BUSINESS WITH PERSONALITY

IS THE HONEYMOON OVER FOOD PRICE

HIKES HURT
FOR DAVID CAMERON? BANK MISSES
ITS INFLATION
COALITION MARKS 100 DAYS P12 TARGET AGAIN P4
Issue 1,201 Wednesday 18 August 2010 www.cityam.com FREE

POISON PILL HITS Ex-Lehman

boss could
BHP’S $39BN BID be charged

▲
BANKING
BY STEVE DINNEEN
M&A FORMER Lehman Brothers chief Dick
▲

BY VICTORIA BATES Fuld could face civil charges as early

as this week in connection with the
CANADIAN fertiliser firm PotashCorp firm’s collapse.
yesterday snubbed a mammoth The US Securities and Exchange
$39bn (£25bn) indicative offer from Commission (SEC) is understood to be
mining giant BHP Billiton, moving organising a series of meetings with
swiftly to shield itself by invoking a big players involved with the bank
“poison pill” defence outlawed in the before its demise almost two years ago,
UK. according to reports in the US by Fox
PotashCorp, which described the News.
$130-a-share cash offer from BHP as It is understood investigators are
“grossly inadequate”, launched a especially interested in Lehman’s use
shareholder rights plan defence, giv- of controversial accounting practice
ing it the ability to issue new shares Repo 105, which can be used to artifi-
to existing shareholders for a pittance cially shore up a company’s balance
if its suitor builds up a stake of over sheet. It is also eager to discover
20 per cent in the open market. whether executives were responsible
The move will force BHP to go hos- for misleading the market about the
tile being able to first snap up a size- strength of Lehman’s assets and capi-
able stake, if it is committed to tal position in the weeks before its
launching a formal bid at the current collapse. An SEC spokesman told City
price. A.M.: “We cannot confirm or deny any
BHP’s senior management in the ongoing investigations.”
UK and Australia were last night Fuld’s attorney Patricia Hynd, of
locked in discussions over how to pro- PotashCorp CEO Bill Doyle, left and BHP’s chief executive Marius Kloppers law firm Allen & Overy, was unavail-
ceed with its offer. able for comment last night.
However, they are unlikely to be position in a strategically vital indus- Gate Entertainment imposed a 38 per suggesting investors believe that an The Lehman boss, nicknamed “the
able to bring PotashCorp’s directors try and our unparalleled future cent trigger on the shareholding of improved offer could be imminent. Gorilla” for his aggressive manner,
on board without stumping up a con- growth prospects”. billionaire bidder Carl Icahn. BHP demonstrated its commit- was questioned extensively in the
siderable amount of extra cash, after The company’s so-called sharehold- BHP Billiton’s chairman Jac Nasser ment to building up a strong position wake of the collapse, which sent
sources close to the Canadian firm er rights plan as a defence, though wrote to his PotashCorp counterpart in the potash industry earlier this shockwaves around the world and
yesterday indicated that the rejected not allowed in the UK, is common in Dallas Howe on Friday to outline the year with the C$341m (£212.1m) was blamed for exacerbating the
offer was “not even in the right ball Canada among firms protecting indicative proposal, which he argued acquisition of Athabasca Potash, a financial crisis.
park”. themselves against hostile suitors. reflected a 20 per cent premium to Toronto Stock Exchange-listed compa- Six months after the crash he is
In its rebuttal, PotashCorp, headed The last high-profile instance of the target’s closing price on the New ny with assets in the Saskatchewan understood to have told Lehman staff:
by chief executive officer Bill Doyle, such a poison pill defence being York Stock Exchange last Wednesday. province of Canada, where “I spent too much time out of the
said the $130-a-share offer “fails to implemented was last month, when But PotashCorp’s shares soared to PotashCorp is also based. office with clients and trusted other
reflect both the value of our premier independent Hollywood studio Lions well above the $140 level yesterday, DAVID HELLIER: P2 people to manage the risk. I’m sorry.”

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 2 News
BHP’s bid provokes poisonous reply
DEPUTY EDITOR’S LETTER
DAVID HELLIER
JUST as the markets were drifting into
the final few days of summer - tradi-
tionally one of the quietest times of
the year for corporate news – up pops
mining giant BHP Billiton with a near
$40bn proposal to takeover the
Canadian fertiliser and animal feed
group Potash.
Although all sorts of things are pos-
sible in these kinds of situations, it is
fair to say that since a meeting
between their top executives last
week relations between the two
groups have been far from cordial.
BHP is talking about offering $130
7th Floor, Centurion House,
24 Monument Street,
London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Lifestyle Editor Zoe Strimpel
Art Director Darren Soulsby
Pictures Alex Ridley
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Commercial Director Harry Owen
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Beam Reach 5 Business Park,
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WHAT THE OTHER PAPERS SAY THIS MORNING
CRIMINAL GANGS TARGET INSIDER
DEALING
Organised criminals in the UK are
becoming increasingly involved in
financial frauds including insider
share dealing that they see as lucra-
tive and low risk, investigators have
warned. A long-term trend of prose-
cutions in the US has shown the same
shift by crime gangs to more sophisti-
cated frauds.
FUNDING CUTS DECIMATE HORSE RACE
MEETINGS
The scale of the funding crisis in
British horseracing became clear yes-
terday after the sport’s governing
body announced plans to scrap 10 per
cent of race fixtures next season.
The British Horseracing Authority
said it would publish the 2011 fixture
list on September 23, two months
late, and that 150 fixtures would be
suspended.
a share for Potash stock, a value that
has been described as grossly inade-
quate by the Potash board.
But to make matters even more
acrimonious Potash yesterday
revealed details of a shareholder
rights plan that is automatically trig-
gered when a hostile bidder buys up
20 per cent of its stock.
Such schemes, commonly known
as poison pills, are not allowed in the
UK – one such scheme might have
helped Cadbury’s Roger Carr when he
got the knock on the door from Kraft.
The so-called Potash shareholder
rights plan, which seems designed as
much to help management keep their
jobs as it does to protect shareholders,
would have the effect of diluting a
hostile bidder’s stake and is designed
to force a bidder to pay a premium
price.
At this stage BHP has not said
where it goes from here. It has the
financing in place to fund the deal
through bank debt and analysts such
as Charles Kernot at Evolution
Eurozone debt
sales succeed
EUROPEAN ECONOMY
▲
BY MARION DAKERS
INVESTORS snapped up €1.5bn
(£1.2bn) of Irish debt at auction yester-
day, though the Dublin government
was forced to offer high yields to
tempt buyers.
The auction attracted bids of
€5.1bn yesterday, the strongest
demand in an auction so far this year,
in part due to yields far above the
German gilt benchmark.
Ireland will pay 3.62 per cent on
four year bonds and 5.38 per cent to
€1bn worth of 10 year bonds.
Eurozone counterpart Spain also
secured strong demand for its debt
sale yesterday, offloading €5.51bn of
bonds to tighten yield spreads against
German government debt.
Irish central bank governor Patrick
Honohan warned that governments
US MATCHES INDIAN CALL CENTRE
COSTS
Call centre workers are becoming as
cheap to hire in the US as they are in
India, according to the head of the
country’s largest business process
outsourcing company. High unem-
ployment levels have driven down
wages for some low-skilled outsourc-
ing services in some parts of the US,
particularly among the Hispanic pop-
ulation. At the same time, wages in
India’s outsourcing sector have risen
by 10 per cent this year.
CARGILL SOUNDS WARNING OF A
SLOW RECOVERY
Cargill, the world’s largest agricultur-
al commodities trader, on Tuesday
warned that the global recovery had
yet to gain traction as it reported a
second straight decline in annual
profit. As economists debate the mer-
its of government intervention to
avoid a double-dip recession, the com-
pany said the economic outlook was
uncertain.
Securities will cheer the group along
if it can bag this one at the right price.
But the early signs are that Potash
will be fighting hard to get a higher
price and, as ever with these deals,
BHP must be careful not to overpay.
As broker CLSA says: “this is just the
start of a long battle.”
SPLIT BANK
Whatever the minutes from the last
Bank of England meeting say today,
there is every reason to think it is
becoming harder to produce unanim-
ity amongst Bank members.
For months and months as the
economy struggled to find a way out
of recession, there was little doubt
that interest rates had to be held low
and there was a need for some loosen-
ing of monetary policy through the
method known as quantitative easing.
But last month’s record increase in
food prices has kept inflation above
three per cent and sparked warnings
that the cost of living will keep rising,
provoking concern amongst Bank
needed to convince investors they
were committed to cutting budget
deficits, even as he suggested in a
speech yesterday that the cost of the
Irish bank bailout may rise further.
“There is, for these stressed sover-
eigns, no question as to whether
national growth is best served by
bringing the public finances back
promptly to a convergent path,” he
said yesterday.
Honohan restated that Ireland was
committed to reducing its deficit to
an EU target of three per cent of GDP
by 2014.
Irish central bank boss
Patrick Honohan said
states needed to show
commitment to cutting
their budget deficits
HER NAME IS BARBIE... SUPERSPY
BARBIE?
Mattel has been accused of spying on
rival toy companies for at least 15
years in an escalation of the battle
over the popular Bratz dolls. In a fil-
ing in the Los Angeles federal court,
MGA Entertainment said that Mattel
workers, with the approval of execu-
tives, infiltrated rivals’ private show-
rooms to steal product ideas and
advertising strategies.
RSA RACES TO REASSURE CITY AFTER
ITS BID FOR AVIVA IS SCRUTINISED
RSA was racing to reassure the City
after it appeared to have used artifi-
cially high profits figures to prepare
a £5bn bid proposal for Aviva’s gener-
al insurance assets.Leading City ana-
lysts raised fears yesterday that RSA
had included profits from the RAC
roadside recovery business in its bid.
members about the threat of infla-
tion. This threat is intensified by the
imminent rise in VAT which will feed
through into the system in 2011.
Yesterday Bank governor Mervyn
King wrote another letter explaining
why the inflation rate was outside the
target agreed with the government.
King’s view is that the recent infla-
tion blip may last for a while but that
it is not being embedded in the sys-
tem.
Bank Monetary Policy Committee
member Andrew Sentance is more
anxious and has in the past voted for
a rise in interest rates.
Others are more troubled by fears
that the recovery might run out of
steam, especially when the public sec-
tor job cuts start to come into effect.
Many think they know the answer
but in truth I am not surprised that
the Bank is split and I can only see the
splits becoming more pronounced in
the months ahead.
david.hellier@cityam.com
Allister Heath is away
Hedge fund king George Soros has moved into gold
Soros shuns US equities
US ECONOMY
▲
BY MARION DAKERS
LEGENDARY investor George Soros
has slashed his investments in US
stocks including AOL, Pfizer and
Google, according to a regulatory fil-
ing yesterday.
Soros moved swathes of his fortune
into gold companies over the last
three months, as the man who bet
against the Bank of England sold off
more than 95 per cent of his stocks in
bellwether firms JP Morgan, Wal-
KRAFT PLANS MELT-PROOF CHOCOLATE
BARS
Melting Dairy Milk chocolate bars
could be a thing of the past if Kraft
Foods has its way. The US group,
which owns Cadbury, has begun
searching for hi-tech “thin film” pack-
aging for its chocolate bars to “min-
imise melting” in temperatures of up
to 40C.
HOUSE PRICE INDEXES COME UNDER
THE SPOTLIGHT
The Government has launched a
review of housing market statistics
following concerns that the different
methods used for calculating house
prices may be causing confusion. The
National Statistician has started the
review looking at the “coherence and
comparability” of the house price
indexes produced by the
Communities & Local Government
department and the Land Registry.
CITYA.M. 18 AUGUST 2010
NEWS | IN BRIEF
US to keep mortgage guarantee
The US Treasury Secretary said yester-
day the government will continue to
guarantee residential mortgages,
despite the demise of Fannie Mae and
Freddie Mac. Tim Geithner admitted at a
White House summit on the future of
the collapsed mortgage giants that the
state still has a role to play in backing
loans, in order to minimise the risk of
further housing-led recessions. The news
came as research in America suggested
that residential construction projects fell
again last month.
American Apparel in audit spat
Retail group American Apparel said yes-
terday its operating losses may result in
its breach of its debt covenant, and that
it has received a subpoena from the US
attorney’s office over changing account-
ing firms. Shares dropped by more than
25 per cent following the announce-
ment, which revealed that previous audi-
tor Deloitte told the firm its 2009
financial statements may not be reliable
when it severed ties. The company said
it may have to delist from the New York
Stock Exchange if it cannot file its finan-
cial reports with a new auditor in time.
Picture: REUTERS
Mart and Verizon.
Soros Fund Management’s largest
holding is now in a gold exchange
traded fund, making up around 13
per cent of its equity portfolio, worth
some $638m.
Soros is also likely to have moved
money from equities into govern-
ment bonds, but the US Securities
and Exchange Commission only asks
for disclosure of activity in equities.
The shift took place in a quarter
when the Standard & Poor’s equities
index fell 12 per cent.
RABOBANK'S ASIAN APPETITE GOES
BEYOND CHINA
Rabobank sees its tie-up with
Agricultural Bank of China as part of
a larger strategy to profit from Asia’s
growing appetite for foreign food, a
senior executive at the Dutch lender
said yesterday. Rabobank, an unlisted
cooperative bank with an interna-
tional food and agriculture financing
arm, teamed up with AgBank in June,
partly to help Chinese food business-
es expand overseas.
HOME DEPOT EARNINGS CLIMB 6.8PC
Home Depot’s fiscal second-quarter
profit rose 6.8 per cent, helped by a
slight increase in foot traffic in stores
and share repurchases. But most cus-
tomers are sticking with inexpensive
maintenance or repair projects,
which hurt top-line results and is
expected to keep sales growth muted
in the second half of the year.
CITYA.M. 18 AUGUST 2010 News 3

Accounting rules
The chancellor
called on his critics
to offer their own
plans for reducing
Britain’s huge

set for shake-up

Budget deficit

Picture:
REUTERS

Accounting Standards Board (IASB)

▲
ACCOUNTING
BY MARION DAKERS
CHANGES to lease accounting rules
are set to increase debt loads on com-
pany balance sheets by billions of
pounds if regulators get the go-ahead
for new measures.
The overhaul to how rented assets
appear on balance sheets is intended
to improve transparency, according to
a joint proposal by the International
and US regulators.
“Much of the estimated annual
$640bn of lease commitments fails to
appear on the balance sheet of
lessees, thereby giving a false impres-
sion of companies’ liabilities and
gearing,” said IASB chairman Sir
David Tweedie.
The rules could come into place in
2011, though they have already faced
stiff criticism in consultations.

Osborne says
austerity is
only option
spending cuts – while others say the
▲

POLITICS
BY DAVID CROW
GEORGE Osborne yesterday said he
would not shy away from ambitious
plans to slash public spending, insist-
ing the economy would fall into a tail-
spin unless Britain’s yawning deficit
is dealt with.
The chancellor was attempting to
take on critics – both in the Labour
party and in the coalition govern-
ment – who say the austerity meas-
ures could weigh on the economy’s
growth prospects.
He said: “To change course, put off
dealing with our problems, be in
denial about the scale of the deficit –
is the surest way to disaster.”
And he called on those who oppose
his plans for the biggest fiscal tighten-
ing in a generation to offer an alter-
native instead of sniping from the
sidelines.
The Labour Party, which is in the
process of electing a new leader, has
failed to present its own plan for get-
ting to grips with the deficit. Some
leadership candidates back former
chancellor Alistair Darling’s plan to
halve the deficit in four years – a strat-
egy that would have meant huge
main focus should be on shoring up
the anaemic economy.
Despite his insistence that sharp
deficit reduction is the only credible
course of action, Osborne warned
that he agreed with Bank of England
governor Mervyn King’s prediction
the recovery would be “choppy”. He
said it was unrealistic to expect a
“smooth ride” considering the scale
of the economic crisis.
The chancellor has staked his repu-
tation on maintaining the country’s
triple-A credit rating, but yesterday
Moody’s warned Britain was still at
risk of downgrade.
Osborne’s defence came as it
emerged the qualifying age for winter
fuel payments could be raised in a bid
to cut the welfare bill. Rather than
being eligible for the annual handout
at 60, people could have to wait until
they are at least 66.
Alistair Darling said
Labour had a credible
deficit reduction plan
but was not honest
about it to voters

Bramson to meet F&C following

surprise £16m share purchase
Provident saw its market value fall, is
▲

FUND MANAGEMENT
ACTIVIST investor Edward Bramson is
expected to meet with F&C Asset
Management next week after taking
a £15.6m stake in the company.
Shares in F&C soared 22 per cent to
63p after Bramson’s Sherborne vehi-
cle bought 5.2 per cent of the fund
manager’s share capital. Bramson
raised £105m for Sherborne in March
with a mandate to buy up to 29.9 per
cent of an as-yet unknown UK listed
firm that was “undervalued as a
result of operational difficulties”.
F&C, which was demoted from the
FTSE 250 index after a spell of uncer-
tainty over its ownership by Friends
unable to meet with Bramson this
week as it is in a closed period ahead
of its interim results.
Sherborne said it would increase its
holding in F&C, but not to a level
where it would have to launch a
mandatory takeover offer.
F&C is hoping to unlock value from
its share price by bolting on the oper-
ation of Thames River Capital, a
smaller Mayfair-based boutique. Until
yesterday, F&C’s paper was down 30
per cent from the start of the year.
Bramson’s turnaround experience
stretches back to the mid-1970s, when
he started Hillside Capital, one of the
first specialist private equity firms.
 4 Economic News CITYA.M. 18 AUGUST 2010

German investors downbeat Japan’s government mulls

EUROPEAN ECONOMY growth spurt. The reading, well by last week’s breathtaking growth
further policy stimulus
▲

BY HARRY BANKS below the consensus forecast for a numbers, today’s ZEW index was a
drop to 21, followed news that the good reminder that even the German
GERMAN investor morale fell in economy grew by 2.2 per cent in the economy will return to normal rather than new spending.

▲
JAPANESE ECONOMY
August to its lowest level since April second quarter – its fastest quarterly dimensions soon.” The government will start to
2009, pointing to a slowdown in expansion since reunification. The drop in expectations pointed JAPAN’S government will consider debate stimulus steps on Friday, eco-
Europe’s largest economy but no risk Reflecting the economy’s strength to slower growth ahead. “The recov- further stimulus steps, potentially nomics minister Satoshi Arai was
of it or the broader Eurozone falling after the record second quarter, a sep- ery won’t continue at this pace” said making it the first developed country quoted as saying by Jiji news agency
back into recession. arate ZEW gauge of current condi- BHF Bank economist Peter Meister. to turn to additional fiscal spending yesterday.
The ZEW think tank said yesterday tions rose to 44.3 from 14.6 in July, Capital Economics’ Jennifer since the global crisis, as a strength- The government debate may pre-
that its monthly poll of economic surpassing all forecasts. The ZEW said McKeown was more downbeat: “As ening yen threatens its faltering cede a meeting between Prime
sentiment fell to 14 from 21.2 in July, the increase was the strongest in the global demand growth slows further recovery. Minister Naoto Kan and Bank of
declining for the fourth month in a history of the indicator. and consumers remain reluctant to But the additional stimulus is Japan governor Masaaki Shirakawa,
row on concerns that a slowdown But ING’s Carsten Brzeski said: spend, the recovery is likely to be fair- expected to be relatively modest and which a government source said is
will hit Germany’s export-orientated “While some might still be inebriated ly short-lived.” is likely to involve reallocating funds expected to be held next Monday.

ANALYSIS l Contributions to the change in the annual CPI rate

Surge in food RECREATION &

CULTURE
MISCELLANEOUS
GOODS & SERVICES
CLOTHING &
FOOTWEAR TRANSPORT

prices keeps
▼0.07 ▼0.09 ▼0.11 ▼0.14
inflation high ▲0.16 ▲0.06
UK ECONOMY Henderson’s chief economist Simon
▲

BY JESSICA MEAD Ward said: “The impact on the near-

term inflation outlook is offset by the
RISING food prices offset a drop in likelihood that food price rises will
the cost of fuel in July but annual remain stronger than previously
inflation remained stubbornly above expected, given recent increases in
3 per cent in July. The strong inflation raw commodity costs.”
figures forced Bank of England gover- In his letter to Osborne, King reiter-
nor Mervyn King to pen his second ated last week’s forecast that infla-
letter of explanation to chancellor tion would remain above target until FOOD & FURNITURE &
George Osborne and to admit that the end of 2011 at the earliest and NON-ALCOHOLIC
the Monetary Policy Committee warned that there remained a signifi-
HOUSEHOLD GOODS
(MPC) had been surprised by the cant probability that he would need BEVERAGES Source: ONS

recent strength of inflation. to write further open letters.

Official figures revealed that infla- However, he still emphasised the Dear George Osborne Dear Mervyn King
tion eased slightly to 3.1 per cent role of temporary factors – the weak- The MPC's assessment is that much of the current high level of inflation As you note in your letter and in the August Inflation Report, there
can be are signifi-
thanks to expected lower petrol ening of sterling, previously high oil attributed to the increase in VAT in January 2010, past rises in oil cant uncertainties about the inflation outlook, with risks on both
prices and sides. I wel-
prices and a sharp slowdown in the prices and the VAT hike – in pushing the continued pass-through of higher import prices following the come the Committee's flexibility and commitment to move policy
depreciation in either
inflation rate for second-hand cars. inflation to its current levels. of sterling since mid-2007. The MPC's central judgement remains direction depending on how the outlook evolves. As you recognis
that these e in your
But with food prices surging 0.7 per The retail prices index (RPI) slowed effects will prove to have a temporary impact on inflation. recent Inflation Report, I believe the government has played an importan
t role
cent in July – the biggest monthly to 4.8 per cent in July from five per Inflation is now expected to remain above the two per cent target in reducing some of the downside risks to the economy.
until the
jump for two years according to the cent the previous month. The ONS end of 2011 – about a year longer than projected in May. There remains
a sig-
Office for National Statistics (ONS) – mainly attributed the sharper fall in nificant probability that I will need to write further open letters to City economists yesterday criticised Bank of England governor
you in the
annual CPI inflation rate stayed more the RPI to insurance, which has a far coming months. Mervyn King’s explanation of high inflation as far from complete
than one per cent above the Bank’s higher weight in the RPI than the If the current period of above-target inflation were to become engraine and said that the Bank is overplaying the excess capacity argu-
d in
two per cent target. Potatoes, onions CPI. The RPIX, which excludes mort- inflation expectations and this affected wages and prices, it would ment. King says that the drivers of high inflation are likely to be
be costly to
and cauliflowers were the fastest ris- gage interest payments, fell to 4.8 bring inflation back down again. temporary yet now warns that CPI will remain above two per cent
ers in price, according to the ONS. per cent. until the end of 2011 – a full two years above the Bank’s target.

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CITYA.M. 18 AUGUST 2010
RBS sells loans worth €1.4bn S&P takes Pru off credit
▲
BANKING
BY STEVE DINNEEN
ROYAL Bank of Scotland yesterday
announced it has sold around 10 per
cent of its leveraged loan book as it
continues its asset sale in the wake of
its government bailout.
The group announced it has sold a
portfolio of loans worth €1.4bn
(£1.15bn) to Intermediate Capital
Group (ICG). The bank did not release
the value of the transaction but ana-
lysts estimate a loan value to be
around 90p in the pound, making the
sale worth approximately €1.27bn.
The loans are predominantly
Gartmore hit
by departure “
of star trader
▲
FUND MANAGEMENT
BY VICTORIA BATES
GARTMORE’S chief executive yester-
day insisted that his firm has put the
sticky matter of star manager
Guillaume Rambourg’s suspension
and subsequent resignation behind
it, despite suffering heavy outflows of
investor cash over the first half of the
year.
Gartmore saw its assets under man-
agement dip by 10 per cent to £19.9bn
over the six months to end of June,
while net new business outflows over
the period stood at £1.65bn.
Chief executive Jeffrey Meyer
admitted that the investigation into
Rambourg’s conduct had been the
primary driver behind the outflows,
but said that the fallout from the
affair had peaked.
“Our business was doing very well
in the first quarter, when we were
executing the strategy we set out at
the time of our IPO,” Meyer said. “We
then had to hit the reset button in
April, but the issue is now behind us
and we are looking forward to regain-
ing our momentum.”
But Gartmore admitted it has seen
continuing redemptions since the
end of the period, with net outflows
Barclays could face prosecution after
judge derides £190m settlement offer
▲
ENFORCEMENT
BY MARION DAKERS
BARCLAYS is nervously awaiting the
outcome of a legal case in the US
today that could leave the banking
group facing criminal charges over
payments linked to countries barred
from trading with the States.
A federal judge, who will decide
whether to accept Barclays’ $298m
(£190m) offer to settle the case, called
the bank’s agreement “a sweetheart
deal” in court yesterday and asked:
European mid-market leveraged
financial loans across a diversified
range of sectors. The bank said more
than half of the portfolio is triple-A
rated and a large portion is double-A
rated.
ICG, which has €11bn under man-
agement, says it will fund the acquisi-
tion with a combination of equity
and debt.
Nitin Arora of Execution Noble said
the deal looks like good news for ICG
shareholders and should lead to
decent capital gains.
An RBS spokesman told City A.M.:
“This is further evidence of our recov-
ery story. It is part of our strategic
of £238m in July. £67m had been
pulled from its alternative funds busi-
ness as of 2 August, while the group
has already received notices of £223m
of redemptions on 1 September.
Gartmore posted a 35.7 per cent
year-on-year increase in net revenue
for the first half, to £113.2m, though
pre-tax profit halved to £25.8m.
Meyer is pessimistic about an
improvement in the volatile econom-
ic climate, predicting the Eurozone
turmoil will shift to the US over the
second half due to rising unemploy-
ment and tepid consumer spending.
But he said Gartmore would press
ahead regardless with a hiring drive,
aiming to poach new investment
teams, particularly in the US equity
long/short arena.
ANALYSIS l Gartmore Group
150 p 122.60
17 Aug
140
130
120
110
17 May 7 Jun 25 Jun 15 Jul 4 Aug
“Why isn’t the government getting
rough with these banks?”
District Judge Emmet Sullivan has
scheduled a hearing for today to
decide whether to approve the
deferred prosecution agreement
between Barclays and US prosecutors.
The case relates to transactions
worth about $500m made between
1995 and 2006, where Barclays
masked money coming into the US
from countries including Cuba, Iran,
Libya, Sudan and Myanmar.
Barclays has accepted and acknowl-
plan to reduce our leverage, which
watch after strong results
will no longer be part of our core
business moving forward.
“This sale has reopened a section of
▲
INSURANCE
the market that has been dormant
since the financial crisis and the mar- RATING agency Standard & Poor’s has
ket will no doubt be following it close- rewarded Prudential for its forecast-
ly.” beating results and better-than-
The sale takes place against a back- expected costs on the failed AIA deal
drop of asset sales at RBS, which is 84 by removing it from “credit watch”.
per cent owned by the government. S&P put the insurance giant on
Earlier this month it agreed a sale of notice in March due to concerns over
its credit-card payment processing the balance sheet strains involved in
unit to private equity firms Advent its $35.5bn (£22.8bn) pursuit of AIG’s
International and Bain Capital for Far Eastern arm.
£1.7bn. It also sold 318 of its branches Yesterday it took Prudential off neg-
to Santander. ative watch, citing the FTSE 100 com-
ANALYST VIEWS: WHAT DOES THE FUTURE HOLD FOR GARTMORE
NOW THAT ITS STAR PORTFOLIO MANAGER HAS LEFT? Interviews by Simon Warner
KEITH BAIRD | ORIEL SECURITIES
In my view, Rambourg wasn’t Gartmore’s star trader – Roger Guy is the real star. With
regard to the future, there is still scope for future outflows because of the whole debacle, though
they are tapering off somewhat and that’s a good sign.
PETER HOWARD | EDISON INVESTMENT RESEARCH
“ It is very difficult to quantify the future impact of the affair on the company. Gartmore itself
will not incur a penalty, but clear indications of a recovery in investor sentiment are needed before
the group can play to its strengths and show consistent growth in assets under management.
BRUCE HAMILTON | MORGAN STANLEY
“
There are some signs that asset outflows are stabilising, which is encouraging. I think
investors are looking for more positivity, more convincing that growth is coming back to the business.
But for us, that’s probably more likely to be a 2011 event.
GUILLAUME The subsequent uncertainty sur-
RAMBOURG rounding the fund manager weighed
sharply on its already-deflated share
EX-PORTFOLIO price, sending it plummeting to only
MANAGER AT just above half its December debut
level of 217p.
GARTMORE Rambourg, along with his colleague
Roger Guy, had been responsible for
around a fifth of Gartmore’s assets
GARTMORE must be sick of the name under management and as much as a
Guillaume Rambourg. The firm’s initial third of its revenue stream, prompting
investigation into the conduct of its fears over the impact on the firm of
top-performing portfolio manager such a significant personnel loss.
resulted in his suspension, after the Rambourg was later reinstated at
probe found he had breached company the firm, though in a reduced-capacity
rules by directing trades to specific role as an analyst. But in a further
brokers instead of allowing a separate twist to the saga, he resigned last
team to allocate trades. month to concentrate on a Financial
NEWS | IN BRIEF
Melrose reports profits surge
Scottish oil and gas producer Melrose
Resources increased first half pre-tax
profit by 32 per cent. The firm posted a
$26.2m (£16.7m) profit compared with
$19.8m in the first half of 2009. Revenue
edged its actions, which prosecutors increased 13 per cent to $110m from
say were in breach of the Trading $97.5m, largely driven by a steady rise in
with the Enemy Act and the oil prices. The group, which has opera-
International Emergency Economic tions in Turkey, Romania and Egypt, said
Powers Act. it is continuing the development of its
Credit Suisse, Lloyds TSB and ABN recent discoveries in the Bulgarian
AMRO have all settled similar cases in waters of the western Black Sea, and
recent months. expects production to follow in October.
It is the second time in a week It also said it was confident of achieving
Obama’s government has suffered its production view of 40,000 barrels of
criticism over deals cut with banks, oil equivalent per day for 2010. Earnings
after a judge refused to settle per share for the half year were 3.5p,
Citigroup’s $75m case concerning more than double the earnings in the
subprime mortgages on Monday. prior year period.
News 5
pany’s above-consensus £968m first
half operating profit and lightened
£388m charge for advisers on AIA.
S&P analysts wrote: “We believe
Prudential’s very strong financial per-
formance over the past year is indica-
tive of its strong risk management
and operational delivery.”
But S&P said it was still “mindful”
of what it described as “manage-
ment’s heightened risk tolerance in
strategy execution, as evidenced by
Prudential’s decision to pursue the
AIA acquisition”.
”
”
”
Services Authority investigation into
his conduct.
“I have been faced with a challeng-
ing set of circumstances which has
resulted in me not being able to opti-
mally fulfil my duties in the best inter-
ests of shareholders and investors,”
Rambourg said at the time.
However, despite the damaging con-
sequences of the affair on Gartmore’s
business, investors were yesterday
hopeful that his departure has now
drawn a line under the matter. As a
member of Gartmore’s management
put it: Investors do not like uncertainty,
which is precisely the factor removed
from the equation once Rambourg
walked out of the door.
Flight Options out of business
Budget travel firm Flight Options ceased
trading last night, affecting more than
70,000 holidaymakers who had trips
booked with the firm. The Civil Aviation
Authority (CAA) said that approximately
13,000 Britons abroad through the com-
pany, mostly through its biggest flight
operator Kiss Flights, will get home as
normal. Those with Flight Options book-
ings up to 6pm today will still be able to
leave, after which time other operators
will step in, according to the CAA. The
company operated flights to Greece,
Egypt, Turkey and the Canary Islands,
and is the third budget travel firm to go
bust in the last month. The demise of
Goldtrail and Sun4U has left hundreds of
thousands of holidaymakers out of pock-
et until Atol refunds arrive.
 6 News
Cowdery eyes
third project
as profits leap
▲
INSURANCE
BY OLIVER SHAH
ENTREPRENEUR Clive Cowdery has
begun sounding out potential sellers
of assets for a third consolidation
project after Resolution beat expecta-
tions with a £139m first-half profit.
Cowdery, who banked a fortune of
millions of pounds from the first
incarnation of his insurance buyout
vehicle, has held talks with both open
and closed life companies in the
Eurozone and the US. The news will
fuel speculation the current
Resolution is close to making its final
acquisition, likely to be an insurer
with an asset management arm.
John Tiner, chief executive of
Resolution, said: “[We have] contin-
ued to study market opportunities
and talk to market participants and
potential vendors in other financial
services sectors and geographies.”
Shares in Resolution jumped 3.4
per cent to 254.3p yesterday as the
company said strong performance
from its Friends Provident unit
helped turn a pre-tax operating loss
of £7m last year into a profit of
£203m. Earnings before tax came in
at £203m. Resolution declared a divi-
dend of 5.5p per share.
The numbers did not factor in
Resolution’s £2.8bn purchase of the
UK life assurance and savings part of
Axa, the French giant, which is due to
complete shortly.
Raghu Hariharan at Citigroup said
the consensus beat was partly down
to low visibility but added: “Clearly
the first half business performance
has been strong.”
ANALYSIS l Resolution
280
p 254.30
17 Aug
270
250
230
17 May 7 Jun 25 Jun 15 Jul 4 Aug
Bigger is better: Insurers with deep
pockets will crowd out smaller rivals
W
HEN it comes to
insurance, size matters
and that’s the strategy
Resolution is betting the
farm on. After buying two insurers –
Friends Provident and most of Axa’s
UK life operations – it is clear that
it’s now hunting down its next prey.
The question for investors is
whether Resolution, founded by
insurance entrepreneur Clive
Cowdery in 2008, can buy his way to
the top by putting together
disparate brands to create a success-
ful business with £10bn of embed-
ded value by 2012.
Yesterday’s results, showing a pre-
tax profit of £139m from a £7m loss
the previous year with strong cash
Resolution’s Clive
Cowdery is in
talks with sellers
Picture: REX
generation of £73m indicate that he
is on his way. The numbers were
buoyed by Friends Provident where
sales were up 42 per cent at £458m
proving Cowdery’s strategy thus far
is working.
It’s a high risk bet however.
Failure to achieve planned synergies,
overpaying and not being able to
secure the cash to fund its strategy
are all potential stumbling blocks.
But with regulatory changes set to
force insurers to hold more capital,
those with deep pockets will win as
smaller rivals wither.
BOTTOMLINE
Analysis by Katie Hope
CITYA.M. 18 AUGUST 2010
Builders miss
out on £6bn of
school projects
CONSTRUCTION
▲
BUILDERS have already lost out on
more than £5.7bn worth of work
after Britain slashed investment in
new schools and Balfour Beatty is
most exposed to the cutbacks,
Reuters research shows.
A survey of the 26 local authorities
worst hit by a decision to freeze the
last government’s £55bn Building
Schools for the Future (BSF) scheme,
shows contracts for dozens of schools
had already been awarded or were
close to being signed with preferred
bidders.
The scheme was scrapped as the
new government seeks to rein in a
ballooning deficit, leaving some chil-
dren stuck in leaky classrooms and
disappointing builders and IT firms
who had banked on a 20-year pro-
gramme of investment in schools.
Balfour Beatty is most exposed hav-
ing been among the contractors to
win, be shortlisted for or achieve pre-
ferred bidder status on projects
worth £1.1bn or about one fifth of
the £5.7bn total shown in the Reuters
survey.
Laing O’Rourke had been involved
in £903m worth of projects either
alone or in partnership with other
contractors, followed by FTSE 250
maintenance firm Interserve on
£718m.
CITYA.M. 18 AUGUST 2010 Focus on General Motors 7

TIME LINE | THE FALL AND RISE OF GENERAL MOTORS

● June 2009
General Motors files for a bankruptcy
supported by US government funding.
● July 2009
GM emerges from bankruptcy with four
core brands and majority owned by the
US government.
● September 2009
GM agrees to sell a 55 per cent stake in
its European Opel unit to a group led by
Magna. The Canadian auto parts supplier
beat off tough competition for the unit
from Belgian private equity firm RHJ
International.
● November 2009
GM reverses course and decides to keep
and restructure its Opel unit in Europe.
● February 2010
Spyker cars shareholders approve deal to
acquire Saab from GM. The Dutch luxury
sportscar maker sealed a deal to buy the
unit for $74m (£46m) cash and $326m in
deferred shares.
● 21 April 2010
Chief executive Ed Whitacre says IPO is a
“real possibility” by the end of 2010.
● 17 May 2010
GM says it has a “good chance” to report
its first full-year profit since 2004.
● 16 June 2010
GM says it will restructure Opel unit
without European aid after government
talks bogged down.
● 22 July 2010
GM announces $3.5bn (£3.3bn) deal for
AmeriCredit. The deal gives
GM a captive finance arm for the first
time since it sold off a controlling stake in
GMAC in 2006.
● 5 August 2010
Whitacre says GM is readying IPO docu-
ments.
● 12 August 2010
Whitacre says he will step down as chief
executive and chairman. Board member
Dan Akerson, 61, is named to succeed
Whitacre.

Dan Akerson will become GM’s fourth chief executive in four years Fu tu re s ‡ Commodities ‡ Options
Sto ck s ‡ Forex ‡ Bonds ‡ Funds

GM set to go
80
on over

Markets
ahead with a Worldwide
from One Account
$20bn float US Stocks* (all-in) UK Stocks and ETFs (all-in)
However if a significant percentage
USD 0.005 or less per share GBP 6.00 < 50,000 Value - UK2
▲

AUTOMOTIVE
BY STEVE DINNEEN
GENERAL Motors (GM) is poised to
press ahead with one of the biggest
ever IPOs, raising an estimated $20bn
(£12.8bn).
The momentous flotation of one of
the most recognisable US firms will
see the government begin to loosen
its grip on the troubled carmaker.
The initial prospectus was filed yes-
terday with the Securities and
Exchange Commission, according to
people close to the deal.
A successful offering would be a
major coup for the Obama adminis-
tration, which owns a 61 per cent
stake in the company after a contro-
versial $50bn bailout last year.
The administration is now consid-
ering how to allow retail buyers
access to the stock whilst still max-
imising return for taxpayers.
The firm is understood to favour a
sale to major institutions who are
prepared to commit to buy and hold
major stakes. It hopes sovereign
wealth funds or pension funds will
serve as “cornerstone investors”.
ED WHITACRE
OUTGOING GM
CHIEF EXECUTIVE
DAN Akerson will take control of the
resurgent auto firm in September.
The former boss at Nextel, will
become GM’s fourth chief executive
in just a year and a half. He was a GM
board member and a managing direc-
tor at private equity firm The Carlyle
Group.
He takes over from Ed Whitacre
who has served just eight months in
the top job. His departure had been
expected but the timing of the
announcement last week was a sur-
of the stock is sold to overseas (minimum GBP 6.00 per order)
investors it is likely to prove unpopu-
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committed to be major creditors in
GM’s $5bn credit line will serve as
underwriters for the stock offering, SIPP Accounts Supported
according to sources close to the deal.
They include Bank of America Merrill
Lynch, Barclays, Citigroup, Credit
Suisse, Deutsche Bank, Goldman
Sachs, JPMorgan Chase, Morgan
Stanley, UBS and Royal Bank of
Canada.
Successful traders and investors understand that
The IPO was delayed by several days
after the shock announcement last superior technology and low trading costs
week that interim chief executive Ed
Whitacre would step down earlier
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repeatedly that he would be an inter-
im leader at GM. He was an auto
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 8 News
Asda chief executive Andy Clarke says times are “uncertain” for consumers
Morrisons gains market share
ASDA and rival Tesco lost ground
to Sainsbury’s and Morrisons in
the 12 weeks to 8 August, with
both growing at a slower rate
than the 4.5 per cent advance
seen by the wider market over
the year, according to industry
figures. Kantar Worldpanel,
which tracks the weekly sales of
the big supermarkets, said Asda
Rok’s accounting
woes halve profits
SUPPORT SERVICES
▲
BY MARION DAKERS
ROK, the troubled building and
The Halifax Reward maintenance group, posted a 50
per cent fall in first-half pre-tax
profit and cut its dividend yester-
Current Account. day.
The Exeter-based firm issued its
second profit warning in four
months last week after saying it
Make the jump to simple, had discovered “serious misman-
agement” of contracts in its plumb-
great value banking. ing, heating and electrical business.
The firm, one of the country’s
biggest providers of social housing
maintenance, said at the time it
would suspend its finance director
At Halifax we like to look after our customers. Ashley Martin. The news caused its
That’s why our Reward Current Account gives you
£5 each month. And moving to us is easy, our
New contract wins enable
Switching Team take care of everything for you.
To get your fiver just pay in £1,000 each month.
To find out more, pop into branch, call us
Mears to raise its dividend
on 0845 122 1425 or visit halifax.co.uk
SUPPORT SERVICES
▲
BY ROGER BAIRD
MEARS GROUP, the social housing
maintenance company, posted a 42
per cent increase in first-half pre-
tax profit to £13.2m on the back of
new contract wins.
The Gloucester-based firm said
yesterday it booked a significant
amount of new business from local
councils during the past 12
Pay in £1,000 each calendar month to receive £5 (net)/£6.25 (gross) monthly. Reward paid net of income tax (at
the rate specified by law, currently 20%). Higher rate tax payers may need to pay additional tax on the reward
months. The new wins include a
Call us, go online or visit one of our branches for more information on all fees and interest rates. Available only to £200m contract with Brighton &
personal customers, aged 18 or over and who are resident in the UK. Halifax is a division of Bank of Scotland plc Hove and a £170m contract with
Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ.
Lambeth.
▲
was sitting on a market share of
16.9 per cent, compared with 17.2
per cent in the equivalent period
a year ago. Market leader Tesco
also slipped to 30.8 per cent from
31 per cent a year ago. Morrisons
and Sainsbury’s however both
added 0.2 per cent to their mar-
ket share to 11.6 per cent and
16.1 per cent respectively.
shares to tumble 50 per cent.
Chief executive Garvis Snook
told City A.M. the firm had “gripped
the problem quickly and firmly,
and as a result, today’s results were
in line with expectations.”
He added that the firm has been
approached by customers of social
housing peer Connaught, and that
Rok has good visibility on market
orders going forward.
Pre-tax profit for the six months
to 30 June was £3m, compared
with £6m for the same period a
year earlier. But when £6.4m of
exceptional charges relating to the
accounting problems are included
in this period, the company
slumped to a £3.8m pre-tax loss.
Chairman Bob Holt said: “The
opportunity for Mears has never
been better. We are [the] market
leader in social housing where the
significant majority of our rev-
enues are non-discretionary spend
for services which our clients have
a legal obligation to provide.”
Holt said he did not expect a
downturn in business after the gov-
ernment’s October spending
review, and added he believed pro-
posed changes to housing benefit
will “promote the migration away
from private dwellings towards
social housing”.
CITYA.M. 18 AUGUST 2010
Asda warns of
shopper misery
as sales drop
CONSUMER
SUPERMARKET chain Asda said yes-
terday shoppers were being hit in the
pocket by government cuts as like-for-
like sales excluding fuel fell 0.4 per
cent in the second quarter.
The chain said its market share had
reduced in the 12 weeks to 11 July as
total sales crept up “in the low single
digits”.
Chief executive Andy Clarke said:
“These are increasingly uncertain
times for millions of families across
the UK.”
The slip in sales follows a 0.3 per
cent decline in the first three months
of the year, which was the first fall
since early 2006.
The company added: “Customers
are facing challenges from recently
announced tax increases and cuts in
government spending.”
Meanwhile Asda’s US owner
Walmart announced a better-than-
expected 3.6 per cent rise in profit,
but with revenue which was below
estimates.
Half year sales of £308.1m were
down from £364.5m a year ago,
while the interim dividend was cut
by 33 per cent to 0.5p. Rok reduced
its net debt by £10m to £47.6 in the
first half of the year.
ANALYSIS l ROK
35 p 20.50
17 Aug
30
25
20
17 May 7 Jun 25 Jun 15 Jul 4 Aug
The firm said its sales rose nine
per cent to £252.6m, while it said it
would boost its interim dividend
19 per cent to 1.9p.
Market expectations for Mear’s
full-year pre-tax profit range
between £29.4m and £31.3m with
the consensus at £30.4m.
Mears’ performance contrasts
with that of rival Connaught,
which has seen the value of its
shares plunge since issuing a profit
warning in June and saying it was
in dire need of cash as cutbacks by
the new coalition government hit
its business.
CITYA.M. 18 AUGUST 2010 News 9

BAA fends off strike

with 2pc pay offer
TRANSPORT favourable sick pay arrangements. Heathrow and Stansted, disrupting
▲

BY MARION DAKERS
THE UNITE union told its workers
yesterday they should accept a pay
offer by airport operator BAA, as
strike action over the August bank
holiday was averted.
BAA has offered ground staff a
two per cent pay rise plus a one-off
payment of at least £500 depend-
ing on company results, the union
said yesterday, following nine
hours of last-ditch talks with medi-
ator Acas.
The deal is double a previous
offer of a one per cent pay hike plus
extra payments that were condi-
tional on workers conceding their
“The negotiations where tough
but Unite has delivered a fair offer
for BAA staff,” Unite heads Brian
Boyd and Brendan Gold said in a
statement.
“The game is up for employers in
the aviation industry. With the
recession receding in the industry,
Unite now expects BAA’s pay offer
to set the standard.”
The union will now ballot mem-
bers on the pay offer, with a result
expected within the next three
weeks.
The threatened walkout by fire-
fighters, security staff and engi-
neers would likely have shut BAA’s
six British airports, which include
the plans of thousands of travellers
at the height of the holiday season.
“We believe this is a fair offer for
staff in what remains a difficult
economic environment for the avi-
ation industry,” said BAA in a state-
ment.
“All parties brought a construc-
tive approach to negotiations and
we are sorry for the uncertainty
ahead of yesterday’s discussions.”
Air travellers still face disrup-
tion, however. British Airways,
BAA’s largest customer, remains in
dispute with Unite over cabin crew
pay and conditions, which has
resulted in 22 days of strike so far
this year.

CITY VIEWS: DO YOU THINK BAA WAS RIGHT TO OFFER UNITE WORKERS A
BETTER PAY DEAL TO AVOID STRIKE ACTION? Interviews by Alain Tolhurst and Simon Warner
JONATHAN RUMBALL | ROYAL LONDON
"It’s not really right, everybody else is having to struggle, ask how many
other people are getting pay rises this year? It’s typical union stuff, putting
a gun to BAA’s head. They had them over a barrel."

GREG BEALER | CORNHILL CAPITAL

"If it stops strike action then maybe it was right. If it would cost them
more money to have the airports closed than to increase the pay offer then
maybe they made the right decision."
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Current Account.
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AMOUNTS¬UP¬TO¬AND¬INCLUDING¬a¬¬
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FSA bans five insurance execs and s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬YOUR¬ARRANGED¬OVERDRAFT¬ON¬

¬ ¬ ¬ ¬ ¬ ¬
hands out £150,000 fine over fraud
FRAUD
▲
BY HARRY BANKS
THE Financial Services Authority
(FSA) has banned five individuals in
relation to insurance fraud and
given one director a near-record
fine of £150,000.
The FSA said yesterday that the
five insurance executives whom it
had banned had shown complete
disregard for the interests of their
customers.
Andrew Jeffery, a director of
Jeffery Flanders Limited, was fined
£150,000 for failing to put in place
adequate insurance policies and
knowingly forging documents. The
FSA described it as one of the
largest ever fines against an insur-
ance broker.
Barrie Duncan Aspden of Orion
Direct Limited and Peppercom was
banned for using customer money
to create a new company, meaning
that customers were at risk of
being uninsured because their pre-
miums were being misused.
Aspden’s wife Melanie and his
sister-in-law Gaenor Clayton were
also banned, along with Orion
executive Paul Willment, for their
AMOUNTS¬OF¬OVER¬a
¬ ¬
¬ ¬
¬
¬ ¬ ¬
s¬a¬FOR¬EACH¬DAY¬YOU¬USE¬AN¬UNARRANGED¬OVERDRAFT
¬ ¬ ¬ ¬ ¬ ¬ ¬
¬ ¬
s¬!S¬WE¬CHARGE¬FEES¬ON¬THIS¬ACCOUNT¬INSTEAD¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
of interest, the typical rate is 0% EAR.
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!ND¬NO¬COST¬WHEN¬YOU¬DONT¬USE¬IT¬
¬ ¬ ¬ ¬ ¬ ¬ ¬ ¬
roles in the affair. Willment was
)F¬ONLY¬ALL¬OVERDRAFTS¬WERE¬SO¬SIMPLE¬
¬ ¬ ¬ ¬ ¬ ¬ ¬
fined £50,000.
The FSA has sought to toughen To find out more, pop
up its act in the wake of the finan-
cial crisis, and last month it hand- into branch, call us
ed out a £320,000 fine to the on 0845 122 1425
former finance director of or visit halifax.co.uk
Northern Rock, the first British vic-
tim of the credit crunch.
Margaret Cole, director of
enforcement and financial crime
at the FSA, said: “Individuals hold-
ing a role such as that of director Call us, go online or visit one of our branches for more information on all fees and interest rates. EAR is the equivalent annual
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diligence”.
 The Capitalist
10
SMITH JETS
OFF ON LAST
MINUTE
HOLIDAY
IN THE wake of the crisis, understated chic
is still the name of the game for City top
dogs – even when they’re kicking back on
their summer hols.
Who should be spotted by one of The
Capitalist’s spies yesterday in Juan Les
Pins, France, but Tullett Prebon boss Terry
Smith, still pale-faced on the first day of
his stay.
Apparently, Smith is out there enjoying
a relaxing break with his wife at the rela-
tively modest 4* Hotel Ambassadeur – a
warm, family-friendly outfit whose web-
site advertises rooms starting at an emi-
nently reasonable €95 per night. Wonders
will never cease.
Our man on the sunlounger gushes
that he “couldn’t get over how friendly”
the notoriously hard-talking Smith was
when he was recognised – and this
despite the fact that he had to settle for a
séjour en France at short notice, snapping
up a deal with lastminute.com after his
plans in the Italian lakes fell through.
HIGH SEAS
A mere week after the conclusion of Cowes
Week, and the City sailing set was back in
the Isle of Wight at the weekend for the
next jaunt of the season, the Taittinger
Royal Solent Yacht Club Regatta.
Two days of sailing and a packed social
calendar followed – including the tradi-
tional party for 1,500 guests in the
grounds of the waterfront pad owned by
John Caulcutt, the founder of airline serv-
ices group Watermark.
Among all the festivities, there was a bit
of an upset on the City sponsor front this
year as Charles Stanley took over the event
from usual sponsor Brewin Dolphin.
Brewin apparently missed the deadline
for submitting its agreement to this year’s
deal because its executive chairman Jamie
Matheson was out of town – an omission
which can’t have gone down too well with
the boss, since he himself is one of the
City’s most dedicated boaties.
Just a few years ago, Matheson lovingly
restored his wooden yacht Opposition to
her full former glory – three and a half
Roast New Season Grouse
Justerini & Brooks Red Burgundy
Game dish of
the year
Restaurant
Magazine 2008
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“Tullett
Prebon boss
Terry Smith
went for
understated
chic on his
summer hols
to the south
of France”
Terry Smith, above, tive Andrew Formica. Sensible as our mar-
was enjoying a sum- keting gal was, she felt it “only appropri-
mer break in Juan Les ate” to let her boss win, despite the fact he
Pins with his wife didn’t recognise her in her gym attire…
ROW THE BOAT
Speaking of rowing, a call to arms for City
boys and girls keen to put their biceps to
the test for a good cause.
Warship HMS Belfast will play host to a
land-based rowing challenge on
September 15th, with teams of four sweat-
ing it out against one another on rowing
machines to raise money for the Royal
Hospital for Neuro-disability.
Sailors on the water in the Isle of Wight The evening – which is the
brainchild of a group of volun-
decades after she was first crafted for teers from Goldman Sachs taking
then-Prime Minister Ted Heath. time out for the firm’s Community
Teamworks programme – costs £30
per person and includes admittance
GYM BUNNIES to the ship and refreshments after the
We’ve heard all about the City’s irrepress- competition. There’s also a cash bar
ible competitive spirit, but this takes the afterwards for those wishing to undo
biscuit. their good work on the exercise front by
I hear that a certain member of fund partying into the night.
manager Henderson’s marketing team Visit www.rhnrowhard.org.uk for more
was in the nearby Virgin Active gym yes- details.
terday morning with her personal trainer,
a rather hunky Italian muscle-man, when
a bizarre coincidence occurred. Half way
through her workout, said Italian stallion
DOCTOR, DOCTOR
After years working in the high-octane
decided to up the stakes by pitting his world of the City, what better way to
“student” against a man being trained by capitalise on your experiences than by
his colleague just across the room – chal- setting up a business to aid stressed-
lenging the two to a row-off over a certain out former colleagues?
distance. Mitesh Soma spent over a decade
Unbeknown to the trainers, however, working at the likes of Deutsche Bank,
the other gym bunny in question was UBS, Deloitte and Citi before leaving to
none other than Henderson chief execu- pursue his entrepreneurial dreams,
with a glass of
£27.50
Boisdale of Bishopsgate The Lamb at Hindon
Reservations on 020 7283 1763 Reservations on 01747 820 573
Boisdale of Belgravia Subject to availability from
Reservations on 020 7730 6922 17th August until 30th September
CITYA.M. 18 AUGUST 2010
Executive stress is rife in the City
founding online pharmacy
Chemistdirect.co.uk.
A recent brainwave, however, has trans-
formed the group’s sales – in the form of
an “Executive Stress Kit”, a sort of home
health MOT package designed to put the
minds of busy businesspeople at rest. The
£100 packs, which contain a cholesterol
monitoring kit, blood pressure monitor,
pedometer and gadget to measure your
percentage of body fat and BMI – have
been flying off the online shelves in the
last month, with half of them being deliv-
ered to addresses in the Square Mile and
Canary Wharf.
“There’s so little job security around at
the moment that people are feeling the
pressure even more than usual – it’s dog
eat dog out there,” Soma tells me. Indeed.
Perhaps hope is on the horizon, though
– I hear that conversely, sales of Alka-
seltzer and painkillers to the financial
community have recorded a sudden surge
over that same month.
A new barometer of improving eco-
nomic prospects?
WHAT A MOUTHFUL
Word arrives of a delightful little online
tool, designed to cut through the gim-
micky business jargon which has explod-
ed in recent years.
www.Unsuck-it.com is a sort of dic-
tionary for those words and phrases at
which you regularly have to cringe in
the office – “blue sky thinking”, “the
big picture”, “thinking outside
the box” and other such regu-
lar howlers.
Most of them, mind you,
seem to be translated
broadly as “using your
imagination” – but the
act of tapping out the
phrases angrily on
your keypad is some-
how strangely thera-
peutic...
CITYA.M. 18 AUGUST 2010
Profits up at London Capital
CFD platforms in the second quarter
▲
FINANCIAL SERVICES
of 2010. One is an extension of its
BY HARRY BANKS spread betting site and the second
SPREAD betting company London will target retail clients in the Far and
Capital Group, said first-half adjusted Middle East.
pre-tax profit rose 12 per cent yester- The company, which offers online
day, helped by strong spread betting spread betting, foreign exchange and
performance, but cut its interim divi- broking services, has just opened its
dend by 60 per cent. first office outside Europe, in
“If the rest of the year follows the Australia.
route of the first half, we would For the six months ended 30 June,
expect to be paying quite a substan- adjusted pre-tax profit rose to £4.2m
tial dividend at the year end,” said from £3.8m a year ago. And sales
chief executive Simon Denham. increased 61 per cent to £20.9m.
He said he was optimistic due to However, the firm’s statutory pre-
the continued growth in the compa- tax profit for the first half fell 74 per
ny’s core business and the launch of cent to £856,000 due to an impair-
its Contract for Difference (CFD) plat- ment charge of £3.2m. The company
forms. London Capital launched two cut its interim dividend to 1p per
Cairn claims
red tape may
hold up deal
▲
MINING
terms of different interpretations. So,
BY HARRY BANKS we are working constructively with
TOP executives from Cairn Energy the government.” He added. “I think
met Indian government officials yes- working with the government as we
terday to seek approval of its plans to always do will find a win-win situa-
sell a controlling stake in Cairn India tion. We will obviously respect all
to Vedanta for up to $9.6bn (£6.1bn). rights and approvals.”
Cairn Energy chief executive Bill ONGC has not yet raised concerns
Gammell flew to New Delhi to meet on the deal, Indian oil secretary
oil minister Murli Deora and other Sundareshan said yesterday.
officials to discuss implications of the “We will certainly take into
deal involving the British company’s account views of ONGC before a deci-
India unit. sion is taken. ONGC has not raised
The deal needs Indian government any concerns with us yet for the rea-
approval because Cairn India has pro- son that there is no official proposal
duction-sharing contracts with the before us.”
government for oil and gas explo- ONGC chairman R.S. Sharma said
ration blocks. According to the agree- the company was examining the
ment, any ownership change will implications of Vedanta’s stake pur-
need federal approval. chase and would respond appropri-
Approval from state-run explorer ately later. He declined to comment
ONGC, which has a 30 per cent stake on market talk ONGC might make a
in Cairn India’s Rajasthan oil block counter-bid for Cairn India’s stake.
called RJ-ON-90/1, is also crucial for Vedanta Resources announced
any change of ownership. Monday it would buy a controlling
Gammell said: “We will work with stake in Cairn India for up to $9.6bn,
the government. The process will con- adding to its assets that already
tinue over a period of time. I am sure include aluminium, copper, iron ore
there will be bumps along the road in and zinc mines.
CITY MOVES | WHO’S SWITCHING JOBS
World Gold Council
The WGC has appointed David Badham as head
of investment marketing for Europe, effective
immediately.
Badham joins from the Royal Bank of
Scotland, where he was head of communica-
tions and marketing for the global markets divi-
sion in the EMEA region.
Prior to the acquisition of NatWest by RBS
in 2000, he was head of business strategy for
NatWest’s corporate banking services.
F&C Investments appointed Emily Fitz-James as a client
The investment management team has director in its institutional team.
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
share from 2.5p per share a year ago.
Encouragingly, average daily vol-
umes rose 22 per cent to 31,950 trades
in the six month period while aver-
age revenue per user almost doubled,
from £599 to £1,051.
Cenkos Securities is confident
London Capital will meet its full-year
pre-tax profit estimate of £6.3m, giv-
ing earnings per share of 11.2p and a
final dividend of 2p.
Denham said the company’s CFD
product launched in Australia was
very competitive.
“We are not expecting much more
than covering costs by the end of the
year [regarding the CFD platforms]”,
Denham said, adding that he expects
profits from it in 2011.
BEST OF THE BROKERS
ANALYSIS l Lloyds
80 p
70.59
17 Aug
75
70
65
60
55
50
45
26 May 16 Jun 6 Jul 26 Jul 13 Aug
LLOYDS
Morgan Stanley places an “underweight”
rating on Lloyds banking group. It says
first-half figures were reassuring but warns
of lower improvement ahead, with a slow-
ing down of its book re-pricing. The bank
faces a funding challenge, with the world
facing austerity measures and a predicted
housing dip by the end of 2011, it believes.
Koreans snap up French shopping mall
▲
PROPERTY
SOUTH Korea’s National Pension
Service (NPS) said yesterday it would
buy a 51 per cent stake in a French
shopping mall from Anglo-French
property investor Hammerson for
around 350bn won (£189m).
The deal is the latest addition to
NPS’s growing investments in over-
seas property assets which include a
$767m (£493m) purchase of Sony
Edited by Victoria Bates
Fitz-James joins at the end of August
from Legal & General Investment
Management, where she has worked
since November 2006, most recently as
a liability-driven investment account
manager. Prior to that, she was at
Northern Trust.
Legal & General Property
The property fund manager has hired
Will Edwards as a fund manager for its
linked pensions property fund and Greg
Westover as senior asset manager on
its linked life fund.
Edwards was formerly an associate
director at DTZ Investment
NEWS | IN BRIEF
Carillion renews EDF contract
Support services company Carillion has
been awarded a five-year extension to its
existing contracts with EDF Energy,
worth £200m. Carillion’s existing four-
year contracts began in 2007, and are
being extended from January 2011.
Under the contract extensions, worth
£40m a year, Carillion will deliver infra-
structure services for sub-stations and
cabling to support the electricity net-
work in the East of England.
Thomas Cook in meter deal
Bglobal, the smart metering and energy
data firm, has signed a contract with
travel firm Thomas Cook. It will install
800 electricity smart meters and provide
associated data services across Thomas
Cook UK’s stores. Bglobal’s other retail
clients include JD Sports Fashion, Schuh
and Superdrug.
ANALYSIS l Yell
50 p
18.57
40
17 Aug
30
20
26 May 16 Jun 6 Jul 26 Jul 13 Aug
YELL
Yell receives a “neutral” rating from J P
Morgan which emphasises the impact of
poor economic sentiment on customer con-
fidence. It thinks this may prevent strong
revenue improvement in 2011 which it sees
as key, but it acknowledges that the stock
is trading at good value, and expects it to rise
on the first sign of good news.
To appear in Best of the Brokers email your research to notes@cityam.com
Center in Berlin, a $160m buy of
Gatwick airport in London and a
$1.3bn purchase of HSBC’s European
headquarters in London’s Canary
Wharf financial district.
NPS, the world’s fifth-biggest pen-
sion fund, is considering buying addi-
tional stakes in the O’Parinor mall
near Paris, a spokeswoman in the
fund said. The shopping centre,
which has more than 90,000 square
metres (968,800 sq ft) of space, was
in association with
Management, where he managed UK-
focused commercial property portfolios
on behalf of pension funds.
Westover previously worked as a
commercial asset manager at
Ballymore and also spent a nine-year
stint at Chase & Partners.
Gatehouse Bank
Michael Bavington is joining the
Shariah-compliant wholesale invest-
ment bank as a vice president in the
asset finance team.
Bavington moves over from Lloyds
Banking Group, where he was a direc-
tor in the corporate asset finance busi-
News 11
Senior buys US rival for $13.3m
Manufacturing firm Senior said yester-
day it had bought US rival
WahlcoMetroflex (WMX) for $13.3m
(£8.5m). WMX manufactures exhaust
gas systems and other parts for the ener-
gy industry. WMX reported sales of
$9.7m and profit before interest and tax
of $1.1m in the first half of the year. The
acquisition is expected to be immediately
earnings enhancing.
EnQuest boosts earnings
North Sea oil explorer EnQuest reported
a sharp rise in half-year profits and
upped its production quota for the year
yesterday after its drilling programme
beat expectations. Just four months
after the firm was formed from the
demerged UK unit of Petrofac and
Lundin, it saw pre-tax profits soar to
$86.2m (£55.3m) from $2.9m a year ago.
ANALYSIS l RSA
140 p 125.40
17 Aug
135
125
115
26 May 16 Jun 6 Jul 26 Jul 13 Aug
RSA
Citigroup retains its “buy” rating on insur-
ance group RSA but moves it from medium
to high risk. It still sees value in the shares
but thinks the stock will struggle to outper-
form in the near term, given it may be hard
to shake-off perceptions that large-scale
M&A is the focus after the failed £5bn bid
for rival Aviva's non-life operations.
redeveloped in 2008 and houses 220
stores including retailer Carrefour,
H&M, Zara, and Toys ‘R’ Us, according
to Hammerson. NPS, which manages
nearly 300 trillion won (£161.8bn) in
assets, aims to boost investments in
assets such as real estate, infrastruc-
ture and private equity funds to 6.4
per cent this year from 4.5 per cent as
of the end of November, and has been
building a global presence in the past
year.
ness, specialising in providing funding
for managed asset service providers in
the energy, water and healthcare mar-
kets.
Brookland Partners
The real estate investment bank has
appointed Prabjot Mann as a director in
the real estate investment and debt and
commercial mortgage-backed securi-
ties (CMBS) advisory team.
Mann joins from European Credit
Management, where she was the firm’s
CMBS analyst. She has also previously
been a vice president at Merrill Lynch
Real Estate Finance.
+44 (0)20 7557 7245
morganmckinley.com
 12 News CITYA.M. 18 AUGUST 2010

Cameron takes
stock after 100
days in power
David Crow recounts the events that shaped the
coaltion government’s first 100 days in power

T
ONY Blair, who releases his memoirs
next month, says his biggest regret
was not doing enough during his
early years in power. He wasted his
first 100 days – and indeed much of his
first term – basking in the glory of
Labour’s landslide win. By the time he
turned his attention to public service
reform, his popularity was waning, as was
his ability to take on Gordon Brown, a
powerful but disgruntled chancellor who
was hell-bent on blocking Blair at every
turn.
The spectre of Blair’s big mistake
haunts David Cameron, who took power
in less auspicious circumstances 100 days
ago. Although many observers expected a
Tory-Liberal administration to be ham-
strung with infighting and indecision, the
fragility of the government has spurred it
to do more, not less; both sides are acutely
aware that a coalition – no matter how
strong – is more likely to fall apart than a
majority government. Time is not on their
side.
With this in mind, the government has
been getting things done at a frenetic
pace. Legislation is being rushed through
the Commons at breakneck speed, using
mechanisms originally designed for times
of national emergency; Downing Street
spinners have been instructed to make an
announcement a day; laws have been
repealed; and countless reviews have
begun. Here City A.M. selects the events
that have affected London’s financiers and
businesses, and asks if more – or less –
could have been done.
EMERGENCY BUDGET
George Osborne’s emergency Budget,
delivered in June, looms large over every-
thing the government does. Faced with a
parlous economic inheritance, Osborne
has embarked on the toughest fiscal tight-
ening in Britain’s peacetime history; most
departments (excluding health and inter-
national aid) have been asked to cut
spending in real terms by between 25 per
cent and 40 per cent.
The City had serious concerns about
Osborne when he was in opposition, but,
for now at least, he has protected Britain’s
triple-A rating and kept the cost of servic-
ing the national debt low. He also man-
aged to see off a potential rebellion by bro-
kering a compromise on capital gains tax,
which went up from 18 to 28 per cent;
high enough to satisfy tax-happy Lib Dems
but low enough to convince Tory rebels to
keep their powder dry.
OFFICE FOR BUDGET RESPONSIBILITY
This was supposed to be Osborne’s big,
bold move: an official forecaster that was
independent of the Treasury, making it
impossible for the chancellor to fiddle
growth forecasts to fit his Budget. Advisers
likened the move to Gordon Brown’s deci-
sion to hand interest rate setting powers
to the Bank of England in 1997. Osborne
always knew the OBR could create a rod
for his own back, but he can’t have gam-
bled on it causing so many problems so
early on. Its inaugural head Sir Alan Budd
has already stood down amid questions
over his independence, and a replacement
has yet to be found. Few can doubt the
merits of an OBR, but its genesis has been
nothing but trouble.
David Cameron
FINANCIAL REGULATION and Nick Clegg
Osborne’s long-held dream of scrapping address the press
the Financial Services Authority and on their first day
handing its powers to a beefed up Bank of in power
England looked in jeopardy when the
coalition was formed. Vince Cable, the Lib
Dem voice on economics, was an ardent
opponent. Still, Osborne got his way, have become a useful device for kicking the future of banking as reports suggest:
albeit by convincing FSA chief Hector party differences into the long grass, not the spectre of a British version of Glass-
Sants to stay on board at the very last least in the area of banking. In opposition, Steagall could yet become a reality.
minute. Sants will oversee the disband- the Lib Dems said the break-up of univer-
ment of the FSA and then head up the sal banks like HSBC and Barclays would be TAX AND RED TAPE
new Prudential Regulation Authority a precondition of any coalition deal, but Firms feel more at home with the pro-
(PRA), a subsidiary of the Bank. An they’ve had to make do with an independ- business noises coming from the new gov-
Economic Crime Agency, promised by the ent commission instead. ernment, but there have been few actions
Tories in opposition, seems to have hit the The make-up of the commission should to match the rhetoric. On the plus side,
skids for now, however, showing the limi- worry the banking industry: consumer the headline rate of corporation tax will
tations of the government’s whirlwind champion Claire Spottiswoode has already be cut by 1p-a-year for the next four years
approach. Although Osborne has won the called for the separation of retail and until it hits 24p – Britain’s lowest ever rate,
argument on disbanding the FSA, the real investment banking, while Financial while the government will reform the way
test is whether the PRA is much better. Times writer Martin Wolf argues for a sim- in which foreign profits are taxed. But the
ilar approach in his columns. Even the government is planning to scrap the
BANKING COMMISSION bankers – ex-Barclays chief Martin Taylor default retirement age and is pressing
There’s been a running joke in and former JP Morgan banker Bill Winters ahead with Harriet Harman’s equalities
Westminster since the coalition took the – are said to be in two minds about the agenda, both of which will cost firms dear-
reins of power. “A review a day keeps legis- merits of the universal model. Sources say ly. Hopes for a bonfire of red tape appear
lation away”. Reviews and commissions Osborne and Cable are not as divided on to have been just that.

HOW DO YOU RATE THE COALITION’S FIRST 100 DAYS IN POWER?

DR PATRICK NOLAN | REFORM RICHARD LAMBERT | CBI

“ Its goal of a smaller government and stronger society is right but many of
its policies go in exactly the other direction. Governments need to take the tough
“ Business has been impressed by the speed and direction of policy-making
to date. This applies in particular to the government’s determined efforts to get

” ”
decisions straight away when their political capital is at its highest. That means the public finances back into shape. June’s Budget was seen as bold and auda-
looking again at the big spending areas of health and welfare. cious – and it needed to be.

DAVID FROST | BRITISH CHAMBERS OF COMMERCE MILES TEMPLEMAN | INSTITUTE OF DIRECTORS

“ Early action on deficit reduction and burdensome employment regulation

has been strongly welcomed. However, business wants to see more progress in
“ We are delighted that the coalition has achieved two key early objectives
– an ambitious deficit reduction plan and a bill facilitating more school competi-

” ”
areas such as international trade and reform of the UK’s planning system. We tion. However, we are concerned that the government has yet to show a similar
have not yet seen the appointment of a dedicated trade minister. enthusiasm for grappling with the problem of over-regulation.
CITYA.M. 18 AUGUST 2010
Carlsberg ups
target as key
markets rise
▲
CONSUMER
BY JOHN DUNNE
CARLSBERG yesterday lifted its target
for profits growth after reporting a 30
per cent rise in second-quarter profits
and winning a bigger proportion of
some of its main markets.
The group said it expected net prof-
its to surge an estimated 40 per cent
this year – double the 20 per cent pre-
viously forecast.
Carlsberg, which acquired Scottish
& Newcastle in partnership with
Heineken in 2008, said currency
movements and market growth in
Asia drove the upgrade.
There was also growth in the UK
where its market share in the first six
months rose to 16.2 per cent, with
improvement seen in both pubs and
off-licences.
Overall half-year operating profits
rose by 12 per cent to 5bn Danish kro-
nor (£550m). And pre-tax profits rose
to 3.95bn kronor from 3.025bn kro-
nor in the same period a year ago.
News 13
EU criticises
WTO ruling on
tech tariffs
TECHNOLOGY
▲
A ROW has erupted between the EU
and the World Trade Organisation
(WTO) over technology tariffs.
The EU has slammed a World Trade
Organisation report that orders it to
end duties on electronic products.
Brussels is now mulling an appeal
Chief executive Jorgen Buhl against the ruling.
Rasmussen said: “The group’s per- The EU’s executive commission
formance was strong for the first six Transport secretary Philip Hammond (inset) is overseeing the High Speed 1 sell-off claims the WTO panel report fails to
months in spite of challenging con- lay down markers for future reform
High Speed 1 rail bidders
sumer dynamics.” of duty rules governing soaring global
The improved outlook was helped trade in electronics products.
by a recovery in demand in Russia – The WTO panel’s findings back
one of the firm’s key markets. claims by the US, Japan and Taiwan
joined by new partners
The company said beer volumes that EU duties on flat-panel displays,
fell in the first half due to significant multi-function printers and television
price increases in Russia as a result of set-top boxes violate the WTO’s
higher taxes. Information Technology Agreement
However, the drop was smaller (ITA).
than expected, Carlsberg said. The EU argues that added function-
TRANSPORT Budget deficit. ality since the trade agreement was
▲
ANALYSIS l Carlsberg 510.00 The “GB Speedrail” group, already struck in 1996 means some products
BY HARRY BANKS
530 € 17 Aug consisting of Eurotunnel, Goldman are now consumer goods rather than
520 GOLDMAN Sachs and Groupe Sachs Infrastructure Partners and information technology, and so are
Eurotunnel have expanded their bid- M&G’s Infracapital, has been joined not entitled to the zero tariffs. Brussels
500 ding group for Britain’s only high- by two financial backers, Britain’s has imposed duties ranging from six to
speed rail line as first-round bids were Universities Superannuation Scheme, 14 per cent on the products.
480
due for the £1.5bn route yesterday. and France’s Caisse des Dépôts et US and Asian electronics produc-
460
The British government is selling Consignations. A spokesman for the ers, including Hewlett-Packard and
“High Speed 1” which has a 30-year group said. “We will make an indica- Samsung, are keenly awaiting any
440 concession to run a 110-kilometre (70 tive bid today.” sign that the EU might appeal the
mile) railway linking London and the The group is vying with at least two WTO panel’s findings. The EU has 60
2010 7 Jun 28 Jun 19 Jul 9 Aug Channel Tunnel, to help cut its rival teams. days to file any appeal.
 Markets&Investment
14 CITYA.M. 18 AUGUST 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 . . . . . . . . . . . . . . . . . . . . . . . .269.40 +5.70 314.80 246.90 Cobham . . . . . . . . . . . . . . . . . . .220.60 +3.70 278.60 192.60 Investec . . . . . . . . . . . . . . . . . . .475.60* +11.40 565.00 378.20 SABMiller . . . . . . . . . . . . . . . . .1915.00 +22.00 2090.00 1307.00
3i Infrastructure . . . . . . . . . . . . . 113.60 –0.10 115.00 89.35 COLT Group . . . . . . . . . . . . . . . .120.00 –0.50 144.20 111.20 ITV . . . . . . . . . . . . . . . . . . . . . . . .50.55 +0.63 71.75 41.04 Sage . . . . . . . . . . . . . . . . . . . . . .241.90 +5.10 260.50 207.10
A.B. Foods . . . . . . . . . . . . . . . .1027.00 +2.00 1096.00 785.50 Compass . . . . . . . . . . . . . . . . . .518.00 +12.50 574.50 308.10 Jardine Lloyd Thompson. . . . . . .595.00 +9.50 604.50 420.70 Sainsbury(J) . . . . . . . . . . . . . . . .355.10 +7.10 373.00 307.60
Aberdeen Asset Man . . . . . . . . . .137.00 +2.00 155.60 111.00 Cookson . . . . . . . . . . . . . . . . . . .462.30 +20.30 616.00 347.60 Johnson Matthey . . . . . . . . . . .1690.00 +49.00 1814.00 1302.00 Schroders . . . . . . . . . . . . . . . . .1423.00* +52.00 1450.00 957.00
Admiral. . . . . . . . . . . . . . . . . . .1489.00 +23.00 1520.00 991.00 Croda Intl . . . . . . . . . . . . . . . . .1334.00 +55.00 1355.00 581.00 JPMorgan Emerg Mkts . . . . . . . .535.00 +9.00 549.00 395.10 Schroders N/V. . . . . . . . . . . . . . 1140.00* +33.00 1185.00 804.50
Aegis . . . . . . . . . . . . . . . . . . . . . 118.40 +3.30 137.30 89.80 Daily Mail ‘A’ . . . . . . . . . . . . . . . .464.50 +9.70 539.00 333.10 Kazakhmys . . . . . . . . . . . . . . . .1219.00 +43.00 1634.00 845.00
Afren . . . . . . . . . . . . . . . . . . . . . .98.65 +2.15 111.00 52.50 Dana Petroleum . . . . . . . . . . . .1695.00 +23.00 1729.00 968.50 Kesa Electricals . . . . . . . . . . . . .131.40 +2.00 162.00 98.45 Scot. & Sthrn Energy. . . . . . . . . 1121.00* — 1206.00 357.50
African Barr Gold . . . . . . . . . . . .575.50 +13.00 685.00 520.50 Davis Service . . . . . . . . . . . . . . .370.50 +6.90 442.30 354.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .206.60 +1.70 255.00 196.50 Scottish Mortgage. . . . . . . . . . . .587.00 +6.50 623.50 439.70
Aggreko . . . . . . . . . . . . . . . . . .1525.00 +13.00 1639.00 583.50 De La Rue . . . . . . . . . . . . . . . . . .702.00 +14.00 1021.00 666.50 Ladbrokes . . . . . . . . . . . . . . . . .133.70* +0.90 174.29 114.60 SEGRO . . . . . . . . . . . . . . . . . . . .278.00 +5.00 403.10 244.00
Alliance Trust . . . . . . . . . . . . . . .319.20 +6.30 352.70 281.00 Debenhams . . . . . . . . . . . . . . . . .59.00 +0.50 90.00 51.95 Lancashire Hldgs . . . . . . . . . . . .522.50 –0.50 545.00 416.70 Serco . . . . . . . . . . . . . . . . . . . . .544.50 +4.50 656.50 417.10
AMEC . . . . . . . . . . . . . . . . . . . . .892.50 +13.00 937.00 706.00 Derwent London . . . . . . . . . . . .1400.00 +24.00 1490.00 1077.00 Land Securities . . . . . . . . . . . . . .614.00 +14.00 743.50 543.00 Severn Trent . . . . . . . . . . . . . . .1325.00 +1.00 1358.00 929.50
Amlin . . . . . . . . . . . . . . . . . . . . .433.00 +4.90 436.20 336.30 Dexion Absolute . . . . . . . . . . . . .138.40 –0.20 148.00 121.10 Legal & General . . . . . . . . . . . . . .93.25 +2.05 94.70 64.30 Shaftesbury . . . . . . . . . . . . . . . .404.80 +7.30 426.50 341.70
Anglo American . . . . . . . . . . . .2473.00 +64.00 3015.50 1777.50 Diageo . . . . . . . . . . . . . . . . . . . 1105.00 –5.00 1176.00 922.50 Lloyds Banking Gp . . . . . . . . . . . .70.69 +1.28 77.61 45.30 Shire. . . . . . . . . . . . . . . . . . . . .1476.00 –2.00 1526.00 991.50
Antofagasta . . . . . . . . . . . . . . .1047.00 +44.00 1100.00 692.00 Dimension Data . . . . . . . . . . . . .120.30 –1.20 125.50 55.00 Logica . . . . . . . . . . . . . . . . . . . . 113.50 +2.30 149.10 100.80 Smith & Nephew . . . . . . . . . . . . .577.50 +5.00 700.50 465.80
Aquarius Platinum . . . . . . . . . . .270.60 +13.90 490.00 211.50 Domino’s Pizza . . . . . . . . . . . . . .419.00* +6.40 431.30 229.00 London Stk Exchange . . . . . . . . .662.00* +10.00 949.50 540.50 Smiths . . . . . . . . . . . . . . . . . . . 1181.00 +27.00 1242.00 764.00
ARM Holdings . . . . . . . . . . . . . . .320.00 +13.00 370.00 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .399.40 +1.30 496.50 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1582.00 +88.00 2198.00 1336.00 SOCO Intl . . . . . . . . . . . . . . . . . .456.70 +9.70 476.60 380.60
Arriva . . . . . . . . . . . . . . . . . . . . .772.50 — 782.50 428.20 DSG Intl . . . . . . . . . . . . . . . . . . . .25.41 +0.11 39.75 23.32 Man . . . . . . . . . . . . . . . . . . . . . .216.90 +6.50 373.60 199.60 Spectris . . . . . . . . . . . . . . . . . . .891.50 +8.50 949.00 561.00
Ashmore . . . . . . . . . . . . . . . . . . .289.60 +4.40 311.20 211.60 Dunelm . . . . . . . . . . . . . . . . . . . .391.00 +2.00 438.40 250.70 Marks & Spencer. . . . . . . . . . . . .338.80 +6.20 412.70 321.90
Astrazeneca . . . . . . . . . . . . . . .3317.50* +11.00 3376.00 2668.00 Easyjet . . . . . . . . . . . . . . . . . . . .360.80 +0.80 499.90 308.50 Meggitt . . . . . . . . . . . . . . . . . . . .274.70* +9.10 331.00 197.60 Spirax-Sarco Eng . . . . . . . . . . .1553.00 +52.00 1617.00 929.00
Atkins(Ws) . . . . . . . . . . . . . . . . .745.00 –2.50 801.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .408.00 +4.20 412.40 315.60 Melrose . . . . . . . . . . . . . . . . . . .217.20 –1.20 251.50 127.10 Spirent Comms . . . . . . . . . . . . . .127.70* +2.90 135.90 68.55
Autonomy Corp . . . . . . . . . . . .1602.00 +39.00 2012.00 1229.00 Electrocomponents . . . . . . . . . . .210.30 +3.10 245.00 142.90 Mercantile IT . . . . . . . . . . . . . . . .941.00 +8.50 1002.00 822.50 Sports Direct Intl . . . . . . . . . . . . .104.60 +0.60 134.00 81.80
Aveva . . . . . . . . . . . . . . . . . . . .1353.00 +13.00 1375.00 805.00 EnQuest . . . . . . . . . . . . . . . . . . . 119.30 +7.30 122.20 87.35 Michael Page Intl. . . . . . . . . . . . .382.50 +14.50 461.50 299.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1159.00* — 1190.00 522.50
Aviva . . . . . . . . . . . . . . . . . . . . .397.30 +19.40 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .398.90 +11.50 475.90 358.50 Millen & Copthorne . . . . . . . . . . .493.10* +12.30 514.50 297.90 St James’s Place . . . . . . . . . . . . .265.40* –1.30 296.90 194.40
Babcock International . . . . . . . . .524.50 +3.50 660.50 473.80 Eurasian Nat Res . . . . . . . . . . . .968.00 +37.00 1276.00 731.00 Misys . . . . . . . . . . . . . . . . . . . . .268.40 +2.40 281.70 173.90 Stagecoach. . . . . . . . . . . . . . . . .167.30 +2.20 204.90 126.20
BAE Systems . . . . . . . . . . . . . . .313.20 +8.50 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .610.00 +4.50 630.00 252.00 Mitchells & Butlers . . . . . . . . . . .298.20 +2.70 343.90 228.30 Standard Chartered . . . . . . . . . .1773.50* +58.50 1927.00 1340.00
Balfour Beatty . . . . . . . . . . . . . . .258.30 +1.90 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .634.00 +14.50 664.50 489.00 MITIE . . . . . . . . . . . . . . . . . . . . .195.40 +1.50 281.70 192.20 Standard Life . . . . . . . . . . . . . . .213.60 +3.20 237.00 170.00
Barclays . . . . . . . . . . . . . . . . . . .327.10* +8.80 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .90.65 –0.60 96.80 79.00 Mondi . . . . . . . . . . . . . . . . . . . . .487.40 +19.70 488.00 263.50 SuperGrp . . . . . . . . . . . . . . . . .1047.00 +54.50 1047.00 499.00
Barratt Development . . . . . . . . . . .94.40 +0.40 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .299.00* +11.50 396.20 138.00 Monks Inv Tst . . . . . . . . . . . . . . .296.00 +3.10 321.20 240.00 TalkTalk . . . . . . . . . . . . . . . . . . .126.10 +0.60 147.10 106.60
BBA Aviation . . . . . . . . . . . . . . .193.20 +4.30 220.00 136.60 FirstGroup . . . . . . . . . . . . . . . . .351.90* +1.40 448.80 331.20 Morrison Wm . . . . . . . . . . . . . . .281.60 +7.20 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .425.50 +20.60 501.50 341.40
Beazley. . . . . . . . . . . . . . . . . . . . 115.10* +0.50 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .272.80* +4.80 297.20 229.50 Murray Intl Tst . . . . . . . . . . . . . . .855.00* +1.00 893.50 632.00 Tate & Lyle . . . . . . . . . . . . . . . . .423.00 +5.00 509.00 382.00
Bellway. . . . . . . . . . . . . . . . . . . .544.00 +3.00 927.50 537.50 Fresnillo . . . . . . . . . . . . . . . . . .1051.00 +33.00 1139.00 539.50 National Express. . . . . . . . . . . . .222.40 +2.30 258.60 155.86
Berkeley . . . . . . . . . . . . . . . . . . .802.50 +2.00 984.00 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .266.10 +4.30 285.70 209.40 National Grid . . . . . . . . . . . . . . .536.00* +4.50 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .27.81 +0.35 54.90 24.29
BG . . . . . . . . . . . . . . . . . . . . . .1039.50* +16.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .473.00 +5.20 484.00 370.00 Next . . . . . . . . . . . . . . . . . . . . .1955.00 +13.00 2360.00 1601.00 Telecity . . . . . . . . . . . . . . . . . . . .456.00 +11.20 485.00 311.30
BHP Billiton . . . . . . . . . . . . . . .1916.00 –46.50 2346.00 1481.00 GKN . . . . . . . . . . . . . . . . . . . . . .138.60* +2.20 155.00 100.20 Northumbrian Water . . . . . . . . . .322.00* — 341.30 219.90 Templeton Emrg Mkts . . . . . . . . .550.00 +6.50 598.00 390.00
BlackRock Mining . . . . . . . . . . . .570.00 +7.50 654.50 413.00 GlaxoSmithKline . . . . . . . . . . . .1217.00* –1.00 1347.00 1088.00 Old Mutual . . . . . . . . . . . . . . . . .125.00 +3.60 130.20 85.80 Tesco . . . . . . . . . . . . . . . . . . . . .404.45 +5.95 454.90 361.20
Bluecrest Allblue GBP . . . . . . . . .167.50 –0.80 168.30 136.20 Great Portland Estates . . . . . . . .313.60 +5.60 332.10 236.60 Pace . . . . . . . . . . . . . . . . . . . . . .210.00 — 243.80 145.00 Thomas Cook . . . . . . . . . . . . . . .181.50 +5.90 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .44.75 +0.75 49.50 33.50 Greene King . . . . . . . . . . . . . . . .403.80* +2.30 504.00 372.50 Partygaming . . . . . . . . . . . . . . . .269.00 +6.00 339.70 205.80 Tomkins . . . . . . . . . . . . . . . . . . .321.30 — 325.70 155.00
BP . . . . . . . . . . . . . . . . . . . . . . .408.00 –1.75 658.20 296.00 Halfords . . . . . . . . . . . . . . . . . . .480.00 +7.00 562.50 324.00 Pearson . . . . . . . . . . . . . . . . . . .991.50 +15.50 1069.00 695.00 Travis Perkins . . . . . . . . . . . . . . . 811.00 +9.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . . .987.00 –2.00 1017.00 709.00 Halma . . . . . . . . . . . . . . . . . . . . .275.00* +2.50 298.70 186.60 Pennon . . . . . . . . . . . . . . . . . . . .589.50* +2.00 613.00 434.40 TUI Travel . . . . . . . . . . . . . . . . . .206.30 +7.20 313.90 189.20
British Airways . . . . . . . . . . . . . .221.20 +5.00 255.80 169.80 Hammerson . . . . . . . . . . . . . . . .369.40 +5.30 460.30 332.20 Persimmon . . . . . . . . . . . . . . . . .346.30 +1.90 534.50 340.20 Tullett Prebon . . . . . . . . . . . . . . .370.60 +3.50 436.20 261.20
British Amer. Tob . . . . . . . . . . .2280.50 +19.50 2335.50 1832.00 Hargreaves Lansdown . . . . . . . .403.80 –0.20 408.40 214.00 Petrofac . . . . . . . . . . . . . . . . . .1349.00 +46.00 1372.00 849.00 Tullow Oil . . . . . . . . . . . . . . . . .1302.00 +40.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .436.70 +7.40 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . . .90.40 +1.45 119.00 88.05 Petropavlovsk . . . . . . . . . . . . . . 1106.00 +72.00 1370.00 617.00 UK Commercial Prop. . . . . . . . . . .76.55* –0.05 84.90 65.25
British Land . . . . . . . . . . . . . . . .459.00 +7.60 531.00 416.00 Henderson . . . . . . . . . . . . . . . . .136.90 +5.40 157.80 110.60 Premier Farnell . . . . . . . . . . . . . .229.60 +0.20 252.60 140.60 Ultra Electronics . . . . . . . . . . . .1693.00 +34.00 1694.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .480.20 +1.20 518.00 324.80 Heritage Oil. . . . . . . . . . . . . . . . .336.70* +2.30 585.00 324.20 Premier Oil . . . . . . . . . . . . . . . .1485.00 –46.00 1610.00 984.00
Brown(N.) . . . . . . . . . . . . . . . . . .225.80 –0.50 284.30 204.80 Hikma Pharma . . . . . . . . . . . . . .727.00 +3.50 746.00 440.00 Provident Financial . . . . . . . . . . .827.00 +9.00 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1724.00* +21.00 2024.00 1602.00
BSkyB . . . . . . . . . . . . . . . . . . . .710.00 +2.50 732.00 521.00 Hiscox . . . . . . . . . . . . . . . . . . . .348.00 –5.10 369.30 299.60 Prudential . . . . . . . . . . . . . . . . . .583.50 +28.50 665.00 475.70 United Utilities . . . . . . . . . . . . . .590.50 — 606.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .139.00* +1.80 151.00 108.40 Hochschild Mining . . . . . . . . . . .326.40 +11.40 370.60 220.00 PZ Cussons . . . . . . . . . . . . . . . .349.20 +5.70 373.20 210.10 Utd Business Media . . . . . . . . . .555.00 +4.00 579.50 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . .699.50 +11.50 784.50 533.00 Home Retail . . . . . . . . . . . . . . . .220.80 +4.60 336.50 208.50 Qinetiq . . . . . . . . . . . . . . . . . . . .109.90 +0.50 179.10 107.40 Vedanta Resources . . . . . . . . . .2220.00 +67.00 2967.00 1616.00
Burberry . . . . . . . . . . . . . . . . . . .847.50 +18.50 891.50 450.20 Homeserve . . . . . . . . . . . . . . . . .469.00 +0.40 488.20 435.40 Randgold Resources. . . . . . . . .5725.00 +140.00 6600.00 3351.00 Victrex . . . . . . . . . . . . . . . . . . . 1120.00 +18.00 1320.00 613.50
Cable & Wire Comms . . . . . . . . . .60.45 +0.20 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .667.70 +13.20 766.80 595.20 Reckitt Benckiser . . . . . . . . . . .3230.00* +63.00 3667.00 2694.00 Vodafone . . . . . . . . . . . . . . . . . .153.60 — 155.50 124.85
Cable & Wire Wwide . . . . . . . . . . .61.65 –0.05 94.80 61.30 Hunting . . . . . . . . . . . . . . . . . . .583.50 +22.00 659.50 423.20 Reed Elsevier . . . . . . . . . . . . . . .539.50* +9.50 566.00 414.00 Weir . . . . . . . . . . . . . . . . . . . . . 1194.00 +12.00 1275.00 599.00
Cairn Energy. . . . . . . . . . . . . . . .486.40 –6.80 497.60 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .405.00* +13.00 478.30 291.70 Regus . . . . . . . . . . . . . . . . . . . . . .72.50 +0.65 125.50 68.65 WH Smith . . . . . . . . . . . . . . . . . .404.80 –1.00 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1586.00 +22.00 1759.00 1496.00 IG . . . . . . . . . . . . . . . . . . . . . . . .499.20 +15.90 499.20 291.00 Renishaw . . . . . . . . . . . . . . . . . .880.00 +11.00 915.50 420.00 Whitbread . . . . . . . . . . . . . . . . .1393.00 +22.00 1645.00 917.00
Capita . . . . . . . . . . . . . . . . . . . . . 711.50 +11.00 829.50 643.50 Imagination Tech Gp . . . . . . . . . .346.00 +5.60 358.30 149.75 Rentokil Initial . . . . . . . . . . . . . . .100.10 +1.95 140.20 94.10 William Hill . . . . . . . . . . . . . . . . .168.70 +2.70 217.80 160.50
Capital & Counties . . . . . . . . . . . 116.30 +1.00 125.40 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .715.50 +16.00 786.00 362.10 Resolution . . . . . . . . . . . . . . . . .254.30 +8.30 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .443.00 +9.00 487.00 365.50
Capital Shopping Centres . . . . . .328.60 +7.70 580.00 300.10 Imperial Tobacco. . . . . . . . . . . .1879.00* +14.00 2159.00 1672.00 Rexam . . . . . . . . . . . . . . . . . . . .307.40 +5.10 348.80 250.50
Carillion . . . . . . . . . . . . . . . . . . .300.70 +7.50 361.90 263.90 Inchcape. . . . . . . . . . . . . . . . . . .270.00 +2.90 347.00 235.00 Rightmove . . . . . . . . . . . . . . . . .599.00 +0.50 729.00 404.50 Wolseley . . . . . . . . . . . . . . . . . .1333.00 +22.00 1742.00 1155.00
Carnival . . . . . . . . . . . . . . . . . .2195.00 +54.00 2937.00 1747.00 Informa . . . . . . . . . . . . . . . . . . . .385.90 +7.70 439.40 252.10 Rio Tinto . . . . . . . . . . . . . . . . . .3406.00* +99.00 4104.00 2218.50 Wood Group (John). . . . . . . . . . .358.10 +9.20 411.70 277.00
Catlin . . . . . . . . . . . . . . . . . . . . .351.40 +1.30 394.60 303.20 Inmarsat . . . . . . . . . . . . . . . . . . .686.50 +0.50 831.00 491.00 RIT Capital Partners . . . . . . . . . 1113.00 +6.00 1215.00 913.50 WPP . . . . . . . . . . . . . . . . . . . . . .678.00 +7.50 744.00 461.90
Centamin Egypt . . . . . . . . . . . . .172.00 +3.00 174.75 80.00 Intercontl Hotels . . . . . . . . . . . .1068.00 –1.00 1244.00 697.50 Rolls Royce . . . . . . . . . . . . . . . .568.00 +8.50 631.50 421.10 Xstrata . . . . . . . . . . . . . . . . . . .1059.50 +45.50 1344.50 735.50
Centrica . . . . . . . . . . . . . . . . . . .326.40 +2.20 333.10 216.90 Intermediate Capital . . . . . . . . . .279.50* +13.90 332.00 233.50 Rotork . . . . . . . . . . . . . . . . . . .1519.00 +41.00 1537.00 933.00 LONDON TOP 250 BY MARKET CAPITALISATION
Charter Intl . . . . . . . . . . . . . . . . .647.00* +14.00 855.50 560.50 Intertek . . . . . . . . . . . . . . . . . . .1674.00 +28.00 1745.00 1103.00 Royal Bank Of Scot . . . . . . . . . . . .47.25 +1.33 58.95 28.25
Chemring . . . . . . . . . . . . . . . . .2710.00 +49.00 3711.00 2017.00 Intl Personal Fin . . . . . . . . . . . . .236.00 +4.20 283.00 128.25 Royal Dutch Shell A . . . . . . . . .1803.50* +31.50 2068.50 1559.50 * Ex-Dividend † Suspended
Chloride Group . . . . . . . . . . . . . .373.60 — 390.50 138.60 Intl Power . . . . . . . . . . . . . . . . . .362.70 –2.00 384.10 248.20 Royal Dutch Shell B . . . . . . . . .1736.00* +33.00 1997.50 1528.00
Close Bros . . . . . . . . . . . . . . . . .679.00 +15.00 806.50 657.00 Invensys . . . . . . . . . . . . . . . . . . .253.40 +9.90 350.30 234.50 RSA Insurance . . . . . . . . . . . . . .125.40* +0.90 142.00 114.10 www.interactivedata.com

Banks and miners push FTSE US results season

to its highest close in a week ends on a high note
moves into the market. But insurers were the centre of Prudential International Investments
THELONDON The index has surpassed its 200-day
moving average of 5,340.04 but on
attention yesterday, with Aviva gain-
ing 5.1 per cent and traders citing THENEW YORK Advisers.
With 93 per cent of S&P 500 compa-

REPORT very thin volumes, with the index

trading at only around 62 per cent of
its 90-day average.
talk that French peer Axa may be
interested in an approach. Axa and
Aviva declined to comment.
REPORT nies now having reported, earnings
grew 38 per cent in the second quar-
ter. Around 75 percent of companies
Energy shares also performing well M&A speculation on the sector in the S&P 500 exceeded expectations.

F U
INANCIAL stocks and commodi- along with crude, which snapped a resurfaced last week when Aviva S stocks rose yesterday after Economic data was mixed, howev-
ty companies pushed Britain’s five-day losing streak to rebound rejected a £5bn bid from peer RSA earnings from Wal-Mart and er. Industrial production rose and
top share index up for a third above $76 a barrel. Insurance Group. Home Depot and a $39bn wholesale prices rose, allaying some
session by the close on Tuesday, Oil majors Royal Dutch Shell and Prudential, seen as vulnerable to takeover bid in the agriculture fears of deflation, but housing starts
as fears about a global economic slow- BG Group rose 1.8 and 1.6 per cent an approach after it failed in its bid to sector bolstered confidence in the cor- suggested that sector remains weak.
down abated and raw material prices respectively. buy the Asian assets of AIG, also porate outlook. Most economic data in recent weeks
gained. BP, however, fell 0.4 per cent as added 5.1 per cent. The Dow Jones industrial average have portrayed a slowing recovery,
The FTSE 100 ended up 74.45 technical issues on Monday muddled British Airways, up 2.3 per cent, led was up 103.84 points, or 1.01 per cent, driving investors away from equities.
points, or 1.4 per cent, at 5,350.55, its the timing of its planned final kill of a clutch of travel-related firms higher at 10,405.85. The Standard & Poor’s The materials sector handily out-
highest close in a week. its blown-out Gulf of Mexico oil well. after a threatened walk-out by airport 500 Index was up 13.16 points, or 1.22 performed the broad market after
Miners were firmer, supported by Edinburgh-based Cairn Energy fell ground staff was averted following per cent, at 1,092.54. The Nasdaq BHP Billiton made an unsolicited
metal prices that rose on expecta- 1.4 per cent, shedding some of the last-ditch talks on Monday. Composite Index was up 27.57 points, $39bn takeover bid for Potash. The
tions of strong physical demand and previous session’s gains. Travel firm TUI Travel gained 3.6 or 1.26 per cent, at 2,209.44. world's largest fertilizer maker reject-
a weaker dollar. Vedanta Resources said on Monday per cent and mid-cap peer Thomas Volume continued to be low with ed the offer as inadequate.
Lonmin was the stand-out gainer, it would spend up to $9.6bn acquir- Cook rose 2.9 per cent. 6.99bn shares traded on the com- Potash’s US-traded stock surged
up 5.9 per cent, while Xstrata and ing as much as 60 per cent of Cairn bined NYSE Arca, Nasdaq and 27.7 per cent to $143.17. Fertilizer pro-
Kazakhmys added 4.5 and 3.7 per India, in which Cairn Energy holds ANALYSIS l FTSE 5,350.55 American Stock Exchanges, signifi- ducer CF Industries jumped 4.7 per
cent respectively. 62.4 per cent. 5,500
17 Aug cantly lower than last year's daily cent to $88.53 after Goldman Sachs
But BHP Billiton was the biggest British consumer price inflation average of 9.65bn. upgraded the stock, while the materi-
5,400
blue-chip faller, down 2.4 per cent as slowed in July but, as expected, Wal-Mart Stores was up 1.9 per cent als sector gained 2.3 per cent.
5,300
it launched an unsolicited $38.6bn remained above 3 per cent, slightly at $51.38 and Home Depot gained 4.8 “The increase in M&A shows CEOs
takeover bid for Potash, which was adding to the FTSE’s gains as con- 5,200 per cent to $28.69 on better than and CFOs have more confidence in
rejected as “grossly inadequate”. cerns about the potential for higher 5,100 expected results. the outlook for the economy and are
The index fell 1.1 per cent last week interest rates dissipated. 5,000 “There has been a tug of war willing to start to deploy some of the
and is still down over 8 per cent since Banks, which have been ham- 4,900 between weak economic data and high cash balances, which have built
fears on Europe’s government strung by worries over the economic 4,800 strong corporate results. Today, the up in recent months,” said Michael
finances erupted in mid-April, and recovery in recent days, bounced 4,700 earnings finally won,” said John Sheldon, chief market strategist at
investors are still wary of making big higher with Barclays up 2.8 per cent. 17 May 7 Jun 25 Jun 15 Jul 4 Aug Praveen, chief investment strategist at RDM Financial.
CITYA.M. 18 AUGUST 2010 Investment | Fund Management 15

Investors should look East

EMERGING MARKET
DEBT FUNDS

if they want strong yields ABERDEEN GLOBAL - EMERGING MARKETS

BOND FUND
Launched in August 2001, this fund is man-
Emerging market aged by Aberdeen’s emerging markets bond
team and has $531.1m in assets under man-
bond funds are agement. It aims to create long-term total
return by investing in fixed interest securities
issued by emerging market firms and gov-
increasingly popular ernment-related bodies. It is a Luxembourg-
domiciled SICAV with a minimum
with the West, writes investment of $1,500 and a total expense
ratio (TER) of 1.74 per cent. 60 per cent of
Kathleen Brooks the fund is allocated to government bonds,
24.6 per cent to corporate bonds and 6.8 per
cent to quasi-sovereign bonds, with the

F
IXED income is at a cross roads. While
yields on G3 government bonds con-
tinue to fall to record lows, investors
are left in a quandary: put up with
low yields because these are the “safest”
bonds in the world, or sell their stakes and
move into the higher-yielding debt of
emerging markets.
Since the onset of the European sover-
eign debt crisis, the reliability of developed-
world debt has been called into question.
This has created an opportunity for emerg-
ing markets’ bond funds and investor inter-
est in this asset class has been growing
since the start of this year. According to
EPFR Global, weekly inflows to global
emerging market bond funds were $811m
as of 11 August. And there is definitely
room for this sub-asset class to improve –
inflows to US Treasuries run into billions of
dollars every week.
It’s getting easier for investors to get
exposure to this emerging market debt as
more fund managers jump on the band-
wagon. In May, Aberdeen Asset
Management launched its local currency
emerging market debt fund and yesterday,
fund management firm ACPI launched an
Indian Fixed Income fund.
The Bric countries look particularly
attractive for investors. Not only are public
finances in Brazil, China and – to a lesser
extent – India, in relatively good shape, but
currencies in these countries are appreciat-
ing, which adds to total returns. Steve
O’Hanlon, fund manager for ACPI’s India
fund, also notes that liquidity in these mar-
kets has been improving for a number of
years, resulting in deeper markets. For
example, the Indian authorities have
increased the amount of government debt
that can be bought by foreigners from $5bn
to $20bn in the past nine months. But this
is still only equivalent to 5 per cent of all
debt issued by the Indian government and
there is scope for this to increase in the
coming years.
ACPI plans to invest in both corporate
and sovereign debt in India and it is target-
ing an annual risk adjusted return of 10-12
per cent: “India has a sticky inflation rate
and the Reserve Bank of India is basically
behind the curve. The bank has to balance
growth with inflation, and if they don’t
want to hike rates any further, then they
will have to let the currency appreciate to
keep inflation at bay,” explains O’Hanlon.
A strong growth outlook in the emerg-
ing world is also making corporate debt
look attractive. Mike Turner, head of global
asset allocation at Aberdeen Asset
Management, says that corporate bond
markets, especially in Asia, have huge
potential: “Companies are not leveraged
and the fundamentals look good too.
Growth should be self-sustaining in the
coming years as domestic demand picks
up. Even if global growth becomes unstuck
in the East, then governments have the fire-
power to help support demand.”
After spending the last decade restruc-
turing after the Asian and Russian finan-
cial crises at the end of the 1990s, bond
markets in the emerging world now look
fairly robust. In Russia, for example, the
bond market has returned 19 per cent in
the last 12 months. Although there are still
risks, Evgeny Korovin from Troika Dialog
Asset Management, says that bond funds
have performed fairly well in recent
months when markets have been particu-
larly tricky because of the European sover-
eign debt crisis: “If you look back at the
market performance in 2008, then you can
see lots of losses. However, during the peak
of the European sovereign debt crisis,
bonds were remarkably resilient.” For
example, the Russian corporate bond index
was flat in May and rose by 2 per cent in
June, while other bond markets were tum-
bling because of the crisis in Europe.
China, the world’s largest holder of US
Treasuries, sold more than $21bn of its
holdings earlier this week, possibly because
yields on short-term US debt had fallen too
far. If investors feel likewise, then the hunt
for yield should shift to the debt markets of
the fast-growing, financially strong emerg-
ing markets.
Emerging countries have spent the last
decade restructuring after the Asian and
Russian financial crises in the 1990’s
remainder in cash. It has outperformed the
benchmark so far this year and over the past
five years. Its biggest country weighting is
to Mexico at 11.2 per cent, followed by Brazil
with 8.7 per cent.
ASHMORE EMERGING MARKETS LIQUID
INVESTMENT PORTFOLIO
Launched in October 1992, this is Ashmore’s
flagship emerging market debt fund and it is
managed by an experienced team of analysts,
researchers and economists. Assets under man-
agement are just over $3.5bn and the fund has
outperformed the benchmark JP Morgan
EMBI Global Diversified Composite index since
inception, up 17.2 per cent compared to 12.23
per cent. Investments are mostly dollar-denom-
inated bonds and loans. In terms of country
weightings, 14.12 per cent is allocated to the
Cayman Islands, 10.2 per cent to Indonesia,
9.78 per cent to Russia, 8.47 per cent to Mexico
and 7.55 per cent to Brazil. More than four-
fifths is invested in external debt while 28.16
percent is in special situations. The minimum
investment is $100,000 and the yield is 7.8 per
cent.
Indian fixed income
funds are the next
stage for emerging
market investments
TEMPLETON EMERGING MARKETS BOND
FUND
Picture: GETTY Franklin Templeton is well-known for its quali-
ty emerging markets investment team and
the performance of its Emerging Markets
Bond Fund, led by Michel Hasenstab, is no
exception. Since its inception in July 1991, the
fund has gained 89.91 per cent compared to
65.89 per cent for the benchmark. The
weighted average credit quality of the invest-
ments is BBB and the fund now has £4.1bn of
assets under management. The total expense
ratio (TER) is 1 per cent and the average num-
ber of holdings is 150. The Luxembourg-domi-
ciled SICAV is overweight Asia ex-Japan,
particularly South Korea and Malaysia.
Almost half of the fund is allocated to dollar-
denominated assets, with another 40 per cent
to emerging Asian currencies. Morningstar
gives the fund a five star rating.

FUND MANAGEMENT NEWS

BY KATHLEEN BROOKS
Investors should check performance fees
MORE DISCLOSURE FOR PERFORMANCE FEES
This was the recommendation made by
Lipper, the independent fund research compa-
ny. It conducted a survey looking at whether
performance fees actually help align the inter-
ests of fund managers and investors. It found
that two-thirds of UK funds can charge a per-
formance fee if they beat a falling benchmark.
Lipper recommends that since so many funds
use performance fees, the industry should
ensure there is clear disclosure of costs in
order to help investors understand the fees
that they are obliged to pay, when they should
Picture: REUTERS pay them and how much they are.
LATEST HEDGE FUND PERFORMANCE
Hedge funds have had a fairly lacklustre year
so far, according to the latest data from the
Dow Jones Credit Suisse Hedge Fund index. It
reported that overall, hedge funds made
returns of 1.59 per cent in July, bringing the
year-to-date return up to 2.2 per cent. The
best-performing strategy in July was invest-
ing in emerging markets, which posted an
average return of 3.52 per cent. Since the
start of the year, fixed income arbitrage has
been the top performer. Funds that use this
startegy have returned an average of 6.79 per
cent this year and 1.2 per cent in July.
STANDARD LIFE CHOOSES SCHRODERS
The Schroder Global Alpha Plus fund and
Schroder Asian Income Maximiser are now
available on Standard Life’s fund platform
FundZone. The pension and life insurance
provider said it was adding these funds due to
the amount of attention they both receive from
financial advisers. The Global Alpha Plus fund
aims to outperform the MSCI global equity
index. This fund is managed by Virginie
Maisonneuve, head of global and international
equities, and Jonathan Armitage, head of US
equities. The Asian fund is also a top performer,
and targets a gross yield of 7 per cent a year.
 16 Investment | Foreign Exchange CITYA.M. 18 AUGUST 2010

EURO FEARS
MAY WELL BE
OVERBLOWN
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT

A
S TRADING in the currency markets slows
to a trickle during the last few weeks of
summer and thoughts turn to the beaches
of St Tropez and the Hamptons rather than
the latest piece of economic news, don’t be fooled
by the lull in volatility. Underneath the placid price
action rages a debate that is likely to determine the
direction of the euro in the second half of the year.
After staging a fast and furious rally from its
yearly lows, euro-US dollar has seen a significant
correction that has taken the pair 500 points off
its recent swing highs. The decline in the euro was
precipitated by renewed concerns about growth in
the peripheral Eurozone economies. Euro bears
argue correctly that while northern European
economies such as Ireland may be able to recover
from their economic predicament through export
growth, southern European economies such as The Mexican peso is gaining in popularity Picture: GETTY
Spain, Portugal and Greece which do not have a
competitive export sector, are unlikely to generate

Forex has a new order

enough growth to overcome the steep austerity
measures undertaken by their respective govern-
ments. As a result, sovereign debt spreads have
widened once again sending the euro lower.
Yet even if this thesis is true, the result may not
be detrimental to the euro as the market believes.
After all, the collapse in the single currency in
early May was driven by the very real fears of a
possible breakup of the Eurozone. However, after The FX hierarchy is tives”. The most recent CFTC data also
showed that non-commercial long posi-
China is likely to cap any strength. The
Mexican peso’s connection with the US
the €1 trillion commitment by EU members
towards a stability fund, the risk of fracture in the getting shaken up, tions on both the Mexican peso and the
Canadian dollar jumped by 18,121 and
through the North American Free Trade
Association (Nafta) limits gains, according
union has diminished significantly. Meanwhile EU
leaders such as Germany and France continue to writes Jessica Mead 6,281 respectively.
For an FX trader in search of yield these
to BNP Paribas’ Ian Stannard, but it
remains cheap relative to other Latin
post better-than-expected growth as their currencies’ interest rate differentials are American currencies. And while inflation

economies outperform the US. Furthermore, euro
bulls make the case that Switzerland and
Scandinavia, which are not part of the Eurozone
but which are critical trading partners of the EU,
can offset any drop in demand from Southern
European economies.
This week, the economic calendar is relatively
light on both sides of the Atlantic, but if the data
from core European economies continues to sur-
prise to the upside, the rally in the euro could get a
second wind.
Boris Schlossberg and Kathy Lien are directors of
currency research at GFT. Read commentary at
www.GFTUK.com/commentary or e-mail
borisandkathy@gftuk.com.
I
T WAS not so very long ago that the
dollar was firmly in favour among
currency traders seeking a safe haven
from UK political upheaval and the
sovereign debt turmoil in the Eurozone.
But now the greenback is struggling too
thanks to a raft of poor economic data,
fears of a double-dip in the American hous-
ing market and the Fed’s decision to rein-
vest redemptions of mortgage-backed
securities. While the euro and the pound
are more attractive than the dollar, many
traders are choosing to eschew them.
So if not G3 currencies, what to own? Kit
Juckes, head of foreign exchange at Societe
Generale, says: “The ‘currency du jour’ is
the yen, but getting all excited about dol-
lar-yen heading to ¥80…feels like joining a
party just as the booze is about to run out.”
In his view, “the Australian dollar, the
Polish zloty, even the Canadian dollar –
unloved by most at the moment – and the
Mexican peso all look like better alterna-
attractive. The cost of borrowing is 4.5 per fears could force the Polish MPC’s hand to
cent in Australia, 3.5 per cent in Poland, raise rates, this is not expected to happen
4.5 per cent in Mexico and 0.75 per cent in any time soon, providing little upward
Canada. The latter, although low, is 50 impetus for the zloty.
basis points above the US rate and is on the All four lack upside but any gains may
rise – we have already seen two hikes so far be more secure than those in G3 curren-
this year and analysts are pencilling in fur- cies, which are liable to reverse at a
ther tightening later in 2010. moment’s notice.
But these currencies have suffered from
renewed risk aversion. In theory, this ANALYSIS l Change in speculative long positions
should present an ideal opportunity for FX Source: CFTC in the week ending 10 August
traders to jump in at cheaper levels. But Canadian dollar
while they are arguably more appealing in + 6,281
the long run than any of the G3 currencies Swiss franc -3,527
and a better play on global economic
growth, none of these four currencies Mexican peso +18,121
appears to have much upside remaining in
the near term. British pound +4,857
The Australian and Canadian dollars –
commodity currencies – are inextricably Euro -4,613
linked to the world economy and indus-
try’s appetite for resources. Continued
-5,000 0 5,000 10,000 15,000 20,000
slow global growth and tightening in

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CITYA.M. 18 AUGUST 2010 Investment | Foreign Exchange 17

THE
Israel’s shekel TIPSTER
BET ON FEAR
IN ANXIOUS
is held back by PERIODS

O
FTEN referred to as the “fear index” the
volatility index, or Vix, is a measure of

central bank investor sentiment. As it rises from its

lows, a higher reading points to increasing
concerns and uncertainty. ETX Capital is quot-
ing 30.20-30.35 for the September contract.
Cable has struggled to break new ground to
the upside and technically, it looks like any
short-term rallies will be sold. Key resistance is
Investors need to be aware that the BOI is up around $1.5800-25, with stops building
above $1.6000. ETX Capital’s current spread on
ready to intervene, writes Kathleen Brooks cable is $1.5576-$1.5582.
The yen has been consistently performing
well against the dollar, and over the last few
weeks the dollar-yen rate has been flirting

A
S THE Federal Reserve announced
that interest rates would remain
low for the foreseeable future ear-
lier this month, the Bank of Israel
(BOI) has been getting ready to hike inter-
est rates.
The BOI, which is led by Stanley
Fischer, upped interest rates on the back
of a spike higher in inflation expecta-
tions to 3.2 per cent. And there could be
more hikes to come. Yesterday, GDP data
for the second quarter was released,
which showed that the economy expand-
ed by 4.7 per cent, the fastest pace for two
years. While a strong economic backdrop
and a rising interest rate differential
with the US and Europe should indicate
further gains for the shekel, investors
need be aware of the BOI.
The Bank faces a difficult balancing act
in the months to come: not only does it
have to cap inflation expectations but it
has to keep the shekel in check so it does-
n’t make Israeli exports less competitive.
“The BOI isn’t the only central bank
struggling with this problem,” says
Henrik Gullberg at Deutsche Bank. But
Gullberg adds that, unlike other central
banks, the BOI tends to intervene with
some force when the shekel is above their
comfort zone. “The market is aware that
the BOI is active in terms of managing its
currency and that puts a cap on how
quickly the shekel can appreciate.”
Phil McHugh from Currencies Direct
says that the threat of BOI intervention
should keep the shekel range-bound for
the rest of the year: “The Bank tends to
intervene around the New Israeli shekel
(NIS) 3.70 mark against the dollar. That is
where the pain starts setting in for
exporters.”
There is no clear medium or long-term
outcome for the shekel, adds McHugh,
which could make it fairly choppy for the
foreseeable future. He would suggest that
investors consider buying the shekel
when it reaches the NIS 3.87 level against
the dollar (currently it is NIS 3.78).
However, investors need to be nimble and
get out before it reaches the NIS 3.70
mark.
But if the global growth outlook picks
up, specifically if US growth looks like it
is getting a second wind, then that is a
“different kettle of fish,” says McHugh, as
the BOI might be more flexible with how
far it will allow the shekel to appreciate.
Likewise, Societe Generale warns that
political tension could weigh on the cur-
rency. If there is an escalation of tensions
between Israel and Lebanon, as there
have been in recent days, then the shekel
could be in for a period of weakness.
with going south of ¥85, with the minimum
reached at ¥84.70. Trading against a trend this
strong is risky, so it’s wise to maintain a short
position. But if the market goes above ¥86.50,
it could be the time to buy. Cantor Index offers
a spread of ¥85.44-¥85.46.
Dollar-Swiss franc has been range-bound
between SFr1.0350 and SFr1.060 for a month
now and looks like it is trying to establish a bot-
tom around the SFr1.0360 level. Recent pat-
terns suggest we may see a short-term move
back to SFr1.050 area, which looks like an area
So if investors want to ride on the coat- The Azrieli Towers in to book profits or even consider a short trade.
tails of strong Israeli growth, they need the heart of Tel Aviv’s Spread Co offers a spread on dollar-Swiss franc
to be nimble and watch out for signals business district of SFr1.0442-SFr1.0445.
from the BOI. Against the euro, the Swiss franc has traded
back near to levels seen in July, with CMC
Markets offering a spread for euro-Swiss
ANALYSIS l Dollar-Israeli shekel performance over the last 12 months. franc of SFr1.3405-1.3408.
3.9 NIS/$ Despite the curve ball of the worse-than-
forecast German ZEW reading of consumer
3.85 sentiment for August, the single currency is
still gaining ground over the dollar. Eurozone
3.8
inflation remains far from weak, while the US
economy edges ever closer to the abyss of a
double-dip recession, so it seems an obvious
3.75 conclusion to draw that European Central
Bank yields will start to improve first. This in
3.7 turn should keep the euro relatively favoured
and the current IG Index price on euro-dollar
3.65 is $1.2874-$1.2875.
Sep Nov Jan Mar May Jul Juliet Samuel

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
DAVID RODRIGUEZ JOHN KICKLIGHTER JOEL KRUGER

My pick: Short euro-US dollar
Expertise: System trading
Average time frame of trades: 2-10 weeks
I have been looking for an opportunity to fade the euro-dollar recov-
ery for a while now. After a long downtrend, the euro posted a large
correction but I believe that the overall shift lower remains intact.
With that in mind, I will go short of the euro at market ($1.2900) or
better, placing maximum risk above $1.3200. This is a wide stop,
but nonetheless I believe $1.22 and $1.19 are reachable targets.
My pick: Long dollar-Swiss franc above SFr1.06, short cable below $1.5500.
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
Last week was defined by big moves and impressive momentum. There
isn’t much in the way of scheduled fundamental event risk to keep risk
trends moving, so it is better to let trades come to me rather than forc-
ing one. I still like dollar-Swiss franc in a break above SFr1.06 but a new
pair to add is a sterling-dollar short below $1.55 with a stop at $1.5725
and a target of $1.52. However, remember that patience is key with this
trade.
My pick: Buy dollar-yen at ¥84
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
The market has been under some intense pressure and now looks
poised for a fresh wave of declines below the recently-set multi-
year lows at ¥84.70. But with technical studies starting to look
stretched, we don’t see the drop below ¥84.70 as sustainable and
would look to take advantage of any additional weakness as an
opportunity to build into a core long position. Cyclical studies are
supportive with the market likely to carve a major base.
 City Focus
18
High achievers look beyond red bricks
Results day looms,
but college is not the
be-all and end-all,
writes Dorothy Wood
T
OMORROW is a date that thousands
of families across England and Wales
will have indelibly committed to
memory. Far from being merely
another summer’s day, Thursday 18 August
2010 is A-Level “results day”, a make-or-
break day for the career and life plans of
thousands of 17 and 18-year-olds.
For many, results day will simply con-
firm their passage to university. Indeed, the
progression of those in sixth form to uni-
versity is often the default expectation,
especially over the past decade. The last gov-
ernment often quoted 50 per cent of school
leavers going onto university as a policy
aim: earlier this year, the then-higher edu-
cation minister, David Lammy MP, told a
special young persons’ edition of Question
Time that: “Having a degree is always better
than not having a degree in the first place.”
But is Lammy right? This year, more
young people than ever will be disappoint-
ed. The race for university places is getting
tougher, with applicants re-applying,
grades going up, and spending cuts affect-
ing the number of places available.
For the estimated 170,000 young people
in the UK who will miss out on their univer-
sity choices this year and for the new grad-
uates entering a sluggish job market with a
combined £26.8bn worth of student debt,
the idea that university is the be-all and
end-all is a bit of a kick in the teeth.
| Accounting
NOT THE ONLY OPTION
Just as this year’s cohort of sixth form stu-
dents are set to embark on their post-
school educational career, another cohort
are just finishing it – and they’re not at
university either.
Next Monday sees 196,000 students
around the world find out the results of
their Association of Chartered Certified
Accountants (ACCA) exams. The ACCA qual-
ification is a non-university professional
qualification that is studied by over 400,000
people worldwide.
While those who do go to university and
get degrees should be very proud of their
achievement, a professional or vocational
qualification is something to be just as
proud of too.
Just because someone doesn’t go to uni-
versity it does not mean they can’t get a
qualification that is not useful. There are
plenty of non-graduate jobs available at top
companies in a huge range of industries. In
February, for example, accounting giant
PricewaterhouseCoopers (PwC) announced
that it would be looking more and more at
employing non-graduates.
Those who pass ACCA exams don’t just
work in accounting firms either. We’ve got
people working for Next, Motorola, Arsenal
and Wolves football clubs, the Metropolitan
Police and Starbucks.
A school leaver working towards a pro-
fessional or vocational qualification has
several advantages over his or her universi-
ty counterpart. While those studying for
professional or vocational qualifications
will spend three years earning money and
gaining practical experience in a business,
Young people and policy-makers no longer see
those at universities will spend three years
building up debt working on a degree that
getting a university degree as the only option
may bear no relation to the job they get
when they graduate. If they can find a job,
for highly qualified, bright school leavers.
that is.
And just because a qualification isn’t
offered by a university, it does not make the
qualification any less rigorous or respected.
The ACCA exams sat by students in June
were the culmination of a rigorous 18-
month process in which exam paper ques-
tions were drafted and re-drafted to ensure
their credibility and relevance to current
trends and issues. Papers were first drafted
by a team of examiners, before being
reviewed by a panel that includes represen-
tatives of the exam sitters.
ACCA exam papers are constantly
reviewed by technical experts before being
reviewed again by an external examiner,
who ensures that fundamental level papers
(of which there are nine) are equivalent to
the level of a UK honours bachelor degree
and that the professional level papers
(there are five to be taken) are at UK mas-
ters degree level. Even after this stage, the
papers still have to go through test sittings
and another review before they can be
signed off and sat by our students.
COMPETITION GETTING TOUGHER
While applications to universities for
places starting this autumn are at a record
high – the admissions body UCAS received
more than 660,000 applications this year –
interest in and competition for non-uni-
versity career paths are on the increase
too. Earlier this week, it was reported that
24,000 applications had been made for
CITYA.M. 18 AUGUST 2010
These exam-takers
have worked just as
hard as university
students for their
accountancy
qualifications.
Picture: PA
221 apprenticeship positions at BT, while
last week another report noted that appli-
cations for PwC’s school leavers’ entry
scheme had doubled in the past two years.
Tesco, Sainsbury’s, Grant Thornton, and
KPMG are all reporting big jumps in the
interest in their non-graduate schemes
too.
The recession and ever-improving A-Level
grades appear to have led to a bit of a
rethink on alternatives to university
amongst both young people and policy-
makers. While his predecessor didn’t
appear to care so much for non-university
options, the current universities minister,
David Willetts MP, said last week that: “I
think we should get away from the mind-
set that there is only one [post-school]
option, which is at the age of 18 going away
from home to university for three years.”
With British school leavers scoring ever-
better grades, competition for any position
– university or otherwise – post-school is
going to be tough. There is no need to limit
the options though: prestigious university
courses may be an attractive option for the
best and the brightest school leavers, but
they’re not the only prestigious or attrac-
tive option.
Not getting the grades required to meet
a university offer or just not wanting to go
to university aren’t the end of the world
career-wise. There are great alternatives out
there that are gateways to rewarding
careers, whether it’s a career in accountan-
cy or something completely different
A professional qualification isn’t some-
thing that has to be done because of a fail-
ure to get into university; it’s a valid and
credible alternative. Look beyond the red
brick walls of universities and you might
like what you find.
Dorothy Wood is head of education at ACCA UK.
CITYA.M. 18 AUGUST 2010 City Focus | Law 19

City law firms’

moves show a
new prudence in
the Square Mile
Sub-letting and pre-lets are among solicitors’
money-saving tactics, says Jeremy Hazlehurst

T
HE Heron building is probably the
most prestigious new location in
the City, and a few weeks ago a law
firm became the first to rent space
in it. American firm McDermott Will &
Emery will leave its current home – the
rather traditional sounding 7 redundancies they made in the past two
Threadneedle Street – in about a year’s
time and move into the sparkly new sky-
scraper. A sign, you might say, that some
law firms at least have turned the corner
and are willing to splash out on flashy
new premises.
Well maybe. In fact, this is perhaps a
tale of prudence rather than confidence.
The firm has snapped up the space at £50
per square foot, a good £5 less than it is
predicted to be this time next year when it
moves in. And while the firm has not lost
any people during the downturn, it is
downsizing to 25,000 sq ft from 50,000 in
the more efficient new office space,
although office costs will remain more or
less the same.
Elsewhere in the City it’s all about find-
ing new ways of cost-cutting, and some
are going to unusual lengths. “Due to the
impact of the redundancies in 2009 and
pressure on fees, some of the larger UK
firms are thinking about sub-letting,” says
Jeremy Attfield, a partner in the City
office of estate agent King Sturge.
Among those who are looking to rent
space in their offices is Allen & Overy,
which is sub-letting a massive 200,000 of
the 600,000 sq ft in its swish Spitalfields
offices. Eversheds is marketing 28,000 sq
ft, Simmons & Simmons 42,000, SJ Berwin
18,000, and Charles Russell is aiming to
fill 12,000 sq ft.
The reason that this space is going on
the market now is that the firms have now
“re-stacked” their offices following the
years. The leases on offer are up to 10
years, suggesting that the firms do not
expect to go back up to the pre-downturn
staffing levels. It’s a good time to be look-
ing for about 20,000 sq ft of space in the
City in well-equipped offices with the use
of a gym and flash law-firm meeting
rooms – if you don’t mind a big law firm’s
name over the door, anyway.
Value for money is the name of the
game right now. So far this year, law firms
have taken 19 per cent of the City’s office
space, taking advantage of the good 2010
prices – the figure is normally 12-17 per
cent. The biggest recent moves were
Pinsent Masons, taking 165,000 sq ft,
Clyde & Co taking 150,000 and Stephenson
Harwood taking 120,000.
A number are looking at pre-lets for
2014/15, hoping to get bargains before the
market picks up again. The biggest are
CMS Cameron McKenna, which is looking
for 350,000 sq ft, and Field Fisher
Waterhouse, which needs 120,000.
Isn’t this a come-down for the big law A law firm is the first doesn’t mean that you are expecting to fill year, cut your costs and your fees.
firms, who once prided themselves on to take space in the it with keen, bright new associates any Frugality – or the international law
being indestructible and ever upwardly- Heron building. more – it means that you are forking out firm version of it – shows that you are
mobile? Not at all, says Attfield. These for too much space and that the client is moving with the times. And, of course, it
days, the thing is to show that you are Picture: Micha effectively paying for empty space. A good, also helps keep all that profit per partner
savvy enough to cut costs. Empty space Theiner/City A.M. sensible rental can save you a million a motoring along quite nicely.

EU’s Google verdict may not quash complaints

This is a lucrative business for search
engines. Google’s keyword programme,
AdWords, was responsible for 97 per cent
of its $23bn revenues in 2009.
But the use and sale of keywords has
been far from plain sailing. Brand owners
have frequently complained to the search
engines that their brands have been
hijacked by competitors. There has been
SIMON CHAPMAN nothing preventing you buying your com-
LEWIS SILKIN petitor’s name as a keyword, and then put-
ting your ad at the top of the page.
with differing outcomes, which ultimate-
ly led to a number of cases being referred
to the European Court of Justice. The ECJ
gave judgment earlier this year in one
case, Louis Vuitton v Google, which con-
cerned the lawfulness of the sale and use
of keywords, and last month in
Portakabin v Primakabin, which also cov-
ered the use of a keyword by a reseller.
The result is that the sale of keywords
consisting of third party trade marks by
Google was not an infringement.
where appropriate, take down advertise-
ments which are misleading.
Google has been keen to spin these
changes as a good thing for users of its
AdWords programme, saying in the new
policy that “Google’s goal is to provide our
users with the most relevant informa-
tion... and we believe that users benefit
from having more choice”. This change in
policy clearly shows Google taking a back-
ward step from its previous approach,
where its position was that no use of third

F
OR most businesses, it is vital that
prospective customers can find them
on the internet. And the “ranking”
that a business can achieve in search
engine results – how high up it is on a
search page – is a big part of that.
Recognising this, a number of years ago
search engines developed “sponsored
results,” which allowed advertisers to bid
on keywords that the advertiser anticipat-
ed its potential customers would type into
the search engine. So a computer retailer
might bid for its ad to appear at the top of
the page when somebody searches for
“laptops”, for example.
The stand-off between the search
engine companies and the brand owners
was uneasy. While the search engines
were prepared to put in place policies
which prevented advertisers using regis-
tered trade marks, they were not prepared
to prevent advertisers bidding on key-
words, even if they were registered trade
marks. Some brand owners were unhappy
with this. Not only were they losing cus-
tomers, but they were also being drawn
into an expensive bidding war for control
of their own brands in search engine
results.
There were various court actions, often
However, the use of a keyword in conjunc-
tion with misleading advert text could be
an infringement on the part of the adver-
tiser. A refusal by Google to remove an
infringing advertisement could incur lia-
bility for Google.
Google has since announced that it is
changing its AdWord trade mark policy
from 14 September. The new regime will,
in certain circumstances, allow advertis-
ers for the first time in the UK to use third
party trade marks in advertisements that
appear on Google’s search results. They
will also allow trade mark owners to
demand that Google investigate and,
party trade marks as keywords in the
AdWords programme was objectionable.
The result of all this is that in the short
term at least, brand owners may now have
more to complain about. It is up to them
to monitor search engine listings, and
complain to Google where appropriate.
There seems great scope for further dis-
agreement between brand owners and
Google over whether the use of third
party trade marks both as keywords and
in the text of the sponsored result is mis-
leading. It will be interesting to see
whether this leads to more misleading
advertising or less.
 Lifestyle
20 CITYA.M. 18 AUGUST 2010

| Motors WORDS BY
RYAN BORROFF

A very grown up car indeed

With an interior
like a luxury hotel,
it’s hard to relax in
this beautiful but
conservative new
convertible

L
IKE an ageing playboy, this
Lexus has a handsome
face, but is let down
somewhat by its rather
bloated rear end, inflated no
doubt by the installation of its
excellent folding tin top roof.
Maybe an ageing playboy is
the target buyer for the
IS250C.
Not me then. Yet there’s no
doubt that the inside of this 250C,
lined as it was in cream leather and
soft pale carpet, was a pleasant experi-
ence. It may simply be the highest qual-
ity interior I’ve tried in this class of car.
But as a day-to-day set of wheels, it’s no
place for kids or dogs or unwashed
friends. We don’t have a dog, nor do we
ever get round to going for long week-
end rambles in the countryside like we
know we should, but after a week the
inside of the car looked like we’d been
playing football in it. It’s a bit like being
in a posh hotel – it feels fabulous but
maybe Lexus should also provide com-
plimentary slippers – I felt bad just
keeping my shoes on.
In the back it’s cosy, to say the least.
It’s a 2+2 convertible, so you can really
only host an adult in the back if they
sit behind the passenger seat or if the
driver is very short. After finally work-
ing out how to power the seat for-
ward, it took a series of fairly
advanced yogic manoeuvres for my
passenger to fold herself into the
back. Then you wait for what seems
an immeasurably long time for the
seat to power itself back again before
hopping in the car and desperately
grabbing at the seatbelt from its annoy- car’s impressive Adaptive Cruise The boot – lined in lamb-coloured
ingly distant resting place somewhere Control (ACC) system. With cruise con- carpet – offers a surprising amount of
back near the rear screen. trol on, the car will brake itself if you’re space for all the gubbins you’d need for
Still, once you’re finally all shoe- getting too close to the car in front – it a week’s holiday. You could feasibly fit
horned into the car it is quite a cosset- uses a radar system – and if it really a set of golf clubs, two overnight bags,
ing experience. Though if you has to brake it bleeps at you, presum- and even a tent in here, in the event
thought entering the car was slow, ably to wake you up should you have that as the owner of a £40K+ car you’d
driving it is similar. But, as befits the dozed off, or maybe just to remon- not rather spend the night in a haven
interior trim, the driving is refined. strate at how rubbish your driving is. recommended by Mr & Mrs Smith.
It’s a relaxing affair, with no road It’s like having an electronic equiva-
noise to speak of. My advice: stick lent of the braking-distance chevrons
Puccini on the Mark Levinson audio they paint on the motorway. So if THE FACTS:
and take it easy because this is not you’re momentarily distracted LEXUS IS250C
a car that is going to excite you you won’t mindlessly and need-
much in terms of its perform- lessly plough into the back of PRICE: £44,520 (including options)
ance. It’s got a 205bhp V6 2.5 the car in front. In fact, there’s 0-62MPH: 9secs
litre engine that looks exciting quite an array of electronica. TOP SPEED: 130mph
enough on paper, but in reality Front and rear parking sen- CO2 G/KM: 219g/km
it’s a bit slow. sors are helpful as visibility
But then maybe the car isn’t out of the back – or “car TV” MPG COMBINED: 30.4mpg
geared towards people who to your rear-facing infant – is
aren’t, like we were, in a tearing pretty poor. It was also hard to THE VERDICT:
hurry to get to Cornwall for a see out of the windscreen when DESIGN hhhii
weekend of surfing. Perhaps it got chilly, thanks to an over- PERFORMANCE hhiii
they’d rather enjoy the luxury of complicated climate control sys- PRACTICALITY hhiii
taking time for their journey using the tem. VALUE FOR MONEY hhhii

OUT OF OFFICE CAR TALK BY RYAN BORROFF

ZOE STRIMPEL

The facts:
you can afford a Mercedes
The figures: The famous courtyard at 51 Buckingham Gate.
mercedes-benz.co.uk/offers OPERA AND DINNER UNDER THE STARS
Dining outdoors in a frescoed courtyard while
For more information on our tailor-made being entertained with soaring opera is pretty
packages or to book a test drive, visit us online. much a win-win plan for an evening, right? If
you agree, then nab the chance to experience a
night of opera and dinner under the stars at 51
Buckingham Gate, the private Taj residences in
St James’s. A three course dinner (we had a
sensational lamb) is interspersed with songs
and entertainment from the excellent Covent
Garden Strings Company. 20 and 21 Aug. From
£60 at 51 Buckingham Gate, SW1E 6AF,
tel: 020 7769 7766.
VAUXHALL NEW WARRANTY
Vauxhall has announced a new lifetime warranty
on all its new cars, trumping Kia which offered
the best warranty up until now. The Vauxhall
Lifetime Warranty applies to the first owner of
any Vauxhall car and covers powertrain, steering
and brake systems as well as electrical equip-
ment. The warranty lasts throughout the life of
the vehicle up to a limit of 100,000 miles. Now
that’s putting money where your mouth is.
JAGUAR GOES PEARLY
As part of its 75th anniversary celebrations, Jaguar
has designed its XJ75 Platinum Concept, a one-off
Jaguar XJ in pearlescent white and black paint,
chrome and massive 22-inch wheels. The Jag has
lower sills all around, a 1,200-watt Bowers &
Wilkins surround sound system and even a bespoke
clock designed by the Bremont Watch Company.
Power comes from its 5.0-litre Supercharged V8
with 470hp.
CITYA.M. 18 AUGUST 2010 Lifestyle | TV& Games 21

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Penguin Island: BBC
News
8pm Celebrity MasterChef
9pm The Secret Tourist
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Draws
10.45pm FILM Reign of Fire
2001; National Lottery Update
12.20am FILM Taffin: Action
thriller, starring Pierce Brosnan
1988; Weatherview
1.55am Sign Zone: Country Tracks
2.50am Sign Zone: Dragons’ Den
3.50am-6am BBC News
6pm Eggheads: Quiz show,
hosted by Dermot Murnaghan.
6.30pm Restoration Roadshow:
7pm Surviving Haiti: Four
survivors of the January 2010
earthquake tell their stories.
8pm Coast: The team explores
the Caledonian Canal.
9pm CHOICE The Normans:
The Normans’ expansion toward
southern Europe and the
Middle East. Last in the series.
10pm Grumpy Old Men:
10.30pm Newsnight: Weather
11.20pm Stolen Brides:
12.20am Home Movie
Roadshow Uncut
1.20am BBC News 4.40am-6am
Close
6pm London Tonight 6pm The Simpsons 6pm The Boss Is Coming to
6.30pm ITV News 6.30pm Hollyoaks Dinner
7pm Emmerdale 7pm Channel 4 News 6.25pm Don’t Stop Believers
7.30pm Who Cares? Tonight 7.55pm 4thought.tv 6.30pm Live from Studio Five
8pm Emmerdale: 8pm How to Look Good Naked 7pm Five News at 7
8.30pm Coronation Street 9pm The Raoul Moat Tapes: 7.15pm Cricket on Five
9pm Police, Camera, Action! Inside the Mind of a Killer: The 8pm Emergency Bikers: Five
10pm ITV News events that led Raoul Moat to News at 9
10.30pm London News kill. 9pm NCIS
10.35pm UEFA Champions 10pm Big Brother 10pm CHOICE Law & Order:
League: Extra Time 11.10pm School of Comedy Criminal Intent THE NORMANS
11.35pm Celebrity Juice 11.40pm CHOICE My Name Is BBC2, 9PM
10.55pm Don’t Stop Believers
12.15am The Zone; ITV News Earl 11pm K-Ville Professor Robert Bartlett examines the
Headlines 12.10am My Name Is Earl 11.55pm Poker 12.55am Normans’ expansion toward southern
2.15am FILM Psycho: Hitchcock 12.40am Big Brother: Live SuperCasino 4.05am The Boss Is Europe and the Middle East in the 11th
thriller, starring Anthony Perkins 1.40am FILM Long Day’s Journey Coming to Dinner 4.30am Wildlife century.
and Janet Leigh. 1960. 4.10am The into Night 1962. 4.30am Gone SOS 4.55am County Secrets 5.10am
Jeremy Kyle Show 5am-5.30am Fishing 4.45am Boardmasters The New Tomorrow 5.35am-6am
ITV Nightscreen 5.10am-6.05am Beach Volleyball Michaela’s Wild Challenge

SKY SPORTS 1 1.30am Inside the PGA Tour. 2.30am Goal! Special 3am- E4 4.40am Killer Tanks 5.30am-
SATELLITE & CABLE

7pm Total Rugby 7.30pm
European Tour Weekly 8pm
Test Cricket 10pm Boots ‘n’ All
11pm Test Cricket 1am UEFA
Champions League Goals
1.30am FIFA Futbol Mundial
2am Boots ‘n’ All 3am UEFA
Champions League Goals
3.30am FIFA Futbol Mundial
4am You’re on Sky Sports!
5.30am-6am UEFA Champions
League Goals
SKY SPORTS 2
7pm Live UEFA Champions
League 10pm UEFA
Champions League Goals
10.30pm You’re on Sky Sports!
12am Transworld Sport 1am
Total Rugby 1.30am Poker
2.30am-4.30am Test Cricket
SKY SPORTS 3
4pm Live Masters Tennis.
10pm PGA EuroPro Tour Golf
12am Golfing World 1am
European Tour Weekly
Golf update. 2am F3
Euroseries: The fifth round of
the season from the
Nurburgring in Germany. 3am-
3.30am Total Rugby
BRITISH EUROSPORT
6.10pm Live WTA Tennis
9.45pm Wednesday Selection
9.55pm Riders Club 10pm
Ladies European Tour Golf
10.10pm Golf Club 10.15pm
World Match Tour Sailing
10.45pm Yacht Club 10.50pm
Wednesday Selection 11pm-
12.30am Cycling
ESPN
6.45pm Eredivisie Review
Show 7.45pm ESPN Kicks
8pm German Football 8.30pm
ESPN Game of the Week 9pm
ESPN Premier League Kicks
9.15pm Goal! Special 9.45pm
ESPN Kicks 10pm 30 for 30
11pm Major League Baseball
2am Press Pass 2010
5am Live Friday Night Fights
LIVING
7pm Four Weddings 8pm Four
Weddings US 9pm Ghost
Whisperer 10pm CSI: Miami
11pm Criminal Minds 12am
CSI: Crime Scene Investigation
1am Charmed 3am Bulging
Brides 3.50am The Jerry
Springer Show 4.40am Maury
5.30am-6am Home Shopping
BBC THREE
7pm Doctor Who 7.45pm
Doctor Who Confidential 8pm
Don’t Tell the Bride 9pm FILM
Good Will Hunting: Drama,
with Matt Damon and Minnie
Driver. 1997. 11pm Family Guy
11.45pm American Dad!
12.30am Ideal 1am The Klang
Show 1.30am Alice and Her
Six Dads 2.30am Danielle
Lineker – My New Stepfamily
3.30am Ideal 4am-5am Don’t
Tell the Bride
7pm Hollyoaks 7.30pm Friends 6am How Does That Work?
9pm Ugly Betty 10pm FILM
Monster-in-Law 2005. 12am-
DISCOVERY HOME &
6am Big Brother: Live HEALTH
7pm Portland Babies 8pm 10
HISTORY Years Younger 9pm Hospital MY NAME IS EARL
7pm The Crusades: Crescent Sydney 10pm Untold Stories of CHANNEL4, 11.40PM
and the Cross 8pm Mega the ER 11pm The Trauma Team Part two of two. Inside Probe uncovers
Movers 9pm Ax Men 10pm 12am Hospital Sydney 1am the shocking truth about Ernie's
Sliced 11pm Marked 12am Ax Untold Stories of the ER 2am disappearance after the Hickeys are
Men 1am Deep Sea Detectives The Trauma Team 3am 10 found innocent.
2am The Crusades: Crescent Years Younger 4am From Here
and the Cross 3am The Roman to Maternity 5am-6am
Empire in the First Century Bringing Home Baby
4am-5am The Universe
SKY1
DISCOVERY 8pm My Pet Shame 9pm Must
8pm How Do They Do It? Be the Music 11pm FILM
8.30pm How It’s Made 9pm American Pie: Teen comedy
Violent Nation 10pm Manhunt: sequel, starring Jason Biggs. 2
Search for a Killer 11pm Time 2001. 1.05am The Real A&E
Warp 12am Deadliest Catch 1.35am Real Filth Fighters LAW & ORDER: CRIMINAL INTENT
1am Bear Grylls: Born Survivor 2.05am Oops TV 2.30am Road CH FIVE, 10PM
2am More Industrial Wars 3.25am The 4400 A prostitute is murdered in a motel
Revelations Europe 3am 4.20am Top Design 5.10am- room, setting in motion an
Weaponology 3.50am Nasa’s 6am Are You Smarter Than a investigation that leads to a writer
Greatest Missions 10 Year Old? secretly profiling the singles scene.

COFFEE BREAK
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 Sport
22 CITYA.M. 18 AUGUST 2010

Selectors are right

to give Cook time
selectors have done the right thing in
backing him and giving him time to play
his way out of this rut. That said, if
Cook’s form is not rectified by the time
Ian Bell comes back from injury then
England do have a big decision to make
ahead of the Ashes series this winter.
Cook is not the first, and certainly ENGLAND V PAKISTAN
AT THE CREASE WITH won’t be the last, batsman to have gone
1st Test (Trent Bridge) – Eng won by 354 runs
through a period like this – yet he is only
ANDY LLOYD one innings away from rediscovering his 2nd Test (Edgbaston) – Eng won by 9 wkts
3rd Test (The Oval) – August 18-22
form. He may not even need a century at

A
LASTAIR COOK is clearly lacking The Oval in this third Test with Pakistan, 4th Test (Lord’s) – August 26-30
in confidence at the moment but it may be that a 60 or 70 could help lift
the England selectors are right to his self-belief and put him back in the Swann rejoined England training yesterday after his court case was adjourned. Picture: ACTION IMAGES
keep faith with him. right frame of mind for the Ashes.

Strict Strauss lays

He is struggling to make his mind up
which deliveries to play and which to
leave, and the ones he is playing he is
doing so with hesitancy.
But upsetting the applecart now, with
no natural replacement ready to step in,
The Oval is renouned as a good bat-
ting track, so this is a good opportunity
for Cook to make his mark.
England are in a very good place right
now and if they can win the toss and put
450 on the board, then it will look very

down law to troops

would not help the situation and the grim indeed for the tourists.

| PROMOTION

WIN
▲

CRICKET under floorboards. you do on or off the pitch, people

A BOX FOR BY JON COUCH

CAPTAIN Andrew Strauss has
The case was adjourned until 7
October, allowing Swann to team
up with the squad for training yes-
will be taking note of it in a way it
will reflect on the England cricket
team. We don’t want incidents

15 AT ARSENAL warned his England troops of their

off-the-field responsibilities after
coming close to losing Graeme
Swann for today’s third Test with
WE HAVE teamed up with Arsenal to offer Pakistan at The Oval.
one lucky reader and 14 friends the chance to EXPERIENCE BOX-TO- Spinner Swann missed Monday’s
terday.
Strauss insists the case hasn’t
hindered preparations for the third
Test, but was quick to warn his
team-mates to watch their step
when in the public eye.
where people are in the news for
the wrong reasons.”
Strauss has also laughed off sug-
gestions from his Australian coun-
terpart Ricky Ponting that it was
“absolutely possible” for England to

sample the Executive Box experience for BOX EXCELLENCE practice session after appearing in
a Nottingham court to answer a
“He’s fine,” Strauss said of the
Notts spinner. “Obviously the court
suffer a 5-0 whitewash in the Ashes
series this winter.
Arsenal v Blackpool this Saturday 21 August drink-driving charge. case has been adjourned and he’s “This is the start of silly season I
Ajaz Ahmed is in his third Swann told the court he had got his mind on the game. He’s still suppose, people coming out with
2010. season as an Executive Box returned from birthday celebra- managed to drive himself down predictions,” he said. “Predictions
Arsenal’s Emirates Stadium offers a world- holder at Emirates Stadium tions and was driving to his local here so things are okay. ultimately mean nothing, it’s how
class matchday experience to all supporters. and here he tells why: Asda supermarket to buy screw- “We often say you’re an England you play on the pitch so I think we’ll
drivers to rescue his pet cat from cricketer 24 hours a day. Anything just keep it nice and simple.”
But for an exclusive number of fans there is
the opportunity to go one better with an “We use our box at Arsenal to
say thank you to staff and to
Executive Box, and for a small period of time
there are an extremely limited number still
catch-up with clients in a more
informal setting. We have clients
and employees from all over the
Anelka’s international career Mourinho gets
available to purchase for the season ahead.
Emirates Stadium holds a range of 10, 12
and 15-seat boxes and each comes complete
world and it’s a wonderful privi-
lege to share some of the best
football in the world at a venue
in tatters with 18-match ban his man as Ozil
with private parking, an LCD TV screen and a
personal account contact on hand to ensure
which stands head and shoulders
above the others. The ban effectively ends 31-year- joins for £12m
▲

EUROPEAN FOOTBALL
the holders’ every need is catered for. Plus, you “It says a lot when even our old Anelka’s international career.
guests who support rival teams NICOLAS ANELKA was last night hit Manchester United defender
can also upgrade your experience with first with an 18-match international sus- Patrice Evra was also handed a five-
▲

leave with a huge respect for the EUROPEAN FOOTBALL

class dining, a fully-stocked fridge containing vision that Arsenal has and the pension by the French Football
all your favourite drinks, and personally investment the Club has made in its Federation for his involvement in
facilities and hospitality.” France’s World Cup debacle.
selected furniture to customise your box. Les Bleus’ campaign descended
into farce after Chelsea striker
Anelka was sent home following an
To be in with the chance of winning, simply answer the following question: altercation with coach Raymond
Domenech, prompting the rest of
WHAT YEAR DID ARSENAL MOVE TO EMIRATES STADIUM? the squad to go on strike.
A 2006 B 2007 IN THE DOCK | FOOTBALL’S LONGEST BANS
Willie Woodburn (Rangers, 1954) –
Please send your entry and contact number to win@cityam.com Banned for life after being sent off
three times for retaliation.
Alternately, to find out more information on how you can own an Executive Box at English football - Banned from play-
Emirates Stadium please call 0845 262 0001 or visit www.arsenal.com/boxes ing in Europe for five years following
the Heysel Stadium disaster in 1985.
Terms & Conditions: The prize is a executive box for 15 of on 21st August 2010 for Arsenal vs. Blackpool at the Emirates Stadium.
Tickets are not for resale and no cash alternative offered. The promoter is Arsenal Football Club and the promoter reserves the right to Mark Bosnich (Chelsea, 2002) –
change the prize to one of equivalent or greater value without notice. Entry in to the promotion is free and no purchase is necessary, Received a nine-month ban for failing a
entrants must be aged 18 and over. Travel expenses and accommodation are not included. The closing date is 18th August 2010 at
11:59pm. The winner will be drawn at random from all the correct entries and will be notified on 19th August 2010. By entering the pro- drugs test for cocaine.
motion you agree to receive further information and similar promotions from City A.M. If you wish not to receive any further information Paddy Kenny (Sheff Utd, 2008) _
please add ‘No’ after your answer. The winners, by accepting the prize, agree to publicity if required. The Editor’s decision is final.
Also banned for nine months for test-
month ban, Franck Ribery a three-
match ban and Jeremy Toulalan
was banned for one game. Eric
Abidal and the rest of the 23-man
squad escaped further punishment.
France finished bottom of their
World Cup group with one point
and one goal from their three
matches.
ing positive for Ephedrine.
Eric Cantona (Man Utd, 1995) –
Banned for eight months and fined
£10,000 for a kung-fu kick on Crystal
Palace fan Matthew Simmonds.
Rio Ferdinand (Man Utd, 2003) –
Banned for eight months for missing a
routine drugs test.
Adrian Mutu (Chelsea, 2004) –
Received a seven-month ban for failing
a drugs test for cocaine.
JOSE MOURINHO yesterday added
to his star-studded list of Galacticos
at Real Madrid by completing the
signing of German World Cup star
Mesut Ozil.
The 21-year-old is to undergo a
medical at the Bernabeu today after
agreeing to move from Werder
Bremen for a €15m (£12.6m) fee.
Ozil, also a target for Manchester
United, established himself as one
of Europe’s hottest properties fol-
lowing a string of impressive per-
formances in the World Cup.
He now becomes Mourinho’s
sixth major signing of the summer,
joining Germany team-mate Sami
Khedira, ex-Chelsea defender
Ricardo Carvalho, Spanish pair
Pedro Leon and Sergio Canales and
Argentina’s Angel di Maria.
Bremen’s director of sport, Klaus
Allofs, said: “We respect that Mesut
wants to go and take the next step
in his career.”
CITYA.M. 18 AUGUST 2010
Redknapp’s men struggle to
keep pace with Young Boys
YOUNG BOYS 3 But Sebastien Bassong began the
TOTTENHAM 2 Pavlyuchenko rifled a second with
▲
CHAMPIONS LEAGUE PLAY-OFF
BY FRANK DALLERES
TOTTENHAM manager Harry
Redknapp gleefully embraced a
“great defeat” after his side surged
back into contention following the
most cataclysmic of starts in Bern.
Spurs’ hopes of progressing to the
Champions League group stage – and
pocketing a £20m windfall – looked
extinct after Young Boys raced into a
Mancini finally signs Milner
and defends ‘rebel’ Balotelli
▲
PREMIER LEAGUE
BY FRANK DALLERES
MANCHESTER City manager Roberto
Mancini insists Mario Balotelli does
not deserve his notoriety and has
backed the Italian prodigy to take
England by storm.
Mancini introduced Balotelli to the
press yesterday, after finally landing
Aston Villa’s James Milner and letting
Craig Bellamy join Cardiff on loan.
Balotelli, 20, was quick to dismiss
the reputation he earned as a trouble-
maker at former club Inter Milan, say-
ing: “I am not a bad boy. I am just a
normal guy.”
And Mancini is confident the £25m
striker will grab headlines for his
goalscoring exploits rather than the
3-0 lead inside 28 minutes.
comeback with a bullet header just
before half-time, and Roman
seven minutes remaining.
It means Tottenham will go into
next Wednesday’s second leg at
White Hart Lane as favourites to
progress to the Champions League
proper for the very first time.
“That was a great defeat in the end,
if there is such a thing as a great
defeat,” said Redknapp, who admit-
ted his side struggled on the artificial
pitch at the Stade de Suisse.
“At 3-0 we were out of it. They got
after us, we didn’t look happy on the
surface, we couldn’t get hold of the
off-field rows that marred his
time in Italy.
“All of us are said to be bad
boys when we are young. But I
have worked with Mario
before and he is a normal
person,” said Mancini, who
coached Balotelli at Inter.
“He is young player,
only 20 years old, who
can do a lot in the
Premier League.
“He has all the qualities
needed to become a fan-
tastic player.”
Balotelli could make
his debut tomorrow
night when City travel to
FC Timisoara for the first leg
of a Europa League qualifier.
ball, it kept bouncing away from us
and we didn’t look confident in our
play and we were in desperate trouble.
“Full credit to the lads. We come
back to 3-1 and then a great goal from
Pav to put us right back in the tie, and
the tie is evenly balanced now. We
need to win at home and it gives us a
great chance.”
Spurs also lost Jermain Defoe to a
groin injury but the evening might
have been worse still. Young Boys had
chances to add to their tally and
almost scored a fourth just seconds
before Pavlyuchenko’s strike, substi-
tute Christian Schneuwly firing nar-
rowly over.
Tottenham’s pre-match excitement
at returning to Europe’s top club
England midfielder Milner
(left), meanwhile, spent yesterday
finalising his protracted move,
after a fee was finally agreed
and a pay-off negotiated
with Steven Ireland.
Villa will receive at least
£18m plus add-ons, with
midfielder Ireland mov-
ing to the Midlands in
part-exchange.
Also departing
Eastlands is Bellamy, who
called dropping down a
division to join Cardiff, his
hometown club, “the hard-
est decision in my career”.
Shay Given could be next,
after Mancini hinted he may
let the goalkeeper leave.
Sport | Football
Pavlyuchenko’s
83rd-minute goal
put Spurs firmly
back in the tie.
Picture:
ACTION IMAGES
competition after half a century was
punctured within two minutes when
Senad Lulic capitalised on a lucky ric-
ochet to strike a low shot across and
beyond Heurelho Gomes.
The visitors’ night got worse just 11
minutes later when Henri Bienvenu
left Michael Dawson for dead and
slotted the second. By the time Xavier
Hochstrasser scampered onto a fine
through-ball and despatched a third,
Redknapp was turning puce.
But Spurs snatched hope when
Bassong met Gareth Bale’s outswing-
ing corner with gusto. And, after
chances at both ends, Pavlyuchenko
thrust them firmly back into the tie
with a rapier finish that beat Warco
Wolfli at his near post.
Ferguson blasts rivals for
kamikaze spending sprees
▲
PREMIER LEAGUE
BY FRANK DALLERES
MANCHESTER United boss Sir Alex
Ferguson has launched a thinly-veiled
attack on Manchester City by accus-
ing some Premier League clubs of
“kamikaze” spending.
Ferguson did not mention the
Sheikh Mansour-backed Eastlands
outfit by name as he railed against
mega-rich owners splashing their mil-
lions with little restraint.
But it is widely believed he was
referring to his local rivals, who yes-
terday took their summer spending
to £125m by signing England mid-
fielder James Milner.
“Over the last two or three years we
have seen very wealthy owners
become part of football clubs and
therefore go on this kamikaze effort
23
Results
CRICKET
LV COUNTY CHAMPIONSHIP—Division One: Durham v
Yorkshire (Emirates Durham ICG): Durham 213 (M J Di
Venuto 117no, P Mustard 53, A Shahzad 5-51) and 207-6
(60.0 overs) (M D Stoneman 78). v Yorkshire 255 (A
McGrath 124no). Nottinghamshire v Warwickshire (Trent
Bridge): Nottinghamshire 328 (A D Brown 76, M A Wagh
54) v Warwickshire 121 (A R Adams 4-14) and 152 (V
Chopra 54, R J Sidebottom 5-35). Nottinghamshire (22pts)
beat Warwickshire (3pts) by an innings and 55 runs.
LV COUNTY CHAMPIONSHIP—Division Two: Glamorgan v
Middlesex (The SWALEC Stadium); Glamorgan 198(P T
Collins 4-55) and 156-8 (46.0 overs) v Middlesex 181 (S A
Newman 99). Gloucestershire v Northamptonshire
(Northampton): Gloucestershire 302 (W T S Porterfield 150,
C D J Dent 92, L M Daggett 4-57) v Northamptonshire 124
and 128-7 (42.0 overs), G M Hussain 4-20). Worcestershire
v Surrey (New Road): Worcestershire 308 (J G Cameron 95,
D A Wheeldon 65, C T Tremlett 4-45) and 13-0 (7.0 overs) v
Surrey 259 (T J Lancefield 74, S M Davies 68).
SECOND ONE DAY INTERNATIONAL: Afghanistan v
Scotland (Ayr): Afghanistan 120 (J H Davey 5-9) v Scotland
121-4 (D F Watts 55no). Scotland beat Afghanistan by 6
wickets.
CYCLING
UCI ENECO TOUR (Steenwijk, 5.2km)—PPrologue: 1 Svein
Tuft (Can) Garmin - Transitions 6mins 19secs, 2 Jos Van
Emden (Ned) Rabobank at 0.05, 3 Lars Boom (Ned)
Rabobank at 0.06, 4 Maarten Tjallingii (Ned) Rabobank at
0.06, 5 Edvald Boasson Hagen (Nor) Sky Professional
Cycling Team at 0.07, 6 Geraint Thomas (Gbr) Sky
Professional Cycling Team at 0.07.
FOOTBALL
UEFA CHAMPIONS LEAGUE PLAY-OFF
FIRST LEG
Dynamo Kiev..............(0) 1 Ajax........................................(0) 1
Gusev 66 Vertonghen 54
Att: 16,000
Rosenborg ....................(1) 2 FC Copenhagen..............(0) 1
Iversen 23 Gronkjaer 84
Henriksen 57 Att: 18,800
Sparta Prague..........(0) 0 MSK Zilina.........................(0) 2
Ceesay 51
Att: 19,000 Oravec 73
Young Boys..................(3) 3 Tottenham .........................(1) 2
Lulic 4 Bassong 42
Bienvenu 13 Pavlyuchenko 83
Hochstrasser 28 Att: 31,275
Zenit St Petersburg .(1) 1 Auxerre...............................(0) 0
Kerzhakov 3 Att: 20,000
TENNIS
ATP WESTERN & SOUTHERN FINANCIAL GROUP
MASTERS (Cincinnati, Ohio)—11st rnd: Alejandro Falla (Col)
bt (16) Gael Monfils (Fra) 6-3 6-4, Denis Istomin (Uzb) bt
James Blake (USA) 6-3 6-0, Richard Gasquet (Fra) bt (12)
Mikhail Youzhny (Rus) 2-6 6-4 6-1, Mardy Fish (USA) bt
Gilles Simon (Fra) 7-6 (7-4) 7-5, Julien Benneteau (Fra) bt
Michael Llodra (Fra) 3-6 6-3 6-2, Ernests Gulbis (Lat) bt
Donald Young (USA) 7-6 (7-5) 6-4. 2nd rnd: (7) Tomas
Berdych (Cze) bt Paul-Henri Mathieu (Fra) 6-4 6-4, Marcos
Baghdatis (Cyp) bt Thomaz Bellucci (Bra) 6-2 4-6 7-6 (7-4).
WTA ROGERS CUP (Montreal, Canada)—11st rnd: (10)
Victoria Azarenka (Blr) bt Kateryna Bondarenko (Ukr) 6-1 6-
1, Bethanie Mattek-Sands (USA) bt Melanie Oudin (USA) 6-1
6-4, Ekaterina Makarova (Rus) bt Lucie Hradecka (Cze) 6-0
6-4, Kimiko Date Krumm (Jpn) bt Monica Niculescu (Rom) 7-
6 (7-4) 4-6 6-2, Alisa Kleybanova (Rus) bt Heidi El Tabakh
(Can) 6-1 6-2, Agnes Szavay (Hun) bt Gisela Dulko (Arg) 6-4
4-6 7-6 (7-3), (15) Flavia Pennetta (Ita) bt Daniela
Hantuchova (Svk) 6-0 7-5, Jie Zheng (Chn) bt Katarina
Srebotnik (Slo) 6-3 6-2, (17) Marion Bartoli (Fra) bt Valerie
Tetreault (Can) 6-1 6-0, (18) Nadia Petrova (Rus) bt Lucie
Safarova (Cze) 7-5 4-6 6-3, Maria Kirilenko (Rus) bt
Dominika Cibulkova (Svk) 6-0 6-3
SPORTS EDITOR JON COUCH
email sport@cityam.com
to spend their money,” said Ferguson.
“It is amazing the amounts of
money that are being bandied about
in the present day game. I don’t see it
abating. The kind of spending we are
seeing at the moment will be here for
two or three years, until such time as
they understand you can’t necessarily
achieve all the time by spending.”
Ironically, Ferguson made his
remarks about reckless spending at a
media conference to present Bebe, a
player he admits he signed without
ever seeing him play, live or on video.
“On this occasion I didn’t watch
him,” he said of the Portuguese strik-
er, a £7m arrival from Vitoria
Guimaraes. “It’s the first time I’ve
done it. Normally I see plenty of video
footage but our scouting department
is very good and sometimes you have
to go on instinct.”