so it can Lottery
reduce taxes in the run up to
the 2015 election (that’s Central Government £2,175m Central Government
assuming the Con-Lib coali-
tion lasts that long).
64% £5,975m
 Lifestyle
26
Office pain that has no gain
Take simple steps to
avoid workplace
strains and stresses,
writes Timothy Barber
A
RE you sitting comfortably? If
you’re reading this at your desk, it’s
quite possible that you’re anything
but. The modern office remains a
place where back pains, repetitive strain
injury and other blights born of bad pos-
ture and worse furniture cause no end of
problems.
According to Tom Stewart, executive
chairman of ergonomics organisation
System Concepts (www.system-
concepts.com) there’s still a misunder-
standing among many managers when it
comes to office comfort. “It’s seen as a bit
touchy feely, that real people can cope and
tough it out,” he says. “But workers will get
sore backs, headaches and strain injuries
and they’ll be annoyed, and that all affects
productivity.”
According to Stewart, the biggest single
problem for office workers comes from
being too static. “We’re not designed to sit
inertly, and not moving about is actually
more tiring on the body,” he says.
Ergonomic chairs are now being designed
to make us move more (see reviews right).
But there are other steps people can take to
achieve a more comfortable working envi-
ronment.
Make sure your keyboard is at approxi-
mately elbow height when sitting. If this
means adjusting your chair upwards to the
point that your feet no longer comfortably
reach the floor, ask for a footrest so that
your whole body is supported – weight
should be spread between your feet, your
bottom and your back, and if any part is
not functioning, you’ll be hurting.
If you’re working with a laptop, make
sure you either have a separate screen to
plug it into or put it up on a pile of books
and use a separate keyboard. Hunching
over a laptop makes your neck tense up and
strains your trapezius muscle (neck and
upper back). If you’re reading a document
or an email, the tendency is to keep grip-
ping the mouse, or to sit with your fingers
hovering over the keyboard ready to type.
Resist this – let them hang down and relax
as often as possible.
Most importantly, break up your work
pattern. “Get up, move around, stare into
the distance, get some air,” says Stewart. “It
reduces stress, brings oxygen back into the
muscles, washes out toxins and relaxes you.”
LOSING YOUR HAIR?
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CITYA.M. 27 JULY 2010
| Health
FIT IN
THE CITY
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
Use Twitter to
increase your
fitness levels
TWEET WHAT YOU EAT
Yes, there really is a website and Twitter com-
munity that goes by this name. A US study of
1,700 people found that keeping a note of
what they’d eaten helped participants see
where additional calories were creeping in and
how they could deal with specific situations.
Tweetwhatyoueat (@Twye) is a Twitter-based
food diary where you can track what you’ve
eaten, keep a count of calories and add your
Picture: GETTY actual weight and goal weight. Genius.
GET FOLLOWING
My favourites for the ladies are the phenome-
nal US Shape magazine (@shapemag) and the
sexy women’s Maxitone brand
GENERATION CHAIR BY KNOLL | FROM £800 FUTU CHAIR BY HAG | FROM £300 (@MaxitoneUK) while the hands-down winner
for the guys has to be @MensFitnessMag for
“Blimey, it’s bendy,” was my first thought on sitting myself This chair from Norwegian company Hag is a streamlined, the very best workouts and motivational tips.
down in the new Generation chair, which is made by Knoll. even slight-looking affair, but in terms of the strength and SHARE YOUR SUCCESS
Knoll developed it after watching 400 hours of footage of support it offers, it’s a powerhouse. As with the Knoll chair Chronicle your weight loss or bask in your new
how people move in their it focuses on movement slimline glory by posting all your flattering pics
chairs at work. Using a rather than inertia, but the on Twitpic. Even better – share your before
material called elas- method is different. The and after pics to help keep you on track and
tomer – the stuff used chair deliberately tips you remind yourself about what you’ve achieved.
in dishwasher hingers into a more supportive pos- And it’ll help motivate your followers too.
and ski-boot straps – it ture, the surprise being that
makes leaning back, flexing that’s perfectly comfortable, UTILISE SOCIAL GROUPS
and twisting much easier. and encourages you to lean, Join a Twitter fitness community like
It’s brilliant. The flexibili- swivel and keep moving. TwitFitter to help yourself stay motivated,
ty really does make you The adjustments are far meet like-minded people and get all-important
tips on the latest exercises.
feel more free, and I felt more intuitive than your
much more disposed to average office chair – you TWEET YOUR GOALS
lean over and chat to peo- actually feel as though it Sending out tweets about your goals, be they
ple, which improves office com- fits you, like a supportive, well-made fitness or waistline-based, will really help to
munication. The colours too are really shoe. And the suave look and lack of keep you on track. Not only will support from
zingy – an office full of these in levers, knobs and outré headrest make followers help to boost your efforts, your pride
red or green would defi- for something rather smarter will want you to stick to every rule and resolu-
nitely have a different and subtler than most tion you’ve set once you’ve announced it to the
feel. ergonomic chairs. world. Bearing this is mind, keep it real: com-
Jeremy Hazlehurst Timothy Barber mitting to transforming yourself into a size
www.knoll-int.com www.hag-uk.co.uk zero by the weekend is setting yourself up for
a fall, but quitting booze for a week is easy.
OUT OF OFFICE
TIMOTHY BARBER
Left, Toby Stephens in a swaggering revolutionary who goes up
Danton’s Death. against Robespierre as he longs to rid the revo-
lution of its murderous legacy, and ends up fac-
ing the guillotine himself. Until 14 Oct, National
Theatre Olivier, Southbank, SE1 9PX. Tickets
from £10 from www.nationaltheatre.org.uk.
INTO THE HOODS
With the ever-increasing, Britain’s Got Talent-
inspired popularity of urban dance, it’s a great
moment for the return of Zoo Nation’s hip hop
take on Stephen Sondheim’s fairytale musical.
30 Jul-15 Aug, Royal Festival Hall, Southbank
DANTON’S DEATH AT THE NATIONAL Centre, SE1 8XX. Tickets from £15 at
Doesn’t Toby Stephens ever rest? Having only
just finished a run in Tom Stoppard’s play The
www.southbankcentre.co.uk.
Real Thing at The Old Vic, he’s straight into VAUXHALL MOTORS BOWLING CLUB
dishevelled hair, frock coat and the bloody Lawn bowls gets hip this weekend in Brick
purges of the French Revolution in this new pro-
duction of the play by 19th century German
writer, Georg Buchner. Stephens plays Danton,
Lane, with an afternoon mixing bowls with live
bands, DJs and cream teas. Aug 1, Brick Lane.
For tickets, go to www.vauxhallmotorsbc.co.uk
CITYA.M. 27 JULY 2010
Dreary place, bright food
An utterly charmless
setting gives way to
delightful, gutsy
French cooking
Brasserie Joel
First Floor, Park Plaza Westminster Bridge,
SE1 7UT. Tel: 020 7620 7272
FOOD hhhhi
SERVICE hhhhi
ATMOSPHERE hhiii
Cost per person without wine: £45
M
UCH has been made of the unfor-
tunate location of Brasserie Joel –
and rightly so. This new outpost
of the talented Joel Antunes,
fresh from exile in the States, sits in a mon-
strous blob of a building that looks like
some attempt at 1990s futurism. It’s shiny,
grey and on a roundabout. Bizarrely, this
structure is the Park Plaza Westminster
Bridge, and despite having views of Big Ben,
the whole place feels more like an Asian air-
port lounge than a London hotel. You can
almost feel the jetlag in the air, wafting
around the whiskey cocktails and the
laptops.
None of which paves the way for a partic-
ularly cuddly, special-treat type of dining
experience. You ride a wide escalator from
an vast, minimalist foyer into a huge first
floor with several restaurants, lounges, bars
and lots of little information stands. We
asked at one and were directed round a cor-
ner to a dark, windowless enclave: the
restaurant.
Okay, so the location is weird, the build-
ing uninviting and the room itself com-
pletely unprepossessing – the
windowlessness of it, its cramped layout
and the orange lights only augment a sense
of disorientation. Even the menu has a
sense of mild confusion about it – vague
American twitches such as a (reportedly
poor) lobster cobb and a leek salad with
“blue” cheese and candied pecans sit oddly
alongside all the foie gras.
But let’s get down to business. The food
that we ate was, in the main, luscious, rich
and delightfully flavoured. Meat flew in all
its forms. Chicken and foie gras terrine,
pork terrine and foie gras au torchon were
some examples; there was veal kidney,
WORDS BY
ZOE STRIMPEL
oxtail tortellini and lots more too. I started The dark interior of
with the foie gras au torchon, which was a Brasserie Joel.
silky-as-you-like, completely delicious wheel
of the stuff with red wine and apple jam
and toast. It perfectly answered that (some-
what rarefied) craving for a marriage of
melting, creamy pinkness with the crunch
of pale gold bread. My friend had a crab
salad that was expensive but overpowered
by mayonnaise. It could, alas, have been
tuna.
Matters entered the celestial after this
and our drab surroundings sort of faded
into oblivion. We had a mid-course of
homemade ricotta ravioli with spring veg-
etables – lovely tight parcels of milky
cheese doused in a gravy that came from
the squeaky clean, riotously coloured veg-
etables dancing around them. I did not
want this dish to end.
It was as well that it did, though, since
the fish I had next – a whole sea bass in
papillote (wrapped up in plastic as it cooks)
with prawn mousse and hollandaise was
the most butch presentation of fish I’ve
ever come across. It was as challenging as a
400g T-Bone steak, but far more fun to eat.
Two beefy layers of the fish were separated
by a filling of diced vegetables; the prawn
Whole Native Lobster & Chips
£24.50
With A Glass Of J&B NV Champagne
Celebrating Justerini & Brooks 250th Anniversary
Boisdale of Belgravia - Boisdale of Bishopsgate - The Lamb at Hindon
15 Eccleston Street,
London, SW1W 9LX
020 7730 6922
www.boisdale.co.uk
Lifestyle | Restaurant Review
mousse added a buttery seafood dimension
and the hollandaise was an outrageous
addition. At £19.50 I’d call this the best-
value fish dish in town. It was monstrous –
in a good way.
My friend’s tournedos Rossini was pure
red-meat fireworks. The discs of deep red,
crusted fillet mignon came with a faintly
sweet, butter-drenched potato cake (heav-
en) and, of course, a glistening piece of foie
gras. To eat this symphony of naughtiness
was to suspend all other attention. Indeed,
I’d brave the hotel’s lounge-style doldrums
for a mouthful of those tournedos again –
and maybe again.
Based on how delicious the meat was, I’d
also recommend the suckling pork belly
with pork feet cannelloni (how good does
that sound?) and the sweetbreads with veal
cheek. Don’t bother with dessert, though.
There was a buffoonish ice cream sundae
(without chocolate sauce, what is the
point?) at a table nearby, and my rum baba
was stale-tasting and served with a too-
small sliver of the promised roast banana.
There is much that counts against
Brasserie Joel. But in the end, what counts
for it – its cheeky, winning food – is more
important.
Subject to availability until 16th August
Swedeland Court,
202 Bishopsgate
London, EC2M 4NR
020 7283 1763
27
FOOD & BOOZE
NEWS
ZOE STRIMPEL
KARAOKE IN KENSAL RISE
Karaoke mania continues apace with the
August opening of a private room at west
London’s quirkiest gastropub, Paradise By
Way of Kensal Green. Expect a library of
7,500 classic songs, with 50 of the latest
chart hits added each month as well as
themed playlists available alongside music-
themed food and drink packages. And let’s
not forget a dress-up box, complete with
toy instruments, wigs, hats and stage
clothes – no karaoke experience is complete
without one. A personal butler ensures you
feel like rock royalty the whole night long.
Accommodates 15 and costs from £30 per
hour. 19 Kilburn Lane, W10 4AE. Tel: 020
8969 0098, www.theparadise.co.uk.
BEERHOUSE LAUNCHES....COCKTAILS
German cocktails? Doesn’t sound like the
most likely addition to London’s drinks
scene. And yet the stalwart Krauts over at
the Bavarian Beer House have gone and
launched a menu of Bavarian cocktails to
celebrate the hot weather. There’s the
Dirndl Delight (white wine, lemonade and
cherry liqueur), the Alpenyodler (dark beer,
Coke, cherry liqueur), the Fruity Folk Singer
(wheat beer, apple juice, blue curaçao) and
finally, the Bubbly Bavarian – a bottle of
Italian sparkling wine, served with ice in a
stein. £9.90 each. BB has two locations; see
www.bavarian-beerhouse.com for more
info.
VIEW FROM ABOVE: THE NEW VISTA
The exquisite rooftop bar at the Trafalgar
Hotel has been refreshed and relaunched as
Vista (right), a bar
and restaurant
with added
space for
enjoying the
views of
Big Ben,
the London
Eye and
the
National
Gallery. New
furnishings of
sleek black and
white with accents of
yellow give it an air of Mediterranean chic
and a partnership with Pommery cham-
pagne means the house’s best vintages will
be on offer. The new menu features the
likes of stuffed baby pepper with halloumi
and herbs; watermelon, tarragon and feta
salad, and an antipasti platter. The high-
lights of the cocktail list are those prepared
with English fruits, berries and herbs
grown on the roof. Now that’s summer. The
Trafalgar, Trafalgar Square, SW1A 2TS.
Tel: 020 7870 2900. www.thetrafalgar.com
Hindon near Salisbury,
Wiltshire, SP3 6DP
01747 820 573
 28 Lifestyle | TV& Games CITYA.M. 27 JULY 2010

BBC1 BBC2 ITV1 CHANNEL4 FIVE

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm CHOICE
EastEnders; BBC News
8pm Holby City
9pm New Tricks
10pm BBC News
10.25pm Regional News
10.35pm The Bionic Vet
11.05pm FILM The Mothman
Prophecies 2002; Weatherview
1.05am Sign Zone: The Edible
Garden: Planting root crops and
leafy vegetables. 1.35am Sign Zone:
Grumpy Guide to the Eighties
2.35am Sign Zone: Theo’s
Adventure Capitalists 3.35am Sign
Zone: Put Your Money Where Your
Mouth Is 4.35am-6am BBC News
6pm Live Athletics: European
Championships: The evening
session on day one at the
Olympic Stadium in Barcelona.
9pm That Mitchell and
Webb Look: Inventors
unveil the eagerly awaited
domestic jetpack.
9.30pm Shooting Stars: With
Tulisa, Brendan Cole, Chris
Kamara and John Simpson.
10pm Miranda
10.30pm Newsnight; Weather
11.20pm Victorian Pharmacy:
Re-creating an authentic
pharmacy of the 1850s and 60s.
12.20am Wild Wales
1.20am BBC News
4.35am-6am Close
6pm London Tonight
6.30pm ITV News
7pm Emmerdale
7.30pm Children’s Hospital
8pm Piers Morgan On: British
success stories in Hollywood.
Last in the series.
9pm The Bill: A widower
with two children is found
beaten to death.
10pm ITV News at Ten
10.30pm London News
10.35pm Ladette to Lady
11.35pm October Road
12.30am The Zone; ITV News
Headlines
2.30am The Jeremy Kyle Show:
Guests air their differences.
3.25am-5.30am ITV Nightscreen
6pm The Simpsons
6.30pm Hollyoaks
6pm Home and Away
6.25pm Don’t Stop Believers
TV PICK
7pm Channel 4 News 6.30pm Live from Studio Five
7.55pm 4thought.tv 7.30pm Michaela’s Zoo Babies;
8pm The Ugly Face of Beauty Five News Update
9pm CHOICE 8pm CHOICE Ship Rescue: The
The Fairy Jobmother Devon Disaster; Five News at 9
10pm Big Brother 9pm CSI: Miami
11.10pm The Inbetweeners 10pm CSI: NY
11.45pm 8 Out of 10 Cats 10.55pm Don’t Stop Believers
12.30am The Poker Lounge 11pm CSI: Crime Scene EASTENDERS
1.30am Big Brother: Live: Coverage
Investigation BBC1, 7.30PM
of events from the final series of the Abi has high hopes for her future with
11.55pm The FBI Files
show. 2.40am KOTV Boxing Weekly Darren, while Phil and Peggy learn
3.05am Beach Volleyball 4am 12.55am SuperCasino
British Formula 3 Championship 4.05am House Doctor 4.30am shocking news about Louise during a
4.30am The Grid 5am World Sport House Doctor 4.55am Animal meeting with social services.
5.30am Brain Cell: The Intelligent Rescue Squad 5.10am
Sport UK Challenge 5.55am- The New Tomorrow 5.35am-6am
6.20am The Hoobs Michaela’s Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT 3.50am Maury 4.40am 60 HISTORY DISCOVERY HOME &
SATELLITE & CABLE

4.30pm Live Twenty20 Cup
Cricket 7.30pm Live Twenty20
Cup Cricket 11pm Football’s
Greatest 11.30pm Soccer AM:
The Best Bits 12.30am
Twenty20 Cup Cricket 2.30am
Football Asia 3am Soccer AM:
The Best Bits 4am-6am
Twenty20 Cup Cricket
SKY SPORTS 2
7pm Football Asia 7.30pm Live
Greyhound Racing 10pm Poker
11pm Golfing World 12am
National Sevens Rugby 1.30am
Mountain Bike World 2am-
4am Premier League Years
SKY SPORTS 3
7pm Thinking Tackle 8pm
European Seniors Tour Golf
9pm Great Run Series 9.30pm
Football’s Greatest. The career
of Marco van Basten. 10pm
Premier League Years 12am
Thinking Tackle 1am Bowls
3am-3.30am Great Run Series
5.45pm Live Athletics 8.45pm
Athletics: Photo Finish 9.15pm
UEFA Under-19s Championship
Football 11pm Athletics 12am-
12.30am Athletics: Photo Finish
ESPN
6.45pm Russian Premier
League Football 8.30pm
Basketball: FIBA World
Magazine 9pm AFL Review
Show 10pm Russian Premier
League Review 10.30pm The
Ultimate Fighter 11.30pm
Caribbean Twenty20 Cricket
2.30am-5.30am Caribbean
Twenty20 Cricket
LIVING
7pm Bulging Brides 8pm
Britain’s Next Top Model 9pm
Dating in the Dark 10pm 16
and Pregnant 11pm Criminal
Minds 12am CSI: Crime Scene
Investigation 2am So You
Think You Can Dance 3am
The Fresh Prince of Bel-Air
Minute Makeover 5.30am-
6am Home Shopping
BBC THREE
7pm Don’t Tell the Bride 8pm
Underage and Pregnant
8.30pm Baby Beauty Queens
9pm Small Teen, Big World
10pm EastEnders 10.30pm
Mongrels 11pm Family Guy
11.45pm Small Teen, Big World
12.45am Underage and
Pregnant 1.15am Baby Beauty
Queens 1.45am The Blind Me
2.45am Mongrels 3.15am
Don’t Tell the Bride 4.15am-
5.15am Danielle Lineker – My
New Stepfamily
E4
7pm Hollyoaks 7.30pm Friends
9pm Smallville: Oliver’s past
comes back to haunt him.
10pm The Ricky Gervais Show
10.35pm The Cleveland Show
11.05pm King of the Hill 12am-
6am Big Brother: Live
7pm Ships That Changed the
HEALTH
World 8pm Britain’s X Files 7pm From Here to Maternity
9pm The Real Face of Jesus?
The Turin Shroud goes on
8pm 10 Years Younger 9pm
Raising 10 Kids: The Hayes
display. 11pm Decoding the Way 10pm Jon and Kate Plus
THE FAIRY JOBMOTHER
Past 12am Britain’s X Files 1am 8 11pm Plastic Surgery 12am
Ships That Changed the World
CHANNEL 4, 9PM
Raising 10 Kids: The Hayes Hayley Taylor heads for Langley in
2am Ancient Discoveries 3am Way 1am Jon and Kate Plus 8
Berkshire, where she helps Shakil Safir
Cities of the Underworld 4am- 2am Plastic Surgery 3am 10
commit himself to searching for a full-
5am Decoding the Past Years Younger 4am Baby Days
time job to save his family’s finances.
5am-6am Babes in the Wood
DISCOVERY
8pm How Do They Do It? SKY1
8.30pm How It’s Made 9pm 8pm Ouch! Sextuplets. Bryan
River Monsters 10pm London
and Jenny’s parenting styles
2012 Aquatics Centre clash. 9pm Fat Pets. Obese
Megabuild with James animals. 10pm House. The
Cracknell 11pm Clash of the team tackles the case of a
Dinosaurs 12am Man vs Fish special-needs teacher. 12am
with Matt Watson 1am Bear My Pet Shame 1am Border
Grylls: Born Survivor 2am Invasion USA 1.50am Oops TV SHIP RESCUE: THE DEVON
Mark Williams on the Rails 2.40am Road Wars 3.30am DISASTER FIVE, 8PM
3am Cosmic Collisions 3.50am Shear Genius 4.20am Tim How emergency services tried to
Weaponology 4.40am Gunn’s Guide to Style 5.10am- rescue the MSC Napoli, a 53,000-ton
Unsolved History 5.30am-6am 6am Are You Smarter Than a container ship that ran aground on the
How Does That Work? 10 Year Old? Devon coastline in January 2007.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
11 44 7 22 41 10 16 10
28 15
  
14 25
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above or to the left of it. 8 32
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6 Squeeze (5)
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2 Pamphlet (5)
3 Cheapskate (5)
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C L or group (5)
4 Golf course by
the sea (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters I 9 Large northern deer (3)
10 Helicopter propeller (5)
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8 Man-made (9)
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QUICK CROSSWORD 4 8 3 2 3 1 6 2
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 Sport
I can lead Britain’s Euro gold
rush, insists fit-again Ennis
▲
ATHLETICS
BY JON COUCH
JESSICA ENNIS says she’s fit and
ready to lead a Great Britain gold
rush in the European Championship,
starting today.
The 24-year-old world heptathlon
champion arrives in Barcelona as one
of Britain’s best medal hopes after
recovering from an ear infection.
Ennis has been made captain of a
British team looking to achieve a
record European showing and sur-
pass their previous best medal haul
of 18 set in Split 20 years ago.
And the glamour girl of British ath-
Time to go back to basics
ON THE GREENS WITH
SAM TORRANCE
A
FTER a desperately disappoint-
ing Seniors Open
Championship at the weekend,
it’s high time I took a rest from
the game and go back to basics.
I knew my game was struggling,
hence the three-hour trip across
Scotland to see my dad in the build-
up to Carnoustie.
letics is backing this current crop to
banish the memories of a disappoint-
ing campaign in Gothenburg four
years ago and meet UK Sport’s medal
target of 15. “Everyone’s been looking
in great shape at the track in the
holding camp in Portugal, and from
what I’ve seen we’re going to do pret-
ty well,” she said.
“We had a team meeting and I did
a speech talking about making the
most of opportunities. There’s a good
atmosphere in the camp, and we’re
ready to win some gold medals.”
Ennis herself has been given the
go-ahead to run after recovering from
an infection of the inner ear earlier
It saw me through the first day,
helping me to an opening round 69,
but from there it fell apart and I tum-
bled down the leaderboard.
I was delighted for Bernhard
Langer though, landing his first
Seniors Major after seeing off a great
performance from US Ryder Cup cap-
tain Corey Pavin.
But, as for me, it’s three weeks on
the practice greens as I look to turn
things around for my home Scottish
Open at St Andrews on 20 August.
While I’m rediscovering my game,
Langer leads a European contingent
for the US Seniors Open in Seattle –
and few would bet against the
German claiming back-to-back titles,
given the way he is playing.
On the main tour, Louis
Oosthuizen came mighty close to fol-
VILLA HOLDS TALKS WITH
UNSETTLED MILNER
CLUB INSIST CHAT WAS ‘AMICABLE’
AS MAN CITY HOVER: PAGE 31
this month, which left her so dizzy
she was unable to train.
“In Gateshead a fortnight ago I still
didn’t quite feel myself,” she
explained. “I still felt sluggish. But
out here in my sessions I feel com-
pletely different. I’ve got some good
training in. I feel like I’ve done some
good stuff out here, some good times,
so I’m feeling much better than I did
a few weeks ago.
“You can feel it when you’re in
good shape. My training has felt easi-
er, and it flows a lot better. I feel like
I’ve caught up on what I missed.”
Ennis is Britain’s best hope for gold,
but head coach Charles van
lowing up his tremendous Open suc-
cess with victory in the Scandinavian
Masters, only to make four bogeys in
a final-round 73.
Credit though to Richard S
Johnson, who became only the sec-
ond home winner in 12 years of the
tournament with a 30-foot birdie putt
on the final green for a first title in
eight years.
Next up on the Race to Dubai is the
Irish Open, which will be something
of a celebration this year as they
cheer their new golden generation.
In Padraig Harrington, Rory
McIlroy and Graeme McDowell, plus
new Ryder Cup vice-captains Darren
Clarke and Paul McGinley, Irish golf
has never had it so good, and with all
five in action at Killarney this week-
end, it promises to be a special event.
Ennis has recovered
from an ear infec-
tion which left her
unable to train.
Picture: PA
Commenee is holding out hopes for
several more of his athletes to reach
the top of the podium this week.
Welshman Dai Greene has clocked
the five fastest times by a European
in the 400m hurdles this summer,
while Mo Farah is fancied by many
for a long-distance double in the
5,000m and 10,000m.
British 800m champion Michael
Rimmer, 400m man Martin Rooney
and Andy Baddeley (1,500m) also have
outside shots of gold, while sprinter
Dwain Chambers, competing in his
fourth European Championships, will
be looking to replace the gold he lost
in 2002 after his admission of doping.
SPORT | IN BRIEF
Harbinger rated as world’s best
RACING: Harbinger has been rated as
the top horse in world racing after his
King George VI success on Saturday.
Sir Michael Stoute’s four-year-old was
handed a rating of 135 – up 13lb from
123 – after his impressive 11-length suc-
cess at Ascot.
The rating is just one pound below
that of last year’s iconic Derby winner
Sea The Stars after his final triumph in
the Prix de l’Arc de Triomphe.
Ailing Federer calls on Annacone Hants and Notts reach t20 semis
TENNIS: Roger Federer has turned to
Lawn Tennis Association coach Paul
Annacone for a “test period” in order to
rediscover his best form.
The 16-time Grand Slam winner has
slipped to third in the world rankings
after losing in the quarter-finals of the
last two Slams. Annacone, Tim Henman’s
former coach, quits as head coach of the
LTA in November.
29
Goodwood
Rip ride for
top jockey
Moore
▲
RACING
BY JON COUCH
RYAN MOORE will ride Rip van
Winkle in his bid for back-to-back vic-
tories in the Sussex Stakes at Glorious
Goodwood tomorrow.
The three-time champion jockey
takes the reigns of the Galileo colt as
he looks to emulate his Group One
success of 12 months ago.
The Aidan O’Brien-trained four-year-
old was rated the second best miler in
the world behind Goldikova at the
time, but has failed to recreate that
form so far this term after a disap-
pointing run at Royal Ascot.
But with Moore on board, in the
absence of the suspended Johnny
Murtagh, O’Brien is confident Rip van
Winkle will rediscover his winning
formula.
Standing in his way, however, is
Richard Hannon’s Canford Cliffs, who
is bidding for a third straight Group
One success after triumphing in the
Irish 2000 Guineas and St James’s
Palace Stakes, while Premio Loco steps
up to Group One status for the first
time after an impressive run at Ascot.
Meanwhile, trainer Clive Cox
believes Balthazaar’s Gift will relish
the return to seven furlongs in this
afternoon’s Betfair Cup.
The seven-year-old ran brilliantly to
finish a half-a-length second to
Finjaan in this race 12 months ago
and followed that up with an impres-
sive win in the Hungerford Stakes at
Newbury.
But due to a lack of opportunities,
he has been forced to revert to six fur-
longs so far this term and although he
has struggled for pace at the shorter
distance, Cox is happy with his condi-
tion.
“We’re delighted to get him back to
seven furlongs,” he said. “He’s run
creditably over six furlongs but seven
furlongs is his ideal trip. He ran a
super race here last year and I’m very
happy that he’s in good nick.”
Captain Kumar leads Sri Lanka
CRICKET: Kumar Sangakkara and
Tharanga Paranavitana both hit centuries
as Sri Lanka rallied to 312-2 on day one
of the second Test against India in
Colombo.
Leading 1-0 from the first Test, Sri
Lanka won the toss and began strongly
with opener Tillakaratne Dilshan making
54 before captain Sangakkara (130no)
and Paranavitana (100) continued the
charge.
CRICKET: James Vince’s 66 not out
helped Hampshire to a five-wicket win
over Warwickshire with one ball to spare
and ensured their place at the Friends
Provident t20 finals day at their home
ground of the Rose Bowl.
Joining them in the last four are
Nottonghamshire, who successfully sti-
fled Sussex to record a 13-run win in
their quarter-final at Trent Bridge.
 30 Sport CITYA.M. 27 JULY 2010

Results
CRICKET
SECOND TEST MATCH: (Colombo); Sri Lanka 312-2 (90.0
overs) (N T Paranavitana 100, T M Dilshan 54). v India.
Schumacher LOOK WHO’S BACK!

backs Ferrari
FRIENDS PROVIDENT T20 - QUARTER FINALS:
(Edgbaston); Warwickshire 153-5 v Hampshire 154-5 (J M
Vince 66no). Hampshire beat Warwickshire by 5 wickets.
(Trent Bridge); Nottinghamshire 141-9 (Yasir Arafat 4-34) v
Sussex 128-7 .Nottinghamshire beat Sussex by 13 runs.
FOOTBALL

in orders row
FRIENDLY MATCHES
Exeter.................................... 3 Bristol City.............................. 1
Stockport ........................... 0 Inverness CT.......................... 1
Wealdstone....................... 1 Dag & Red................................. 3
Whitley Bay ...................... 1 Darlington................................ 1

TODAY’S DIARY
(Football 7.45pm unless stated)
UEFA Europa League Third Qualifying Round First Leg: CSKA
win the championship.
Sofia v Cliftonville (5pm).
UEFA Champions Lge Third Qualifying Round First Leg: Dynamo FORMULA 1 “By the end of the year if you think
Kiev v AA Gent (6pm), Litex Lovech v MSK Zilina (6pm), Omonia
Nicosia v SV Red Bull Salzburg (5pm), Sparta Prague v Lech
Poznan (7.30), The New Saints FC v Anderlecht, Unirea Urziceni v
2010 you’ve lost the championship for
exactly that point you will ask your-
Zenit St Petersburg (6.30).
BY JON COUCH self, not only yourself, all the fans and
UeFA Under-19 Championship Semi Finals: Spain v England (3pm), MICHAEL SCHUMACHER has backed the journalists and so on, why didn’t
France v Croatia (6pm).
Friendly Matches: Alfreton Tn v Rotherham (7.30), Altrincham v former team Ferrari in the team you do so?”
Macclesfield, Cambridge Utd v Colchester, Curzon Ashton v Bolton orders row, which marred Sunday’s Unsurprisingly, Ferrari’s tactic
XI, Dartford v Millwall, Derby v Stoke, Forfar v Dundee (7.30), German Grand Prix. proved unpopular in the paddock with
Garforth Tn v Hartlepool, Malmo FF v Fulham (7pm), Nuneaton v
Northampton, Oxford Utd v Man Utd XI, Peterborough v Leicester, The Italian team were fined $10,000 Red Bull chief Christian Horner accus-
Port Vale v Aberdeen, Reading v Wolverhampton (8pm), SC by the FIA for asking Felipe Massa to ing them of “manipulating” the race.
Neusiedl 1919 v Arsenal (5pm), Shrewsbury v Coventry, Solihull make way for team-mate Fernando But the move has also led to calls
Moors v Burton Albion, Sutton Utd v Staines Tn, Tamworth v
Chesterfield, Walsall v Aston Villa, Woking v Brentford,
Alonso to pass and lead home a from former team owner Eddie
Workington v Darlington, York v Scunthorpe, Stevenage v Ferrari 1-2 at Hockenheim. Jordan that the rule banning team
Watford. But Schumacher, who was involved orders, which came into play follow-
ATHLETICS in a similar row at the 2002 Austrian ing the Schumacher incident at the A-
European Athletics Championships (Barcelona, Spain). Grand Prix, when he passed Ferrari 1 Ring, should be dropped.
team-mate Rubens Barrichello on the “It’s a nonsense, it should be
CRICKET
line, insists anyone else would have repealed,” said Jordan. “Every team
Second Test Match—day 2 of 5: Sri Lanka v India done the same. has to have team orders and now they
(Colombo).
“I have been criticised in the past for are just cloaked over as a guise. But
Friends Provident T20 - Quarter Finals: Essex v Lancashire
(Chelmsford). Somerset v Northamptonshire (Taunton).
exactly that and I understand 100 per fundamentally the regulators have to
cent and I would have done exactly sort that out.
Second Under 19 Test Match—day 1 of 4: England Under 19
v Sri Lanka Under 19 (Scarborough).
the same if I were in their situation,” “It has to go the world council and ENGLAND World Cup winner Jason Robinson has been tempted out of retirement by
the seven-time world champion said. it has to be signed off. Ferrari probably National League Two club Fylde next season. Flying winger Robinson, who turns 36 on
“At the end of the day what we’re thought they were above that and yes- Friday, retired from playing in 2007 and spent a 14-month spell as head coach of Sale,
SPORTS EDITOR JON COUCH here for is fighting for a champi- terday they found out that they which ended in April. He joins up again with his ex-England coach Brian Ashton, who is
email sport@cityam.com onship and there’s only one that can weren’t.” acting as a consultant for the Lancashire-based fourth-tier side. Picture: ACTION IMAGES
CITYA.M. 27 JULY 2010
Villa play hard ball in Milner
chase after ‘amicable’ talks
▲
FOOTBALL
BY FRANK DALLERES
ASTON VILLA have sent Manchester
City a hands-off message over their
pursuit of James Milner after holding
showdown talks with the England
midfielder.
Villa described discussions with the
player as “amicable” after he
returned to training yesterday for the
first time since the World Cup.
But they warned they plan to take
Milner on a pre-season trip to
Portugal tomorrow regardless of his
desire to join City.
The Eastlands side have already had
one bid of around £20m turned down
but are expected to return with an
improved offer for the 24-year-old.
“James Milner trained with the rest
of the Villa squad today at Bodymoor
Heath. He and the manager, along
with chief executive Paul Faulkner
and the player’s representative,
Matthew Buck, had an amicable con-
versation,” read a club statement.
“While James will not play in
tomorrow’s game at Walsall, he will
fly with the squad to Portugal on
Wednesday ahead of the Guadiana
Cup in which Villa will compete with
Benfica and Feyenoord this weekend.”
City manager Roberto Mancini has
admitted his frustration at what he
sees as clubs hiking up prices once
they know the Abu Dhabi-bankrolled
Real great Raul leaves door
open to England swansong
▲
FOOTBALL
BY FRANK DALLERES
REAL MADRID legend Raul insists he
could yet make a surprise switch to
the Premier League after bringing
down the curtain on his glorious
spell at the Santiago Bernabeu.
The 33-year-old, who began his
career at Real and went on to win 16
titles with the Spanish club, yesterday
denied a widely-anticipated transfer
to German outfit Schalke had already
been arranged.
“The German team is interested in
me and I have had very deep discus-
Mascherano is wanted by Inter Milan.
Villa insist Milner will join the squad on a trip to Portugal tomorrow despite uncertainty over his future.
club is interested in a player.
However he is tipped to make
another bid around the £24m mark
for Milner, which would represent a
100 per cent profit on Villa’s outlay to
Newcastle just two years ago.
Villa look ready to play the long
game, knowing that Milner has so far
sions with them,” said Raul. “In a few
days I will know whether I’ll be going
to the Bundesliga, but there are other
teams that are also interested. What
is clear is that my future lies in
Germany or England.”
Tottenham and Newcastle have
been linked with the former Spain
striker, who scored 323 goals in 741
appearances for Real, but Spurs man-
ager Harry Redknapp has played
down his interest. He said: “Raul was
a great player at Real Madrid, but I
wouldn’t think he would be a player
we would bring to Tottenham.
Financially, I don’t think it would be
▲
Picture: REUTERS
proved reluctant to put pressure on
them by declaring his intentions pub-
licly. Manager Martin O’Neill success-
fully saw off Liverpool’s interest in
Gareth Barry in 2008, turning down a
bid of £18m because he felt it was
insufficient. But he accepted last
week that Milner had “intimated” he
▲
possible to do a deal like that.”
Raul’s former Real team-mate
Ruud van Nistelrooy said yesterday he
expects the Champions League’s all-
time record goalscorer to complete
his move to Schalke.
“More and more big names are
coming here,” said Van Nistelrooy.
“Before, only Bayern [Munich] had
stars; now a lot of clubs are drawing
them. Michael Ballack is back, and
Schalke are going to sign Raul.
“For him it is a big step from
Madrid to Gelsenkirchen. But I think
he’ll do it without problems. The
move shows that he is not finished.”
Mascherano poised to quit Liverpool
as Hodgson’s powers of persuasion fail
FOOTBALL
LIVERPOOL midfielder Javier
Mascherano looks set to shatter the
fragile optimism surrounding Roy
Hodgson’s reign by quitting Anfield.
The Argentina midfielder is
thought to have been told he can
leave after holding talks with
Hodgson upon his return form holi-
day yesterday.
Mascherano is wanted by Inter
Picture: ACTION IMAGES
wanted to follow Barry to City in a
conversation that took place before
the World Cup.
Tottenham were said to be ready to
ambush any City bid for Milner, but
Spurs boss Harry Redknapp admitted
yesterday a deal for the former Leeds
trainee would be beyond his budget.
Hammers manger Grant
pledges to keep spending
FOOTBALL
WEST HAM manager Avram Grant
insists his summer spending is not
finished as he prepares for his first
season in charge at Upton Park.
Grant has already enticed German
midfielder Thomas Hitzlsperger,
French striker Frederic Piquionne and
Mexican World Cup star Pablo
Barrera to east London.
But the Israeli still hopes to land
his former Portsmouth charge Tal
Ben Haim and in-demand Nice for-
ward Loic Remy – and is adamant the
club are still in the market.
“The squad is not complete yet, we
told the players we want to make the
Milan, where Rafael Benitez, the man
who signed him for Liverpool, is now
in charge.
Hodgson succeeded in lifting the
gloom over Anfield within weeks of
replacing Benitez by signing Joe Cole
on a free transfer and persuading cap-
tain Steven Gerrard to stay.
But he appears to have been unable
to retain Mascherano, 26, and has
admitted star striker Fernando Torres
still has “issues” with the club.
Sport 31
Balotelli
closes in on
City move
FOOTBALL
▲
MARIO BALOTELLI’S agent has dis-
missed speculation the striker has
signed a deal with Manchester City –
but expects the transfer to be com-
pleted in the next couple of days.
Reports in the Italian press claimed
that the Inter Milan youngster had
already put pen to paper on a five-
year deal with the mega-rich
Eastlands club, worth an estimated
€30m (£25m), rising to €35m based on
appearances and goals.
It said the 19-year-old would link up
with his new team-mates on their pre-
season tour of the United States
tomorrow and that he could even
make his City debut against
Baltimore on Saturday.
Balotelli’s agent, Mino Raiola,
insists the rumours are not true, but
expects a development this week.
Raiola said: “Nothing has been
signed between Balotelli and
Manchester City. I doubt anything
will be in the next few days.”
Inter president Massimo Moratti,
meanwhile, says the clubs are still
apart in their valuation of the Italian
Under-21 international.
“There are contacts with
Manchester City but we must find an
agreement that satisfies us and
them,” he added. “They say that we
raised the price. No, we ask what we
think is right.”
squad as strong as we can,” said
Grant. “Even if the club are limited
with money, because we are in debt,
we know what we are doing and we
know what we want to do.
“The owners are trying to give their
best for the team so we will buy or
loan a few more players. Even if I
don’t like loans so much – most play-
ers here will be players for the long
term.”
Ben Haim could make a loan
switch after his medical revealed a
groin problem, while Remy’s club
have confirmed the 23-year-old is
interested in joining West Ham.
Grant is also in the hunt for
Argentine Milton Caraglio.
Brazilian former Arsenal midfield-
er Gilberto Silva has been mooted as a
possible replacement, but his agent
yesterday dismissed a move to
Liverpool. Portuguese ex-Chelsea man
Tiago, who is unsettled at Juventus,
has also been linked with the Reds.
Hodgson, meanwhile, faces a
dilemma over whether to use his
biggest names in Thursday’s Europa
League qualifier against Rabotnicki,
despite fitness concerns.
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