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Issue 1,216 Thursday 9 September 2010
BUSINESS WITH PERSONALITY FREE
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BARCLAYS DISMISSES
BANK BREAK-UP THREAT
REGULATION many say would force some of the
▲

BY VICTORIA BATES most successful banks, such as

BARCLAYS executives have privately
dismissed the idea that UK banks will
be forced to break up their retail and
investment banking operations, even
though the government’s independ-
ent banking commission still has a
year left to deliberate its options.
Those close to the bank said yester-
day that Barclays would not have
appointed its investment banking
chief Bob Diamond to head the group
if the board were not confident that
the commission will “stop short of
recommending a full break-up”.
“The more people think about it,
the more problematic it is,” said one
source. “It doesn’t make sense to send
a wrecking ball to smash into one of
the only businesses the UK has which
are competitive on a global scale.”
The commission, chaired by former
Office of Fair Trading boss Sir John
Vickers, was appointed by chancellor
George Osborne after the general
election to investigate the best “size,
scale and function” of banks in the
future.
Concerns among the banks has
focused primarily on the possibility
that the commission will bring in a
British version of the now-defunct
Glass Steagall Act, separating their
retail and investment arms – a move
Barclays and HSBC, to seriously con-
sider moving their headquarters over-
seas.
Yesterday, business secretary Vince
Cable appeared to tone down his
insistence on a full break-up of the
banks, saying only that the appoint-
ment of Diamond to replace John
Varley as Barclays chief executive
made it imperative that the commis-
sion carefully consider its “options”.
The Banking Act of last year has
already forced the UK’s banks to
ringfence retail deposits from future
failures, addressing a key argument
against having retail and investment
operations under one roof.
Another alternative to a full break-
up would be to introduce the sub-
sidiarisation of banks’ riskiest assets,
parking them in separate companies
which are capitalised separately from
the group as a whole.
However, the confidence of
Barclays, chaired by former invest- Out with the old . . . John
ment banker Marcus Agius, in a con- Varley (l) will hand over
clusion in favour of the universal to incoming chief execu-
banking model may needle members tive Bob Diamond next
of the commission who feel that the year
investigatory process has yet to get
fully underway. on the commission by Martin Taylor, Morgan’s former co-head of invest- hired former CIT Group chairman and
Vickers has until next September to himself a former chief executive of ment banking Bill Winters; and FT chief executive Jeffrey Peek as vice chair-
produce a final report to the govern- Barclays; Claire Spottiswoode, the ex- columnist Martin Wolf. man of its investment-banking division
ment on his findings. He is supported head of gas regulator Ofgas; JP Meanwhile, Barclays Capital yesterday following Diamond’s promotion.

BP GULF SPILL REPORT TRIGGERS NEW ROW

sequence of failures involving a num- The ventilation system on the BP- design contributed to the incident”, decisions that increased risk – in
▲

ENERGY
BY MARION DAKERS
BP admitted it made several mistakes
that led to the Gulf of Mexico oil spill
yesterday, but tried to deflect some
blame to rig operator Transocean and
contractor Halliburton in the first
detailed report into the cause of the
disaster.
BP claimed in the report that “a
ber of different parties” led to the
explosion that killed 11 workers and
caused 4.9m gallons of oil to leak into
the Gulf and has cost $8bn (£5.2bn) to
clean up so far.
The oil giant conceded that man-
agers at the Deepwater Horizon rig
failed to spot unusual pressure levels
and leaks in the oil pipe 40 minutes
before the blowout.
designed rig probably helped the fuel
reach the engine room and ignite,
said Mark Bly, BP head of safety and
author of the report. However, he
added that Transocean workers also
missed the warning signs, and that
Halliburton’s cement work failed to
properly contain the oil. Outgoing
chief executive Tony Hayward said “it
would appear unlikely that the well
but other companies involved in the
Macondo well dispute this finding.
Transocean slammed the 193-page
dossier, calling it a “self-serving
report that attempts to conceal the
critical factor that set the stage for
the Macondo incident: BP’s fatally
flawed well design.
“In both its design and construc-
tion, BP made a series of cost-saving
some cases, severely.”
Halliburton also hit back, claiming
it has “noticed a number of substan-
tial omissions and inaccuracies” in
the report, and that it had carried out
work to BP specifications.
All three firms could face colossal
legal bills from those affected by the
spill if found to be responsible.
TOP FINDINGS, ALLISTER HEATH: P2

FTSE 100 ▲ 5,429.74 +21.92 DOW ▲ 10,387.01 +46.32 NASDAQ ▲ 2,228.87 +19.98 £/$ ▲ 1.55 +0.01 £/¤ ▲ 1.22 +0.01 ¤/$ 1.27 unc Certified Distribution
05/07/2010 till 01/08/10 is 94,889
 2 News
A rare good news story about UK Plc
EDITOR’S LETTER
ALLISTER HEATH
FOR a country supposedly poised for a
double-dip recession, we are doing sur-
prisingly well. Take the factory figures
released yesterday: manufacturing
output rose strongly in July and is now
up by 4.9 per cent over the past year,
the fastest growth since 1994.
The recovery in manufacturing is
mainly reflecting higher demand for
capital goods rather than consumer
goods or intermediate goods, suggest-
ing that the consumer slowdown is
going hand in hand with a return of
business investment. It also confirms
that the UK is successfully moving its
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WHAT THE OTHER PAPERS SAY THIS MORNING
PROPOSAL FOR GRADUATE HIGH-
FLIERS TO PAY EDUCATION PREMIUM
Government officials are considering
a plan to make graduates who
become big earners pay a premium
for their education as the coalition
seeks ways to find extra money for
universities. The novel policy propos-
al reflects a desire by Conservative
coalition members to appease Liberal
Democrat MPs, most of whom are
opposed to higher tuition fees and to
ramping up student loan interest
rates.
TESCO EXPERIMENTS WITH CLUBCARD
Tesco has been experimenting with
further beefing up its Clubcard loyal-
ty scheme as it fights to boost sales
growth in its home market. Britain’s
biggest retailer has issued high-spend-
ing Clubcard holders with a coupon
to earn triple points on their shop-
ping. The move follows a scheme to
much-reduced manufacturing base
towards high value added capital
goods and away from regular con-
sumer goods, which are cheaper to
make in China.
Production of capital goods rose 8.7
per cent year on year during the past
three months, while that of consumer
durables was flat. Recent growth rates
for capital goods output are the high-
est since data began in 1995, an analy-
sis from Citigroup reveals. Investment
spending collapsed during the crisis,
as firms slashed outlays to boost liq-
uidity and repay debts. With capex
picking up globally, the weaker pound
is helping UK exporters.
That is why I would urge the Bank
of England to push through a symbol-
ic, quarter point hike in interest rates:
this would send a strong signal that
the economy is normalising, that the
Bank is serious about fighting infla-
tion and that it realises ultra-loose
money cannot go on for ever.
Before I am inundated by emails
from people dismissing me as a crazed
AT A GLANCE | BP’S COUNTDOWN TO THE GULF OIL SPILL
● Weak cement work
The day before the accident, cement was
pumped down a pipe in the well, which
squeezed back up the space between the
pipe and the rock layers, known as the
annulus. That "light, nitrified foam
cement slurry" failed to block oil and gas
from moving up into the annulus. Cement
design, testing, quality assurance and risk
assessment was weak.
● Barriers failed
Once oil and gas got into the annulus,
"shoe track barriers" failed to prevent
hydrocarbons from entering the pipe. A
shoe track is a barrier designed to block
hydrocarbons from entering the bottom
of the pipe.
● Pressure tests misread
A negative pressure test performed on
the day of the explosion was misinter-
preted as successful by BP well site lead-
ers and the Transocean rig crew.
Pressure readings really indicated that
hydrocarbons were flowing into the well
from the reservoir, but were interpreted
as showing that oil and gas were blocked
by barriers provided by the cement, shoe
track, casing and a casing seal.
● Delay in detection
The breach of oil and gas into the well
wasn’t detected until they had reached
let customers double the value of
Clubcard vouchers in certain product
areas.
VW SET TO RETAIN CHIEF IN RACE TO
OVERTAKE TOYOTA
Volkswagen is set to renew its chief
executive’s contract beyond next year,
highlighting how Martin Winterkorn
has become a linchpin in the German
carmaker’s quest to overtake Japanese
rival Toyota by 2018. The firm plans to
extend Mr Winterkorn’s five-year con-
tract by another three years either at
a supervisory board meeting in
November or in February at the latest.
FOSTER’S WINE REJECTS BUY-OUT
OFFER
Foster’s has rejected a A$2.7bn
(US$2.5bn) offer for its wine assets
from a buy-out group, in a move ana-
lysts said would spur fresh takeover
interest in the Australian company’s
highly prized beer business. The
indicative proposal “significantly”
undervalued the firm, Foster’s said.
optimist, let me point out that I’m no
such thing. Growth will be weak this
year and next; the UK’s ability to
expand sustainably has been hugely
reduced. We are in for years of
mediocre, often hesitant growth; and
the coming months won’t be as good
as the first couple of quarters. But that
doesn’t mean we should ignore what-
ever positive news we do get.
BP’S WOES (CONT.)
Some companies cannot win. At the
start of BP’s crisis, the firm was criti-
cised for failing to admit that the spill
was entirely its fault. Then when the
media realised that the situation was
far more complex, and that Barack
Obama was deliberately downplaying
the role of US contractors, the media
slammed BP for not defending itself
more competently. And now that the
beleaguered oil firm has finally pub-
lished its take on what really hap-
pened, it is being attacked for trying
to shift the blame. The real problem is
that while the report actually makes
the riser, a pipe that connected the well
to the rig.
● Failure to regain control
Efforts to bring the well under control
failed. Crews first tried to close a
blowout preventer at the seabed and a
diverter, but oil and gas shot up the riser.
Hydrocarbons went to an onboard sys-
tem that separated drilling mud from
natural gas rather than to an overboard
diverter line that would have sent them
into the sea.
● Separator overwhelmed
Fast incoming oil and gas overwhelmed
the mud gas separator, allowing gas to
be vented onto the rig.
● Air con propelled the gas
The Horizon's heating, ventilation and air
conditioning system likely moved the gas
to engine rooms where ignition risk was
high.
● Blowout preventer failed
The blowout preventer failed to seal the
well. The report said the explosions and
fire on the rig likely disabled mechanisms
that allowed rig crews to seal the well
and disconnect the riser. In addition, con-
trol pods on the blowout preventer were
faulty, and underwater robots failed to
manually activate valves in it as oil
spewed into the ocean after the disaster.
ASTRA BOSS’S PENSION ANGERS
STRIKERS
The chief executive of AstraZeneca
was at the centre of a pensions storm
as staff striking over the loss of retire-
ment rights learnt that their boss has
the third-best pension deal among
top executives of British companies.
The TUC’s annual PensionsWatch sur-
vey found that David Brennan, 57,
AstraZeneca’s chief executive, has
accrued a £12.8m pension pot.
GOOGLE UNVEILS FASTER SEARCH
FACILITY
Google has unveiled a new faster way
to deliver search results for users, fur-
ther cementing its online search
dominance. A new “Instant Search”
feature begins to predict and display
relevant results as soon as users start
to type in their requests. The search
results displayed on the page refresh
and change as the user continues.
interesting reading (see summary
below), it is unlikely to convince US
lawyers and legislators still baying for
the firm’s blood. Shareholders should
brace for more turbulence ahead.
OBAMA’S NON-STIMULUS
Another month, another stimulus
plan from Barack Obama, whose
Democratic party is trailing disas-
trously in the opinion polls ahead of
November’s mid-term elections. The
wheeze won’t work: America has
many problems, but insufficient gov-
ernment spending isn’t one of them.
Whenever I speak to US executives, I
am struck by a much more important
issue: they feel they are up against the
most anti-business administration
since Jimmy Carter’s appalling presi-
dency. They worry that they could be
hit at any time with higher taxes, new
regulations and – in some cases – even
outright nationalisation. No wonder
US firms are holding back on invest-
ing or creating jobs.
allister.heath@cityam.com
Ian Cameron passed away after suffering a stroke during a holiday
PM’s father dies in France
POLITICS
▲
BY HARRY BANKS
PRIME Minister David Cameron’s
father has died after falling ill during
a holiday in southern France.
Conservative leader Cameron had
flown to his 77-year-old father Ian’s
hospital bedside earlier after the for-
mer stockbroker suffered a stroke
and heart problems.
The Prime Minister, who rushed to
Toulon after being alerted by his
mother, will remain in France
MILLIONS OF HOUSEHOLDS HAVE NO
BREADWINNER
Almost four million UK households
have no adults in work after a huge
increase over the past year, official fig-
ures show. The Government said the
fact that no one worked in almost one
out of five households was a “shock-
ing reflection” of the scale of the
problem it had inherited. A report by
the Office for National Statistics also
showed that 1.9m children lived in
workless households.
ARM JUMPS ON TALK IT IS SAMSUNG'S
FAVOURITE
ARM Holdings surged to the top of the
blue-chip leaderboard amid gossip its
graphics chip will be used by
Samsung for its new processor. Earlier
this week Samsung unveiled the new
processor for smartphones, tablets
and netbooks, which is codenamed
Orion.
CITYA.M. 9 SEPTEMBER 2010
US Beige Book
shows growth
rate is slowing
▲
US ECONOMY
THE US Federal Reserve released its
snapshot of the economy yesterday,
which showed “widespread signs” of
slowing in recent weeks.
The Fed said in its Beige Book sur-
vey of businesses that three of the 12
districts questioned said economic
growth was mixed or slow.
Seven districts away from the east
cost reported modest growth between
mid-July and the end of August, com-
pared with ten in the last report.
The Fed said consumer spending
appeared to increase even as shoppers
were limiting themselves to essential
items, a further sign the economy
may escape a relapse.
Upward price pressures remained
quite limited for most categories of
goods and services, and wage pres-
sures were subdued, the Fed said.
Picture: PA
overnight with his mother and other
close members of the family.
Cameron, who took office in May,
said his father had been an inspira-
tion to him.
Ian Cameron overcame the handi-
cap of being born with both legs
deformed and went on to prosper,
sending the future Prime Minister to
Eton, an elite fee-paying school.
The Prime Minister had only just
returned to work after taking time
off following the birth of daughter
Florence two weeks ago.
SWISSCOM TO BID FOR REST OF
FASTWEB SHARE
Swisscom said yesterday it will offer
€256 million to acquire the outstand-
ing shares in its Italian Fastweb busi-
ness. The Swiss telecommunications
company now indirectly owns 82.1
per cent of Fastweb shares, bought in
May 2007, and is seeking to acquire
the remaining 17.9 per cent of the
stock for €18 per share.
INDIA LAW THREATENS US ENERGY
DEALS
The US government is scrambling to
preserve the benefits of a civil nuclear
agreement with India – the corner-
stone of a broad new relationship
between the world’s two largest
democracies – after India passed a
law that threatens to effectively
exclude US companies from its mar-
ket for nuclear power. The Indian law
was paased last week.
CITYA.M. 9 SEPTEMBER 2010
FSA set to hit
Goldman with
a £20m fine
▲
BANKING
BY KATIE HOPE
WALL Street titan Goldman Sachs has
been fined £20m by the Financial
Services Authority (FSA) for failing to
disclose it was under a fraud investi-
gation by its US counterpart.
The fine, expected to be announced
this morning, concludes a five-month
long probe by the City watchdog
launched after the US Securities and
Exchange Commission (SEC) charged
Goldman with civil fraud for allegedy
misleading investors about its mort-
gage-backed security known as Abacus.
The FSA is understood to have been
particularly annoyed because the
Goldman employee at the centre of
the charges, Fabrice Tourre, who
denies wrongdoing, had been trans-
ferred to a job in London from the US
while the probe was ongoing, putting
him under the auspices of the UK reg-
ulator.
The FSA’s move, which comes just
two months after Goldman paid
$500m to settle the SEC charges, is a
fresh blow to the bank, which has seen
its share price plummet by almost a
fifth since the suit was initially
announced. While the size of the fine
is relatively insignificant, it will
reignite controversy over the bank’s
actions during the financial crisis.
The FSA announced its investiga-
tion in April following pressure from
then-Prime Minister Gordon Brown,
who expressed shock at what he
called Goldman’s “moral bankrupt-
cy” for planning multibillion-dollar
bonuses for its staff.
The fine from the FSA is the latest
in a string of large levies imposed by
the City regulator. The biggest was
£33m levied against JP Morgan last
year after the bank failed to separate
client money from its own. Last
month, the London branch of Societe
Generale was fined £1.57m for failing
to provide accurate transaction
reports. Goldman and the FSA
declined to comment last night.
DINGEMANS LEAVES GOLDMAN: P5
Star US fund manager John Paulson saw his flagship fund fall last month Picture: GETTY
Hedge funds lost out in
August after stocks fell
HEDGE FUNDS
▲
BY HARRY BANKS
MOST hedge funds lost money in
August as some of the industry’s best-
known names were caught out by
dips in the stock market.
The average fund lost 0.55 per cent
last month after gaining 1.9 per cent
in July, according to data released yes-
terday by New York consulting firm
Hennessee Group.
Hedge funds lost 1.29 per cent in
June and fell 3.21 per cent in May,
reported Hennessee, one of a handful
of groups that track performance and
asset flows in the secretive $1.5 tril-
lion (£969bn) industry.
John Paulson, who earned $15bn
with a bet that the US housing mar-
ket would crumble in 2007, told
investors that his flagship Advantage
Plus fund fell 4.3 per cent last month,
leaving it down 11 per cent for the
year, people who invest with him
said.
News 3
Lloyds offloads
Crest Nicholson
stake to Varde
BANKING
▲
LLOYDS Banking Group confirmed
last night it has agreed to sell its
interest in bank-owned housebuilder
Crest Nicholson to US investment
fund Varde.
Lloyd’s has held around a quarter
of Crest’s debt and 30 per cent of its
equity since January 2009 when it
took part in a debt-for-equity swap.
The construction firm remains
around 90-per owned by its lenders.
“Lloyds Banking Group has
reached an agreement in principle
to sell its debt and equity stake in
Crest Nicholson for a cash considera-
tion,” said a spokesperson, who
declined to disclose the sale price.
“Lloyds Banking Group hopes to
continue to support Crest Nicholson
by providing its day to day banking
services,” the spokesperson added.
Crest’s 60-strong consortium of
owners rejected a £350m offer from
Hugh Osmond, the tycoon behind
Pizza Express and Punch Taverns, in
July.
But Lloyds has long been looking
to get rid of some assets taken on as
part of its HBOS acquisition.
Verde will become Crest’s largest
shareholder by some margin. The
Minneapolis-based fund focuses on
real estate and alternative invest-
ments.
CITYA.M. 9 SEPTEMBER 2010 News 5

Goldman mergers Phoenix rises

from ashes to
expert to join Glaxo the FTSE 250
as its finance chief FINANCIAL SERVICES

▲
SERIAL entrepreneur Hugh Osmond has seen
Germany’s MannesMann – a deal his Phoenix Group life insurance consolida-
▲

PHARMACEUTICALS
BY VICTORIA BATES
PHARMACEUTICALS giant
GlaxoSmithKline scored a coup yes-
terday as it hired one of Goldman
Sachs’ most successful rainmakers as
its new chief financial officer.
Simon Dingemans is currently
head of Goldman’s European mergers
and acquisitions business and has
been prolific in advising some of the
world’s largest companies in his 25
years in the investment banking
industry.
Last year, he acted for Friends
Provident on its £1.86bn takeover by
Resolution and in 2000, he advised
Vodafone on its £110bn buyout of
Goldman executive
Simon Dingemans will
move to drug firm
Glaxo as its new chief
financial officer
which remains, a decade later, the
world’s largest-ever hostile takeover.
Dingemans has also worked closely
with Glaxo itself for many years, most
recently advising on the formation of
specialist HIV company offshoot ViiV
Healthcare.
His experience in the M&A arena
will prove invaluable for Glaxo, which
is keen to hunt for further targets to
bolster its business via acquisitions.
The appointment “reflects the
need for Glaxo to operate with both
creativity and continued financial
discipline”, the firm’s chief executive
Andrew Witty said. “[Dingemans] will
bring valuable experience and capa-
bility to support us in our strategy to
grow and diversify the business.”
He joins following incumbent
finance director Julian Heslop’s deci-
sion to retire at the end of March next
year.
Dingemans is acting as a judge for
City A.M.’s inaugural awards ceremony
on Thursday 28 October.
tion vehicle promoted to the FTSE 250.
Phoenix said its £1.2bn market value would
make it one of the larger players in the index.
In a quarterly rejig, Home Retail Group,
Segro and Cable & Wireless Worldwide will
drop out of Britain’s FTSE 100 later this month.
The three will be replaced in the blue-chip index
by buyout group Resolution, pump manufactur-
er Weir Group and car parts maker Tomkins.
Companies outside the FTSE 100 that grow to
rank among the 90 most valuable British compa-
nies are automatically promoted, while the FTSE
100 members with the lowest value or which fall to
111th spot or below drop into the FTSE 250 index of
midrange stocks.
The latest review used closing prices from
Tuesday but the changes were confirmed by a FTSE
committee yesterday. The index changes will be
brought in after the market closes on 17 September.
Four other companies will enter the mid-cap
index: Jupiter Fund Management, online grocer
Ocado Group, miner Kenmare Resources and car
rental firm Avis Europe.
Moving out of the FTSE 250 were property trust
Hansteen Holdings, Gem Diamonds, Eaga,
Promethean World and Game Group.

KPMG looks to hand

over Connaught jobs
▲

PROPERTY
BY MARION DAKERS
HOUSING repair firm Connaught for-
mally appointed KPMG as its adminis-
trator yesterday, as rival property
companies looked to take over the
collapsed firm’s contracts.
KPMG will keep the firm’s property
maintenance arm trading until it has
farmed out its contracts to other
providers. Around 4,400 people face
redundancy.
Richard Heis, joint administrator,
said the group had also received
numerous expressions of interest for
Connaught’s surviving operations.
The smaller compliance and environ-
mental divisions, which employ 3,500
people, are unaffected by the admin-
istration proceedings.
Rival firm Mears said before the
collapse it was keen to take on
Connaught’s outstanding contracts.
“We are watching the situation care-
fully and we are obviously in a posi-
tion to pick up any work others are
not able to complete,” chairman Bob
Holt told journalists.
“We have spoken to Connaught
advisers. We have spoken to a number
of people in the sector about it”.
Shareholders are expected to be
wiped out in the administration pro-
ceedings. However, reports yesterday
said fund manager Tim Steer at
Artemis made a handsome profit
after beginning to short
Connaught stock last year. The
firm’s shares lost more than
90 per cent of their value
after June’s profit warning.
KPMG said it will
decide on job cuts as
soon as possible.

RICHARD HEIS Experience Company, which was the

RESTRUCTURING
PARTNER, KPMG
RICHARD Heis has plenty of experi-
ence in the most recent recession; he
worked with Landsbanki Securities
when its Icelandic parent went under
in 2008, sending shockwaves through
the world’s credit markets that can be
felt today.
He joined KPMG in 1983 (in the
teeth of another global recession), and
became a partner in 1997.
During his time at KPMG he man-
aged the Trocadero shopping centre in
London for two years, and worked on
formal insolvencies at Japan Leasing,
Barings Bank, Dunfermline Building
Society and the New Millenium
former owner of the Millenium Dome.
Joining him from KPMG are head of
middle market Richard Hill and head
of personal insolvency Richard
Fleming.
Mark Firmin, Brian Green and David
Costley-Wood are also involved with
Connaught’s property subsidiary.
Firmin was appointed head of
restructuring in the North of England
2009, and has worked on the insol-
vency of catalogue retailer Empire
Direct.
Green has acted as administrator
for Kwik Save and shoe shop Dolcis,
while Costley-Wood has worked on
First City Insurance and JJB Sports in
recent years.
Denton Wilde Sapte is providing
legal advice on the administration,
with Graham Paine and Nigel Barnett
as lead partners. The law firm was
advising Connaught’s lenders including
RBS before the collapse.
 6 Economic News CITYA.M. 9 SEPTEMBER 2010

Take home pay still

UK output figures
rose sharply in July

Picture: GETTY

dwarfed by inflation
services pay growth doubled to 1.2
s

UK ECONOMY
GROWTH in take home pay rose 1.3
per cent in the three months to
August compared to just 0.8 per cent
in the quarter ending in July, the
VocaLink Take Home Pay index will
show today.
However, with CPI standing at 3.1
per cent in July, pay growth is still
dwarfed by inflation.
Over the three months to August,
per cent but annual manufacturing
pay growth fell to 2.3 per cent.
Marion King, chief executive offi-
cer at VocaLink, said: “While the gap
between take home pay and inflation
has narrowed, the difference remains
high by historical standards. This is
tough on households as take home
pay growth lags nearly two percent-
age points behind the rise in the cost
of essential goods and services.”

Factories see
healthy rate
of growth
progresses, as the boost from firms
s
UK ECONOMY
BY JESSICA MEAD rebuilding their stocks begins to fade
and the pace of the global recovery
BRITISH manufacturing production slows. But this doesn’t mean that a
expanded at a robust pace in July, double dip is a prospect, rather a peri-
recording the strongest annual od of slower, patchy growth.”
growth rate since the end of 1994, Goodwin added that the strong
official data showed yesterday. annual growth rate must be put in
Manufacturing production context of the 15 per cent fall
was up 4.9 per cent on the in manufacturing output
year, while the monthly during the recession. “It
rate held steady at 0.3 MANUFACTURING looks like it will take
per cent. The wider OUTPUT another three years for

s4.9%
industrial production the sector to regain
measure also grew 0.3 previous peaks,” he
per cent in July on the warned.
previous month, tak- COMPARED TO JULY 09 Economists also
ing the annual growth STRONGEST pointed to the timelier
rate to 1.9 per cent. PERFORMANCE purchasing managers’
But while economists SINCE 1994 surveys, which show
cheered the upbeat manu- weaker expansion.
facturing figures, they “Should the surveys
warned that the sector INDUSTRIAL continue to soften over
was likely to run out of PRODUCTION the coming months,
steam in the third there would be a real
quarter.
Andrew Goodwin,
senior economic advis-
s1.9% danger that the indus-
trial recovery grinds
to a complete halt in
er to the Ernst & Young COMPARED TO the fourth quarter and
ITEM Club, said: “We are JULY 09 beyond,” says Capital
likely to see activity cool as Economics’ Jonathan
the second half of the year Loynes.

Surprise fall in Think-tank wary

German trade on UK growth
s

EUROPEAN ECONOMY ECONOMY

A SURPRISE fall in exports and near-
zero growth in industry output in
July yesterday suggested that the
German industrial juggernaut may
slow somewhat after building up
record momentum earlier this year.
Data from the Federal Statistics
Office showed exports, the main driv-
er in Germany’s rebound, fell by 1.5
per cent from June, while imports
shrank by 2.2 per cent, adjusted for
seasonal swings.
Industrial output also missed fore-
casts, creeping up by 0.1 per cent in
July compared to projections for a 1.0
per cent increase.
BRITAIN’S economic recovery soft-
ened in the quarter to August and the
pace of growth will decelerate further
in the coming months, a leading eco-
nomic think-tank warned yesterday.
The National Institute for
Economic and Social Research (Niesr)
said that output only expanded by 0.7
per cent on the previous quarter.
The pace of growth may have eased
from the 1.3 per cent in the three
months to July, but the think-tank
noted that this was still a robust rate
for the UK. Niesr does not expect out-
put to pass the peak it reached in
early 2008 until at least 2012.
CITYA.M. 9 SEPTEMBER 2010 News 7

A three-way Oracle to pay ex-HP chief Hurd

split for MPC up to $11m in salary and bonus
stepped down from HP because of a pensation consultant with the Hay

▲
TECHNOLOGY
BY HARRY BANKS scandal involving expense reports Group, said it was difficult to esti-
shadow committee all voted to keep and a female contractor. mate the value of stock options.
▲

UK ECONOMY
BY JESSICA MEAD
A THREE-WAY split has emerged in
City A.M.’s Shadow Monetary Policy
Committee (MPC) this month, ahead
of the Bank of England’s policy deci-
sion scheduled for midday today.
Two hawks are sustaining their call
for a rate rise while a dove is now
pushing for further quantitative eas-
ing. Both City A.M. editor Allister
Heath and Henderson’s Simon Ward
still seek an increase in interest rates
of 0.25 per cent. They argue that the
recovery is already well under way
and that high inflation warrants a
tightening of policy.
However, the Institute of Directors’
Graeme Leach emerges in the dovish
camp, saying that the MPC should
announce a small expansion in quan-
titative easing of around £25bn.
The remaining six members of the
monetary policy on hold this month, ORACLE has offered its new co-presi- According to the offer letter, filed However, he said a “theoretical”
following a “wait-and-see” policy. dent, former Hewlett-Packard chief yesterday with the US Securities and estimate based on four years of serv-
However, four of these six explicitly Mark Hurd, a hiring package with a Exchange Commission (SEC), Oracle is ice and Oracle’s shares reaching
said that further loosening may be bonus of up to $10m (£6.5m) and offering Hurd a starting annual base $30.60 would make Hurd’s hiring
required in the coming months options potentially worth tens of mil- salary of $950,000 and a bonus of as package worth about $72m, with
should the economy take a turn for lions more. much as $10m, plus options to pur- $66m of that in options that vest over
the worse. Oracle, the world’s third-larges soft- chase 10m Oracle common shares four years.
Speculation of a three-way split at ware maker, named Hurd co-presi- after the next board meeting. Oracle shares closed at $24.14 on
the Bank of England intensified dent on Monday, a month after he Fred Whittlesey, an executive com- yesterday.
ahead of last month’s meeting but
the minutes revealed that only hawk
Andrew Sentance dissented from the
majority in his call for a rate rise. But
the minutes showed again that the
MPC had actively discussed the possi-
bility of firing up the printing presses
once again.
With leading surveys pointing to
slower growth in the third quarter
some of the MPC may be tempted
towards further loosening. Others
may have been convinced by
Sentance of the dangers of inflation.

CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M.

“Rates should be raised by 25 basis points as a symbolic hike to
show that the MPC is serious about targeting inflation. The econ-
omy is growing, albeit slowly, with yesterday’s factory stats fur-
ther evidence that we won’t suffer a double-dip recession.”

SIMON WARD | HENDERSON

“Raise by 25 basis points. Policy normalisation should proceed
barring renewed money supply weakness. Nominal GDP growth
of six per cent over the last year is further evidence that the cur-
rent stance is too loose.”

MICHAEL SAUNDERS | CITIGROUP

“The MPC will stay on hold and not extend quantitative easing.
It really is not a close call. Given the Inflation Report forecasts,
the MPC will not extend QE unless the economy weakens
markedly.”

JAMIE DANNHAUSER | LOMBARD STREET

“Business surveys suggest third-quarter output growth may be a
tad weaker than we expected. Even so, there is little reason for
the MPC to alter its stance at this stage. The chance of more QE
over the next year remains slim in our view.”

VICKY REDWOOD | CAPITAL ECONOMICS

“With inflation still high, I’d do nothing this time. But I’d cer-
tainly consider doing more quantitative easing within the next
couple of months if the economic recovery continues to show
signs of faltering.”

TREVOR WILLIAMS | LLOYDS TSB

“Despite strong second-quarter growth, the recovery remains
anaemic. Housing numbers are slipping and confidence is falling.
The risk still seems weighted towards too weak growth. Hold
with a bias to ease if the economy takes a turn for the worse.”

GEORGE BUCKLEY | DEUTSCHE BANK

“Economic news remains mixed – certainly not robust enough to
justify a tightening. While we can’t rule out the need for further
loosening, we'd recommend unchanged rates until the evidence
shifts decisively one way or another.”

HOWARD ARCHER | IHS GLOBAL INSIGHT

“No change for now, but further QE may be justified soon. The
weaker August PMIs suggest that a double-dip is an increasing
risk, and credit conditions remain worryingly tight. Meanwhile,
underlying inflation shows signs of moderating.”

GRAEME LEACH | IOD

“The MPC should announce a small expansion in quantitative eas-
ing of around £25bn together with a strong signal that a much
larger extension will be undertaken if economic weakness intensi-
fies. But in reality, it will probably hold fire for another month.”
 The Capitalist
8 CITYA.M. 9 SEPTEMBER 2010
STRIP CLUB
BOSSES
STAKE OUT
THEIR TURF
LOOKS like The Capitalist ruffled a few
feathers yesterday with a tale about for-
mer Spearmint Rhino managing director
Simon Warr setting up a new strip club,
Platinum Lace, on his previous employer’s
territory in the heart of London.
Spearmint Rhino bounded in immedi-
ately with a robust defence of its business,
which is apparently booming at present
despite the break-up of the chain’s out-of-
London clubs from its flagship Tottenham
Court Road venue last year.
“Like a lot of other companies,
Spearmint Rhino was affected by the
recession but now the bankers have their
bonuses back and the Arabs continue to
splash the cash, revenue in the flagship
London club is up 33 per cent,” a club
spokeswoman informs me breezily. (I’ll
take her word for it, twenties tucked into
G-strings an’ all.)
But have we touched a raw nerve?
Apparently, the club’s success can be
“credited to the change in management”,
with new vice president John Specht hav-
ing been flown in a year ago.
Funnily enough, ex-day-to-day boss
Warr split from Spearmint founder John
Gray on less than friendly terms – and I’m
Business is booming on Tottenham Court Road, apparently Pics: REUTERS, Micha Theiner/City A.M.
told they’ve now had to get the lawyers
involved to iron out their differences.
ELECTION FEVER
They’re sticklers for etiquette over at the OFF TO THE STICKS
City of London Corporation. In pops an Comic email of the day: courtesy of pri-
email from the organisers of a charity
abseil today, proudly stating that property
bigwigs taking part include Alderman
Michael Bear, “the Lord Mayor elect”.
Not a few minutes goes by before a cor-
rection comes rushing in, admitting that
Bear hasn’t actually been elected as yet.
Bear – who works as regeneration direc-
tor at Hammerson – is the “preferred can-
didate” of the City’s electoral college,
though once in a blue moon the livery-
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“Feathers
were ruffled
by the ex-
Spearmint
Rhino boss
setting up a
club on his
ex-employer’s
Brothers’ London art, expected to raise
territory” around £2m, reveals a familiar sight.
Along with paintings, sculptures and
bric-a-brac, the administrators are flog-
ging a few of the bank’s wall plaques and
signs – with each expected to fetch up to
£3,000. Ebay has been doing a roaring
trade in such goods since the collapse, so
expect fierce competition among bidders.
men do vote against their superiors. He’s
up against David Wootton and Roger
Gifford in the election on 29 September. WELL CONNECTED
It’s off to pastures new for former
Alchemy director Eric Lakin, who left the
firm at the end of last year. He’s joined
Oakley Capital Corporate Finance as a
vate equity group Origo Partners, setting director tasked with expanding the tele-
up a corporate finance JV in Mongolia. coms and technology practice, after a
“This is really quite exciting,” gushes the nine-month break. Not for Lakin the idle
firm, “as a number of UK bankers have life, though: since December he’s been
chosen to relocate to Mongolia…” What advising in an interim role at venture cap-
was that about a mass exodus? ital firm DN Capital, as well as training as
a certified football coach. Both roles have
paid off: as well as his new job, he’s now
ONE MAN’S JUNK... coaching an under-sevens footy team on
A flick through the catalogue for the which his son plays, as well as the son of
upcoming Christies auction of Lehman Fulham striker Andrew Johnson.
CITYA.M. 9 SEPTEMBER 2010 News 9

Dana battles BEST OF THE BROKERS

ANALYSIS l SThree
300 p
290
276.00
ANALYSIS l Ocado
160 p
155
144.50
8 Sep
ANALYSIS l Prezzo
50 p
48
49.00
8 Sep

to stop £1.9bn
280 8 Sep 46
270 150
44
260 145
42
250 140 40
240
230 135 38

offer by KNOC
14 Jun 2 Jul 22 Jul 11 Aug 1 Sep 9 Aug 16 Jul 23 Aug 31 Aug 7 Sep 14 Jun 2 Jul 22 Jul 11 Aug 1 Sep

STHREE OCADO PREZZO

Seymour Pierce upgraded the recruiter to a
“buy” from “outperform” ahead of tomor-
row’s trading update, with a target price of
330p. The broker notes SThree’s peers have
tor. He said: “For a national oil compa- indicated the jobs market is improving.
▲
Shore Capital maintains a “sell” rating on
the grocer, with a target selling price of
157p. The broker says Ocado’s flotation in
July has not boosted sales, and the lack of
other figures makes forecasting risky.
Numis Securities rates the restaurant chain
an “add” following its first-half results, with
a target price of 58p. The broker has
upgraded its forecasts by an average of 17
per cent, with EPS forecast at 4.4p.

ENERGY
BY OLIVER SHAH
DANA PETROLEUM is braced for a
£1.9bn hostile takeover by Korean
National Oil Corps after investors dis-
missed an ambitious defence docu-
ment demanding a higher price.
Shares in Dana closed almost flat
at £18.09, just above the level of state-
owned KNOC’s £18 per share offer,
indicating shareholders were
unmoved by the argument. The board
of the Aberdeen-based oil and gas
explorer said the company was worth
between £21.10 and £24.65 per share
based on the valuation of an inde-
pendent expert. Dana also
announced the much-trailed pur-
chase of North Sea assets from
Canada’s Suncor for £240m, which it
said contributed to the uplift.
Chairman Colin Goodall again
called on investors to reject the
approach from the Far Eastern preda-
ny to launch a hostile offer without
access to detailed technical informa-
tion means KNOC must be highly con- To appear in Best of the Brokers email your research to notes@cityam.com
fident the Dana assets are worth
much more than the offer price.”
But City insiders disagreed, noting
that KNOC already had letters of
indicative support from shareholders
accounting for 49 per cent of Dana’s
shares. Analysts expected KNOC to
begin buying the stock with a view to
a hostile takeover.
David Hart at Westhouse Securities
said: “My gut feeling is they could
stick by their £18-per-share offer and
do it, but whether they decide to go
down the path of least resistance and
raise the bid slightly I don’t know. On
balance, it’s more likely to go hostile.”
Analysts at JPMorgan said £18 per
share “represents a good price for this
stock”. Citigroup agreed and pointed
out the absence of “white knight” bid-
ders to help Dana fight for a raise.

ANALYST VIEWS: WILL DANA’S DEFENCE

CHANGE THE COURSE OF THE BATTLE?
Interviews by Oliver Shah

KEITH MORRIS | EVOLUTION SECURITIES

“ On first reading of the document, the main defence centres

upon an independent expert’s valuation of the existing assets at £21.20
per share and the potential for exploration prospects to quadruple

”
reserves by full-year 2012. Like Venture’s defence document against
Centrica, though, we believe it will prove futile.

DAVID HART | WESTHOUSE SECURITIES

“ The market hasn’t interpreted the document as a significant

addition to the argument. KNOC now has to stand back and say it does-
n’t contain anything we weren’t including in our offer, so £18 per share

”
stands. On the other hand, they may want to make the transaction quick-
er and smoother and sit down with Dana.

DAVID BUIK | BGC PARTNERS

“ The chance of getting a better offer from the Koreans would

be a fine thing. In the circumstances it’s a fair offer and I can’t see any
particular reason why they should up the ante. There is strong share-

”
holder support for the takeover as it is, and we would have seen the
share price surge if people thought otherwise.

JOHN MACGOWAN veteran broker who has worked on a

RBS HOARE
GOVETT
DANA PETROLEUM has hired RBS
Hoare Govett, RBC Capital Markets
and Morgan Stanley to defend against
the Koreans’ siege.
Leading the team at RBS Hoare
Govett is John MacGowan. MacGowan
has had a busy summer, advising Dana
on its £270m purchase of Dutch oil
company Petro Canada Netherlands in
June and guiding industrial group BSS
on its purchase by Travis Perkins.
He is joined by Stephen Bowler, a
number of transactions including the
£350m fundraising by private equity
lender Intermediate Capital Group
last year. Also on board for RBS Hoare
Govett is Graham Hertrich.
Dana’s other advisers include RBC
Capital Markets’ Josh Critchley, who
worked with Resolution on its recent
acquisition of Axa’s UK life and pen-
sions business, and Andrew Foster of
Morgan Stanley.
On the KNOC side is Bank of
America Merrill Lynch. Andrew
Osborne, a Hoare Govett alumnus, is a
key player, as are bank chairman
Simon Mackenzie-Smith, Philip Noblet
and Anya Weaving. For Noblet, a suc-
cessful deal would cap a good month.
He was made co-head of M&A for
Europe and the Middle East this week.
CITYA.M. 9 SEPTEMBER 2010
Investors attack Mecom
▲
MEDIA
BY HARRY BANKS
DAVID Montgomery, former chief
executive of the Mirror Group, is fac-
ing his second investor revolt in two
years as the three biggest shareholders
in Mecom, the newspaper group he
founded, are calling for him to go.
Aviva, Invesco and Legal & General –
David Montgomery is under fire for the second time Picture: REX which together own more than 50 per
WestLB sale
due to start
this month 
  for Vodafone
cent of Mecom’s shares – are under-
stood to be behind the investor revolt.
The trio are thought to have proposed
an alternative candidate to run the
company but have been rejected by
non-executive directors, led by
Alasdair Locke, the chairman, who say
they fully support Montgomery.
Patrick Thillieux, a veteran
European media executive, is believed
to be the person put forward for the
News 11
top job.
Montgomery faced an internal
revolte in May 2009 when, as executive
chairman, a group of directors tried to
oust him from the board. The arch
cost-cutter successfully fought back
and won the support of investors. Six
directors later resigned.
Mecom’s shares have experienced a
roller-coaster ride, falling 97 per cent
in 2008 before recovering this year.
Court ruling
ends badly
 "  
  #
▲
BANKING
BY HARRY BANKS
THE starting gun for the sale of
German landesbank WestLB’s has to
sound by the end of this month, the
new finance minister of its home state
of Northern Rhine-Westphalia said yes-
terday.
The new state government is hoping
to find a buyer among rival landes-
banks, finance minister Norbert
Walter-Borjans said. The bank has to be
sold off by the end of 2011, as required
by the European Union, as a condition
of its bailout during the credit crisis.
WestLB’s restructuring programme
involved transferring about €77bn
(£53bn) of its toxic and non-strategic
assets to a “bad bank”, which will be
liquidated gradually.
The premier of the southern
German state of Baden-Wuertemberg,
Stefan Mappus, agreed that the landes-
bank sector was ailing and in dire need
of support, but said he wanted his
state’s landesbank, LBBW, to be
restored to health before stepping
towards a merger.
“Baden-Wuerttemberg will actively
push ahead with this,” he said in
remarks citing Frankfurt-based landes-
bank Helaba as a preferred partner.
“Outside of Helaba, there aren’t too
many landesbanks that can say they
are healthy,” he said, adding that the
country’s “eight landesbanks are too
many, especially when six have no
$#


business model”.
Helaba this week said it could take
  
part in consolidation of the troubled
sector, but set a high bar for such a
move.
Germany’s independent public-sec-
tor landesbanks account for 18 per
cent of total market share, but critics 
say they are too small to compete
with international players on capital 
markets, and too big to act just as sup-
pliers of corporate loans to mid-size
companies.
CITY VIEWS: SHOULD TAXPAYERS WHO HAVE INADVERTENTLY UNDERPAID BE FORCED TO RETURN BACK TAXES?
GAVIN PEACOCK | E-DIALOG
“Certainly people should pay their
taxes, but if it’s a mistake on the gov-
ernment’s part then the letters should
be more of an apology and a request
for payment if possible. Not everyone
has the cash lying around to pay a year’s
worth of tax out of the blue.”

▲
TELECOMS
BY HARRY BANKS
INDIA’S tax department has jurisdic-
tion over tax bills in cross-border
mergers, a court ruled yesterday, dis-
missing a petition by Vodafone and
setting a precedent for foreign firms
looking to buy into Indian companies.
The Bombay High Court ruling
came as foreign firms show renewed
interest in acquiring Indian compa-
nies, lured by growth prospects in the
world’s second-fastest growing major
economy.
Vodafone, fighting a tax bill in
India from its 2007 purchase of
Hutchison Whampoa’s mobile busi-
ness in the country, had filed an
appeal with the court in June chal-
lenging the tax department’s jurisdic-
tion over the bill.
After the court ruling, Vodafone
said it remained confident that there
was no tax to pay on the transaction.
The company said it needed time to
review the judgment and consider its
next step that includes an appeal to
the Supreme Court.
“Vodafone is seeking legal advice to
challenge this part of the judgment,”
the FTSE 100 group said in a state-
ment.
The world’s largest telecommunica-
tions operator by revenue, which paid
$11.1bn (£7.2bn) for the deal with
Hutchison, has not said how much
the authorities were seeking.
ANALYSIS l Vodafone
p
159.80
8 Sep
155
   !        $

 "      $      
145
        # $   

135
7 Jun 25 Jun 15 Jul 4 Aug 24 Aug
Interviews by Marion Dakers
KRUNAL SAVANI | ROYAL LONDON ASSET MANAGEMENT LANCE HARRIS | BPP LAW SCHOOL
“It’s the tax authorities’ mistake and “Yes, I suppose people should have to
they have got to bear a lot of the cost. pay the tax they owe, providing it’s
In this economic climate, people can’t done in a way that allows them to pay
really afford to pay such sums, espe- gradually. Otherwise, it will really
cially in the space of a year when the mess with people’s finances. If I got
economy is still fragile.” one of these letters I would respond
and if I owed money, then I
would pay it back.”
 12 Consumer News
Richemont in
lift as watch
sales thrive
▲
RETAIL
BY JOHN DUNNE
SWISS luxury goods group
Richemont’s five-month sales jumped
37 per cent, beating forecasts and
confirming a rebound in the sector as
wealthy Asians splash out again on
luxury watches and jewellery.
Richemont, normally cautious in
its outlook, said yesterday net profit
for its first half to September should
be significantly higher than last year.
However, Richemont, which pro-
duces mainly in Switzerland, said it
would also be hurt by exchange rates,
given the surge in the Swiss franc
against the euro – its reporting cur-
rency – and the dollar.
“The improved trading environ-
ment is certainly welcomed. However,
it is far too soon to draw any conclu-
sions about the sustainability of the
economic recovery,” chairman and
chief executive Johann Rupert said.
Peers like Swatch and LVMH have
also reported double-digit growth in
watch and jewellery sales in the first
CITYA.M. 9 SEPTEMBER 2010
Prezzo revenue
rises as its new
outlets pay off
LEISURE
▲
PIZZA restaurant chain Prezzo yester-
day reported a 21 per cent rise in first-
half adjusted pre-tax profit, helped by
new restaurant launches and
improved margins, and said it was
confident for the rest of the year.
half and Swiss watch exports rose The company, which opened seven
almost 20 per cent between January new restaurants during the first half,
and July, after the worst slump in said current trading was in line with
decades. Legoland in Windsor is a showcase for the Lego brand which is growing Picture: REX expectations.
Richemont shares have risen January to June pre-tax profit was
Lego pieces together a
almost seven per cent this month, hit- £6.2m compared with £5.1m a year
ting a two-month high earlier this ago.
week. Revenue grew 11 per cent to
“Provided the macroeconomic out- £48.4m. Overall branch profit margin
strong half year’s results
look does not deteriorate ahead of the was 14.4 per cent, compared with 13.5
key Christmas period we believe the per cent last year.
company could deliver a stronger Prezzo, which recently agreed to
than expected margin recovery in the buy 11 leasehold sites together with
next couple of years,” Citi analyst the Caffe Uno trade mark for £3.1m,
Thomas Chauvet said. said its recent trading gave it the con-
RETAIL UK boss Marko Ilincic said Lego is fidence to reactivate its wider expan-
▲
ANALYSIS l Richemont BY JOHN DUNNE on track for a sixth-consecutive year sion plans.
€
32.75 of growth, with new Harry Potter Prezzo chairman Michael Carlton
32 8 Sep TOY manufacturer Lego, famed for its products launching before Christmas. said: “We are encouraged by the level
31 colorful building blocks, yesterday Classic ranges, including Lego City, of trading that we have seen in recent
30 reported a 34 per cent jump in sales Lego Duplo, Lego Star Wars, Lego months and this has given us the con-
to 5.86bn Danish krona (£646.7m) in Creator and Lego Technic maintained fidence to reactivate our wider expan-
29 the first half of the year. growth. sion plans. As a result, the board is
28 The company said Hollywood- However, the Danish-based compa- confident of delivering a positive out-
branded tie-ins on films like Toy Story ny warned that it would be making come for 2010 as a whole.”
27
and Prince of Persia and a new range “stringent” cuts to costs as the recov- Prezzo shares have gained 67 per
of board games had helped to pro- ery in the wider toy market remains cent in value since the beginning of
7 Jun 28 Jun 16 Jul 5 Aug 25 Aug duce the healthy figures. uncertain. the year.
CITYA.M. 9 SEPTEMBER 2010 Consumer News 13

DSG reverts
Thorntons is to Dixons in
hit by a fresh name swap
drop in profit

▲
CONSUMER
DSG International will revert to being
called Dixons Retail after sharehold-
ers yesterday approved the plans at
the electrical group’s AGM.
RETAIL
▲

The company said in a statement: The rebranding to DSG was aimed

BY JOHN DUNNE
CHOCOLATE retailer Thorntons yes-
terday posted a 2.4 per cent fall in
half-year profit as it prepared to name
a replacement for outgoing chief
executive Mike Davies.
Chairman John von Spreckelsen
said talks with a prospective new
chief were well advanced but he rea-
mained tight-lipped about who the
candidate is.
Acting chief executive Mark
Robson will return to his old role as
finance director of the chocolate
maker.
The firm, which issued a profit
warning in May, said it made a pre-
tax profit of £6.1m in the year to 26
June.
On average, analysts had expected
around £6.5m. The group, which
trades from around 600 stores, said
overall revenue was flat at £214.6m.
Thorntons said its key challenge
continues to be the own stores chan-
nel, which saw a 3.6 per cent fall in
sales.
“We have strengthened our senior
retail management team and we
believe that this, together with exten-
sive product innovation and changes
to the promotional and marketing
programmes, should have a positive
impact on trading in the lead up to
Christmas.”
The firm said trading since the
year-end had been in line with inter-
nal expectations.
Thorntons, which cut net debt to
£26m during the year, maintained its
total dividend payout at 6.05p.
ANALYSIS l Thorntons
p BRAZILIAN-BORN Mike Davies took
86
84
82
80
78
76
74
7 Jun 28 Jun 16 Jul
Thorntons’ profit has been hit by the rising costs of ingredients.
MIKE DAVIES week that 35 staff at the company’s
head office were made redundant.
THORNTONS Davies inherited a profit slump at
CHIEF EXECUTIVE the firm and tried to turn around its
fortunes with a more extensive prod-
uct range. His clarion call has been
“innovation” with new lines inspired by
products from Milan and Paris. Davies
said that he wanted to “turn the com-
pany’s strategy on its head”.
80.75 the role of chief executive at For the first two years under Davies
8 Sep Thorntons in October 2006. He had and chairman John von Spreckelsen,
previously been president of Mars in Thorntons went from strength to
Latin America and is a veteran of the strength, sweetening investors with
confectionary industry. He also worked rising profits, increasing sales
at consumer giant Procter & Gamble. throughout the UK's largest retailers
He has faced a challenging time at and steady growth from its own
Thorntons as the recession has taken namesake outlets. However, the onset
its toll. Davies said earlier in the year of the worldwide downturn produced
he would stand down in the same an increasingly tough environment.
5 Aug
at being more appealing to an inter-
national market but the move has
fallen flat.
The company, which owns Curry’s
Picture: REX and PC World, has been forced to
restructure its overseas business, clos-
ing stores in Italy and Spain and sell-
ing its Polish and Hungarian chains.
Last week the company reported
that sales of flatscreen TVs jumped 40
per cent on the back of its World Cup
promotion.
Meanwhile total sales across the
group rose by three per cent.
That included sales at its Nordic
Elkjop business, as well as stores in
Greece and Italy. Sales over the
internet rose by 12 per cent over the
period.
DSG said that its retail partnership
with Phones4U will mean that it will
have 50 mobile shop-in-shops in time
for Christmas.
Its name change back to Dixons is
seen as a way of improving brand
awarenesss and to provide a launch-
ing pad for further sales increases
across its businesses.

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

Religare Capital Markets JP Morgan DC Advisory Partners

Jefferies The investment banking group, part of The bank has appointed Rhian Horgan The advisory firm, formerly Close
The investment banking group has poached Indian financial services behemoth as head of alternative investments for Brothers Corporate Finance, has taken
Dominic Lester from rival UBS to head up its Religare Enterprises, has hired Jason its private bank, based in London. on Tosh Kojima as a managing director
European technology and telecoms investment Todd as its new global head of equity Horgan joined JP Morgan’s alterna- and head of the Japan Asia focus
banking team. strategy. tive investments team in 2008, advis- group. He joins from Nomura.
Lester has been at UBS for almost 20 years, Todd joins from Morgan Stanley, ing private clients on the construction
latterly as head of technology investment bank- where he was latterly the firm’s US and of hedge fund, private equity and real AllianceBernstein
ing for the EMEA region. He is joined at global equity strategist, based in New estate portfolios. The investment manager has hired Tim
Jefferies by new senior vice president Daniel York. He also previously spent 12 years Prior to that, she ran the global equi- Banks as head of defined contribution
Aharoni and vice president Guillaume working at JP Morgan, latterly as head ty derivatives business for the private sales. He joins from Prudential, where he
Taurignan, who also move over from UBS. of the US and global strategy teams. bank and private client services. was director of business development.

To appear in CITYMOVES please email your career +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com

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 14 Housing News
Barratt beats
forecasts but
warns of dip
▲
CONSTRUCTION
BY HARRY BANKS
HOUSEBUILDER Barratt Developments
said concerns about the economy and
the lack of mortgage finance meant
the market for new housing was still
challenging as it reported better-than-
expected full-year profits.
“It’s early days in the autumn-sell-
ing season but so far private reserva-
tion rates are in line with
expectations and prices are holding
up,” chief executive Mark Clare said.
House prices fell much faster than
expected last month, according to a
monthly survey from mortgage
lender Nationwide, stoking concerns
the UK may be heading for a double-
dip recession.
Barratt, which is building more
houses rather than flats at present,
said it would continue to focus on
prices rather than volume and would
not reinstate dividends, unlike rivals
Bovis and Persimmon.
For the year to the end of June,
Barratt reported an operating profit
This adver tisement contains numerous trade marks belonging to The Royal Bank of Scotland Group plc and other companies in the RBS Group. These trade marks include, but are not limited to, The Royal Bank of Scotland logo, The Royal Bank of Scotland and RBS. If you are in doubt as to
whether an item is a trade mark of The Royal Bank of Scotland Group plc or a member of the RBS Group, please contact us for clarification at the registered office address The Royal Bank of Scotland plc, Registered in Scotland No 90312. Registered Office: 36 St Andrew Square, Edinburgh
EH2 2YB. RBS is authorised and regulated in the UK by the Financial Ser vices Authority
of £90.1m, up from £34.2m one year
ago. Barratt had said in July it would
report an operating profit of at least
£85m for the year thanks to a strong
second-half performance.
Clare said the year had also seen a
fall in the proportion of investors buy-
ing homes, with sales at 10 per cent
from 25 per cent previously.
Also yesterday, Berkeley Group,
which differs from Barratt in that it
primarily develops upmarket apart-
ments in London, said it was seeing
strong interest from international
buyers looking to invest in the capital.
ANALYSIS l Barratt
p
110 99.90
8 Sep
105
100
95
14 Jun 2 Jul 22 Jul 11 Aug
y. RBS is an authorised agent of The Royal Bank of Scotland plc N.V in cer tain jurisdictions.
Barratt said yesterday it would not re-instate the dividend
If you’re bullish on the housing
market, the shares are oversold
WHETHER you deem Barratt a good
buy depends on whether you are a
bull or a bear on the housing mar-
ket next year.
For the bulls, there are plenty of
positives: net debt has fallen £910m
to £367m since last year, forward
sales are up 22 per cent to £847m
and crucially operating margin has
surged to 4.4 per cent from 1.5 per
cent.
Despite this the shares are trad-
ing at just half Barratt’s net asset
value, lower than all their UK peers,
and pricing in a significant house
price fall. Admittedly, while sale
prices have gone up – 17.8 per cent
1 Sep
Picture: GETTY
in the past six months – this is
because Barratt is currently building
more houses than flats to reflect
shifting demand, rather than prices
rising.
But its landbank is short – just
five-and-a-half years, meaning it can
trade out of difficult conditions rela-
tively quickly. It also has good expo-
sure in London – where prices are
holding up well.
It’s a high risk buy, but currently
Barratt looks oversold.
BOTTOMLINE
Analysis by Katie Hope
To register for this event, visit:
www.rbs.co.uk/markets
CITYA.M. 9 SEPTEMBER 2010
Halifax shocks
bears with rise
in house prices
PROPERTY
▲
HOUSE prices rose for the second
month running in August, mortgage
lender Halifax said yesterday, con-
founding expectations for a fall
though it still expected house prices
to stagnate overall this year.
House prices rose 0.2 per cent in
August, Halifax said, which, coming
after a 0.7 per cent rise in July, had
helped to reverse declines recorded
between April and June.
That left prices 4.6 per cent up in
the three months to August com-
pared with a year ago and took the
average price of a home to £167,953 --
nine per cent above its low in April
2009 but still 16 per cent down from a
peak in August 2007.
Analysts had expected a fall of 0.5
per cent on the month, for a three-
month annual rate of 4.4 per cent
after rival mortgage lender
Nationwide reported a 0.9 per cent
drop in house prices in August.
Halifax economist Martin Ellis said
that August’s rise still only left prices
at a similar level to where they were
at the end of 2009, and he expected
house prices to remain static in 2010
as a whole. Housing market activity
has been muted in recent months,
with approvals hovering at less than
half the level they reached at the peak
of the housing market in 2007.
CITYA.M. 9 SEPTEMBER 2010
RETAIL
OF THE YEAR
BROKER
W
ITHOUT brokers like the
ones on our list, money
would sit in bank accounts
gathering dust. They are the
soul of the UK’s investment strategy.
BARCLAYS
STOCKBROKERS
The UK’s largest execution-only
retail stockbroker, the firm has
moved with the times and as well
as equities and funds, now also
offers ETFs, CFDs, structured
products, spread trading, covered
warrants and foreign exchange
trading. It has increasingly start-
ed to use social media to deepen
its engagement with clients, and
recently launched a new product
called SmartWoman, which is
designed to encourage more
women to invest.
PROPERTY
OF THE YEAR
FIRM
T
HE City’s skyline is changing.
Skyscrapers are springing up –
okay, more slowly than before,
but they are coming. Added to
that the commitment to opening
BRITISH
LAND
The FTSE 100 company is show-
ing great confidence in the City,
first with the 35-storey
Broadgate Tower and 201
Bishopsgate complex, which was
completed in 2009, then the
Ropemaker development, and
now with the agreement to devel-
op 5 Broadgate. Its 225m-high
Richard Rogers-designed “Cheese
Grater” at 122 Leadenhall Street
is on the back-burner, but is one of
the most keenly-awaited new City
landmarks.
Headline sponsor
Category sponsors
| The Shortlist
At the moment, when people are
looking for stability, they are more
vital than ever. Innovative, forward-
looking and offering great personal
service, these five are stars.
BREWIN
DOLPHIN
One of the founding firms of the
London Stock Exchange in the
18th century, the firm has grown
through a series of mergers to
become one of the largest inde-
pendent investment managers for
private clients in the UK. The
group now has 41 regional offices
and £23bn funds under manage-
ment and 669 approved invest-
ment managers. It prides itself on
personalisation, and says that
every client’s portfolio is designed
specially and managed locally.
|
retail space and the whole character
of the Square Mile is changing. At a
time when it might have been easier
to abandon their projects, they have
shown confidence in the City.
HERON
Under the stewardship of Gerald
Ronson the company – which is
named after Henry Ronson, the
current chief executive officer’s
father – shed its risky assets
before the credit crunch hit and
protected itself from the storm
that engulfed so many other
property firms. It is behind the
City’s two most spectacular new
residential and business buildings,
the Heron and Heron Tower. The
firm is helping to define the 21st
century City’s skyline.
In association with
Don’t miss the City event of the year –
get online now and book your table for
the City A.M. Awards on Thursday 28
October 2010 at Grange St Paul’s Hotel,
London EC4. www.CityAMAwards.com.
COLLINS
STEWART
Well-known chairman Terry
Smith recently stood down, to be
replaced by Mark Brown, but the
basics of Collins Stewart’s busi-
ness remain unchanged; it prides
itself on mixing personal client
service with “an institutional
investment approach”. It has a
diverse offering that goes beyond
UK equities, and includes deriva-
tives and global equities. The
downturn has led it to innovate,
and it has moved heavily into
fixed interest advisory services.
Don’t miss the City event of the year –
get online now and book your table for
the City A.M. Awards on Thursday 28
October 2010 at Grange St Paul’s Hotel,
London EC4. www.CityAMAwards.com.
LAND
SECURITIES
The development of One New
Change at Cheapside is one of the
biggest City developments in liv-
ing memory. The aim is to make
the City into a destination for
shoppers and to entice non-work-
ers here – even at weekends.
There will be 220,000 sq ft of
retail space, restaurants, and a
roof-terrace with spectacular
views of that under-used asset, St
Paul’s. At the moment it’s a build-
ing site, but soon it will be a new
heart for the City.
Awards reception sponsor
City A.M. Awards 2010
HARGREAVES
LANSDOWN
A recent change of personnel at
the top – founder Stephen
Lansdown has decided to step
down and take on a non-execu-
tive role – is unlikely to change
KILLIK
In the 21 years since it was found-
ed, Killik has grown to manage
£2bn for 25,000 private clients,
and is one of the few stockbrokers
that offer nominee shareholders
SELLERS
PROPERTY
The Shard at London Bridge will
be one of the most spectacular
buildings anywhere, when it is
completed. The Renzo Piano-
designed skyscraper will stand
CB RICHARD
ELLIS
Think of a building in the City,
and CB Richard Ellis has proba-
bly been involved with it at some
point. It is the leasing agent for
the Pinnacle, the 63-storey,
15
TOMORROW
ALTERNATIVE MANAGER
OF THE YEAR
things fundamentally for the
Bristol-based broker. And things
are going well for it. Recent
results showed an 18 per cent
increase in profits. It has grown
throughout the financial crisis,
and now has approximately
£17.6bn of assets under adminis-
tration or management on behalf
of private investors. Its flagship
Vantage brand has 300,000
clients. Big is beautiful.
the ability to vote. The firm prides
itself on providing daily research,
and was instrumental in the
establishment of the LSE’s new
retail bond market in January
2010, which added a new string
to retail investors’ bow. As well as
traditional small and mid-cap
IPOs and secondary fundraising, it
is also bang up to date, offering
CFDs, spread bets and managed
futures.
310m high and be the tallest
building in Western Europe. The
viewing platform at the top, with
incredible City views, is expected
to draw 2m visitors a year. The
tower’s history has been trou-
bled, but is now secure after a
Qatari consortium bought an 80
per cent stake, with only Sellers
remaining of the original
investors. It makes the shortlist
for sheer perseverance.
945ft building currently under
construction on Bishopsgate, is
also selling space in the Heron
Tower, and the sparkly new
525,000sq ft glass and steel
Watermark Place, the new office
space between Cannon Street
and London Bridge. It has also
been involved with HSBC selling
and re-selling its Canary Wharf
tower three times in the past 18
months.
Official venue partner
 16 News
Virgin ends strike threat
▲
AVIATION
BY BEN GRIFFITHS
VIRGIN Atlantic averted the threat of
the first strike in its 26-year history
yesterday, after it reached an agree-
ment with pilot’s union Balpa over
the time off its members take.
Under the deal Virgin pilots
remain entitled to “at least 120 days
off” a year, equivalent to an office
Kirsh fails
as Minerva
wins vote
▲
PROPERTY
BY MARION DAKERS
SOUTH African billionaire Nathan
Kirsh has lost his campaign to oust
the chief executive and chairman of
property developer Minerva, after
other investors rejected calls for a
boardroom shake-up and greater
financial disclosure.
About 64 per cent of Minerva
investors voted to keep existing man-
agement in place at an extraordinary
general meeting yesterday, and
Kirsh’s candidates for the roles with-
drew their challenge.
This move was the latest chapter of
a saga that has included a failed
takeover bid and several public spats.
Only 36 per cent of shareholders
voted in favour of the company reveal-
ing details of its financing and profit
share agreements. This includes
Kirsh’s 29.5 per cent stake.
“The spotlight is now firmly on the
management who need to justify the
trust shareholders have put in them.
“We remain a committed investor
and will continue to take the respon-
sibility of being the company’s largest
shareholder very seriously,” Kirsh’s
company KiFin said afterwards.
John Matthews, Minerva’s senior inde-
pendent director, said: “Our priority
remains delivery of full value for all
shareholders from Minerva’s portfolio of
high quality assets. We hope now to do
this without further distractions.”
ANALYSIS l Minerva
p spreads but analysts said overall the
110
93.00
105 8 Sep
100
95
90
14 Jun 2 Jul 22 Jul 11 Aug 1 Sep
Lupus forgets Hutchings with £17m profit GT reveals non-executives
▲
CONSTRUCTION
BY HARRY BANKS
LUPUS CAPITAL, the building materials
supplier, raised its operating profit 43
per cent for the first half, a year after
seeing off controversial tycoon Greg
Hutchings.
Lupus, which makes fittings for
doors and windows, notched up an
underlying gain of £17.3m in the six
months to July. Group sales defied
worker’s weekends and bank holi-
days. Virgin’s negotiating team was
led by chief executive Steve Ridgway.
Virgin, which is majority owned by
billionaire Sir Richard Branson, said:
“During the course of these discus-
sions both parties have also identified
some opportunities to modernise the
relationship between Virgin Atlantic
and Balpa in the future and we are
looking forward to working on this
tougher conditions in the key US hous-
ing market to rise 14 per cent to
£133.2m.
Lupus was left rocking last year
when executive chairman Hutchings
departed following a costly default on
the company’s debt. He twice attempt-
ed and twice failed to have himself
reinstated to the board.
Since then, a fresh management
team led by Louis Eperjesi and non-
executive chairman Jamie Pike has
together.” Balpa general secretary Jim
McAuslan described the talks as
“frank, to the point and creative.”
Meanwhile, rival British Airways’
19-month dispute with its Unite cabin
crew over pay and conditions contin-
ues. Earlier this week Unite’s
Heathrow branch membership called
on its national union to launch a bal-
lot for more strike action in the run
up to Christmas.
gone about stabilising Lupus’ business,
focusing on cashflow and maintaining
margins in the face of difficult eco-
nomic conditions.
Pike described the interim numbers
as “encouraging”. He said: “In building
products we expect to make further
progress in the balance of the year,
although we do not expect to see a
repeat of the marked period-on-period
increases evident in the first half.”
Lupus shares rose 2.4 per cent to 85p.
Virgin boss Steve Ridgway reached a deal with pilots
ACCOUNTANCY
GRANT Thornton (GT) has become
the first large accounting firm to
comply with new governance rules by
revealing its new non-executives.
The three non-executives are
Richard Eyre, chairman of the Eden
Project; Caroline Goodall, a consult-
ant to law firm Herbert Smith; and Ed
Warner chairman of UK Athletics.
The UK’s biggest eight audit firms
CITYA.M. 9 SEPTEMBER 2010
Picture: Micha Theiner/City A.M.
Anglo Irish
to be split
into two
▲
BANKING
BY HARRY BANKS
IRELAND’S government outlined a
compromise solution for winding
down troubled Anglo Irish Bank yes-
terday but failed to put either a price
or a timeline on its plan.
Yielding to political pressure,
finance minister Brian Lenihan
ditched Anglo Irish’s own plan to
carve a functioning niche lender out
of what is left of the nationalised
bank when it transfers €36bn (£30bn)
in property loans to Ireland’s state
run bad bank.
Instead, Anglo’s remaining loans
will be housed in an asset recovery
bank, where they will be worked out
over a period of time while its
deposits will be put into a govern-
ment-backed deposit bank which will
not engage in any lending.
The news means Anglo will effec-
tively cease to be a force in the City.
Although the Financial Services
Watchdog said UK depositors’ money
would be regulated as in any other
bank, Anglo will stop new business
lending in the region,
The capital cost of the plan -- the
final bill which investors have been
seeking -- will be known in October
when the central bank announces
the units’ capital requirements.
The prospect of a final price being
put on the cost of bailing out Anglo,
which has saddled Ireland with the
worst budget deficit in the European
Union, gave some relief to Irish debt
lack of detail was disappointing.
“We’re still none the wiser really.
Okay, it tells you the route they’re
going, but I don’t think it gives you
any clarity on the amount of money
it’s going to cost the exchequer which
is what the market is worried about,”
said Alan McQaid, chief economist at
Bloxham Stockbrokers. The spread on
Irish 10-year bonds fell slightly.
– Baker Tilly, BDO, Deloitte, Ernst &
Young, Grant Thornton, KPMG, PKF
and PwC – were asked to appoint non-
executives in January following publi-
cation of the world’s first Audit
Governance Code.
The obligation is designed to
reduce the risk of an auditor collaps-
ing, while also bringing the firms’
governance more into line with the
rules followed by publicly listed com-
panies.
CITYA.M. 9 SEPTEMBER 2010
RBC plans for
growth as hits
City century
▲
BANKING
BY OLIVER SHAH
ROYAL BANK OF CANADA (RBC) is
looking to expand its wealth manage-
ment and investment banking arms
as it celebrates its 100th anniversary
in the City of London.
RBC, Canada’s largest company by
revenue, is hiring bankers to push its
private client business in the Middle
East and Eastern Europe. It also plans
to bolster its investment bank by
bringing in more staff for equity cap-
ital markets, fixed income and cur-
rency trading in Europe and Asia.
Pauline Egan, London head of RBC
Wealth Management, said: “Four
years ago our wealth management
business employed 70 people and
today we have almost 180. What we
think stands out is the strength and
stability of our name. We are a secure
bank and we have come through the
financial crisis in good shape.”
Egan’s comments came as senior
RBC figures raised a glass to a century
in the Square Mile. The institution,
LET’S
LET
T’S TA
TTALK
A
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FOREX / gftuk.com
gftuk.com / free
GFT Global Markets
Markets UK LLtd.
td. is authorised and regulated
News 17
Ex-AIG chief
Sullivan to head
risk at Willis
INSURANCE
▲
FORMER AIG chief executive Martin
Sullivan, who was ousted three
months before the US government
bailed the insurer out, is joining
Willis Group, the London-based insur-
ance broker said yesterday.
founded in Nova Scotia in 1864, Sullivan will head a new unit that
opened its first UK office on Princes will oversee brokerage and risk man-
Street in September 1910 with four agement advisory services for Willis’
employees. The group now has multinational and global accounts.
around 1,400 staff in the City in total. Clockise from top left: John Burbidge, chief He will also be deputy chairman of
RBC, which manages C$240bn exec, Mike Lagopoulos, head of wealth, the company, reporting to chief exec-
(£146.9bn) of client assets globally, has Harry Samuel, head of global treasury and utive Joe Plumeri.
hired 1,100 people around the world Pauline Egan, London head of wealth Sullivan has 40 years of experience
in the past 12 months. in the industry, Willis said in a state-
Despite a tightening regulatory ment. He is best known for his tenure
environment and the impending with American International Group,
annual levy on banks’ balance sheets, which was collapsing as he left the
chief executive John Burbidge used company in 2008. For that, Sullivan is
the opportunity to affirm the organi- linked to AIG’s role in the financial
sation’s enthusiasm for the UK. He crisis.
said: “RBC remains committed to The insurance giant wound up get-
London and to growing our franchise ting a pledge of up to $182bn (£117bn)
across Europe and Asia, where we see from US taxpayers to address prob-
significant opportunities.” lems at its financial products divi-
sion. Sullivan, during testimony in
FAST FACTS | ROYAL BANK OF CANADA June before the Financial Crisis
Inquiry Commission, said AIG had
● The lender began as the Merchants Bank, already been in crisis before he took
financing the fishing and timber industries of the helm in 2005. But he did defend
Halifax, Nova Scotia, in the 1860s. its risk management practices.
● Between 1995 and 2001, then-boss John After Sullivan’s departure, AIG
Cleghorn turned RBC into a multi-services bank. switched chief executives three times
in a little over a year.
Join Allister Heath, editor of City AM as he welcomes Boris Schlossberg,
Director of Currency Research at GFT for an ‘all-things-forex’ seminar.
Thursday, 23 September | 8:00 am – 10:00 am | The Grange Hotel, St Paul’s Register online
at gftuk.com/cityam
c yam
gftuk.com//cit
During
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 Education
18 CITYA.M. 9 SEPTEMBER 2010

| MBA

British MBAs look

to broaden their
horizons overseas
Studying abroad is a 60 per cent of students are from North
America. True, there are often dozens of
Making new contacts
is good for business.
fantastic way to build other nationalities and most MBAs involve
studying abroad, but in a globalised world Picture: GETTY
a network of contacts the immersing yourself in another busi-
ness culture is increasingly important.
all over the world. More are doing so. The numbers of
Europeans applying to the China Europe
By Jeremy Hazlehurst International Business School is up 6,400
per cent in 10 years. Overseas schools are
keen for British students, too. LIKE most British people I kind of felt I had

M
ANY British people choosing to
take an MBA stay in this country,
or head to one of the big
American schools. There is no
doubt that they are prestigious, but in a
world that is increasingly tilting to the
East, might there be better ways to spend
your money? At most British business
schools around 10 per cent of the cohort
are British nationals, going up to 40 per
cent at some. On the big US MBAs, about
Peter Rafferty, Director of International
business development at Vlerick Leuven
Gent Management School in Belgium says:
“Many of our international students end
up working in London. Without an estab-
lished British alumni and student network
it would be difficult for us to give students
an understanding of the British business
culture.”
We asked four British MBAs who studied
abroad about their experiences.
spent a lot of time in British institutions,
at school, at university. I was very UK-
focused. I attended open days at Wharton
and Harvard and having seen them I
thought that they were really US-centric,
so I started looking at European business
schools and IESE jumped out at me. There
is no dominant culture – INSEAD tends to
CHRIS DANIELS have lots of Brits and French people and
the American schools a lot of Americans,
IESE, SPAIN unsurprisingly. And I really liked the idea

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CITYA.M. 9 SEPTEMBER 2010
THE BOOKER 19
DISSECTED
WE TAKE A LOOK
AT THE SHORTLIST

enjoyed living and working in Asia and at Fontainebleau campus.

LIZZIE GOODBURN
INSEAD, SINGAPORE AND PARIS
I GRADUATED from Bristol University in
2001 and moved to London to complete a
law conversion course and also to row – I
made it into the British Olympic team that
went to Athens in 2004. In 2005 I joined
Clifford Chance and spent six months
training in the Hong Kong office. I really
the end of 2007 I took a two-year second-
ment to the Singapore office. In 2008,
however, I decided that I wanted a more
business-focused career that combined my
sports background and legal skills and
started looking into different MBA pro-
grammes in Europe, the US and Asia as a
means to move out of purely legal roles.
I thought about doing an MBA in the US,
but wanted a more globally representative
MBA education. With 70 nationalities in
my class, INSEAD’s focus on diversity really
stood out. My husband was out in
Singapore too, so going off to the US for a
two-year course was not an option. INSEAD
has a campus in Singapore and it was only
a 10 month programme, plus I got to
spend four months in France too, at the
Lots of the people in my class were keen
on staying in Asia. Studying at the INSEAD
campus in Singapore gives students a
head-start in terms of understanding ways
of doing business in Asia and in terms of
connecting new graduates with alumni
already established in the region. The
alumni network is really important at
INSEAD. Indeed it helped me get my first
job after graduation, working with the
International Olympic Committee on the
first edition of the Youth Olympic Games,
which have just been held in Singapore.
I am now moving to France to work for
a sports consultancy company. In the
future, I’d love to continue to work in the
Olympic industry, be it at a host city, at a
sponsor or at the IOC in Switzerland.

of getting the southern European busi-
ness culture and language, too – I spoke a
bit of French, but not a word of Spanish.
At IESE, you do a month of intensive class-
es at the start, plus an hour-and-a-half a
day afterwards. At the end of a year I was
pretty much fluent, but it was hard work.
To go from no language to complete fluen-
cy is a difficult task, especially when you
are also doing the rest of the MBA at the
same time. I’ve used it off and on – I’d say
it has been a useful thing to have in my
back pocket. I had less fear of working in
other cultures and countries, I ended up
covering lots more around Europe, France
and a bit of Spain, and it’s useful to have
the Spanish – Spain is a hard place to do
meetings in English. Knowing the lan-
guage and culture definitely opens up
avenues for you. I’m now running the
business side of Lloyds’ London 2012
Olympics sponsorship. I can’t help think-
ing that given the next Olympics is in Rio
and Portuguese is not so different from
Spanish, there may be even more interest-
ing possibilities to come.

ly ranked. At any business school you are

PHILIP BUCHAN
NANYANG BUSINESS SCHOOL, SINGAPORE
I HAD been working as an engineer for
five years and I was increasingly develop-
ing an interest in the running of busi-
nesses. I noticed that a lot of our work
was starting to be influenced by develop-
ments in Asia – projects were happening
there, technical equipment was being
manufactured there, and engineers were
being recruited from there.
I’d been in Asia for a year doing volun-
teer teaching and travelling, so I had a
strong interest in the region anyway, and
when I started looking into it I saw that
some of the Asian schools were very high-
going to learn similar concepts and tech-
niques so it’s about adding value to that –
I thought I could get more if I went to
Asia. Part of it is cultural awareness.
For example, a lot of the MBAs work
in teams and it was really beneficial to
work with people from different cultur-
al backgrounds. Europeans are quite
direct and forceful when they give opin-
ions, but people from other cultures are
sometimes not like that, and you have to
be sensitive to the ways they communi-
cate.
That’s a valuable thing to learn first-
hand. But the best thing is that I have got
a massive database of contacts in
Singapore, India, China – basically in
every country in Asia I know people who
are in big companies and important posi-
tions. I’m now working for Cyberhawk
Innovations, an inspection company in
Livingston, Scotland, and when we
decide to move into the Asian market,
then that will help us set up offices and
win work. It’s given me a real head-start.

Melbourne is one of the top schools in

JASON CHEUI
MELBOURNE BUSINESS SCHOOL
AFTER studying Veterinary Science at
Bristol followed by a Masters at London
Zoo, I worked in practice for three years,
before moving into veterinary nutraceu-
ticals. However, the financial crisis hit
and I ended up doing the job of four peo-
ple. It was time for a change.
I applied for a working holiday visa for
Australia at the end of 2008, intending to
only stay for a year, but I fell in love with
the country and decided to apply for the
MBA at Melbourne Business School. My
plan is to eventually found a veterinary
not-for-profit, and to do this, I needed to
learn how to run a business.
Asia-Pacific and my cohort consisted of
55 people from 20 countries, many from
Asia, including countries such as China,
India and Nepal – similar to Melbourne
The Oxford Executive MBA
University as a whole, with a large pro-
portion of Asian undergraduate students.
I spent a semester on exchange in New
York, a fantastic experience, but some-
where I would not have been able to
A 21-month part-time modular Please register online at
attend outright due to the substantial programme designed to help senior www.sbs.oxford.edu/emba
fees. Similarly, fees at London Business professionals realise their potential
School are approximately twice as For further information about the
much – MBS is excellent value for money. whilst delivering international general Oxford Executive MBA,
Will I come home? That depends on management competence to their please contact Emeline Tissot at
what happens job-wise. Australia has
been relatively unscathed by the finan-
organisations. emeline.tissot@sbs.ox.ac.uk or on
cial crisis, and there are many English Learn about the programme and meet 0845 190 0019
people out here. It’s not too far a step
away from life in England – in a sense it’s the Executive MBA Director and
the same lifestyle, but it is more relaxed alumni at our next exclusive dinner:
and the pace of life is much slower.
Speaking to consultants here, they say • LONDON - 30 September 2010
that it is not as prestigious as in the US or
UK – but you do get to leave at 5.30 and
go surfing.
 20 Education | MBA CITYA.M. 9 SEPTEMBER 2010

GMAT matters, but

it’s not the only way
to show a business
school your talents
Experience and achievement can override a low score on
the gold-standard MBA test, writes Jeremy Hazlehurst

F
OR those wanting to take an MBA,
sitting the GMAT is something of a
rite of passage. The test – whose full
name is the Graduate Management
Admission Test – has been the gold stan-
dard for MBA students since it was
launched in 1953. Now it is to undergo its
biggest change yet when it adds an “inte-
grated reasoning” element. The new sec-
tion, which will be introduced in June
2012, is meant to “test advanced reasoning
skills” using spreadsheets and graphics.
The changes are designed to reflect the
modern business environment, or at least
one part of it, but it raises a question: what
is the GMAT for? And how important is it?
Candidates can get fixated on the test, but
is it really that important?
Matt Symonds, founder of the QS MBA
tour, which organises MBA fairs, says that
people can “over-focus” on the test. “GMAT
is an early filter especially in big schools
with lots of volume, but a high score does-
n’t mean that you are automatically in the
door.” Those who are preparing to take the
test should not look at the highest scores
of MBAs at their target school, or even the
average score, but the average of what 80
per cent of people are scoring, he says. As
long as you score inside the bottom of
that, and have a 2.1 from a good universi-
ty and “a pattern of achievement in your
Testing times.
Picture: GETTY
professional life” that should satisfy the
school about your academic chops. “They
are looking at the whole package,” he says,
“GMAT just reassures them about your
mathematical ability”.
Some schools are starting to move away
from the GMAT and the other big MBA
test, the GRE. Katie Best, director of MBA
programmes at BPP business school, says
that although BPP does accept the GMAT,
or GRE, it is not the be-all-and end-all. A
candidate with a first or a good 2.1 needn’t
take any test at all. What is important is
demonstrating a history of career success
and performing strongly at interview.
Best says that BPP prefers candidates to
take its own test, which is focused on busi-
ness news: “We like students to be up to

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 Education | MBA 21

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date with current affairs, the sort of peo-
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ters like that, and ought to have been
monitoring the news.”
There has been a tradition that the
MBA is a financial qualification, she adds,
and that is important but the modern
MBA “is about being a general manager
and a good, broad knowledge of business
is important. Number-crunching is not
necessarily the only skill that you need for
that. The GMAT has a use but it is quite
stressful for a student. We see the MBA as
a learning journey and to start it with
something that is so focused on this is the
wrong way to start it. It’s not a grown-up
approach.”
The GMAT is important; it tests numer-
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Can we imagine a world beyond the
GMAT? Matt Symonds says that in the late
1980s Harvard decided to drop it, saying
that it didn’t capture the leadership skills
that they were looking for, opting to use
interview alone. Interestingly, the lowest
GMAT score for a student currently on the
Harvard MBA is 490, suggesting that the
school still takes the test with a healthy London Business School, INSEAD, ESMT European School of
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So why has the GMAT survived at all? Management and d Technology
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Clearly it is useful in some situations and University, Hult International Business School,
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ter of 260,000 people taking the test every
year, at a cost of $250 each, and the mas-
sive industry of test preparation DVDs,
websites, private tutoring and books that

opening your mind, discovering new ways
of doing things, and embracing entrepre-
GMAT SAMPLES | TESTING TIMES
Sample Analysis of an Argument question
"People often complain that products are not
made to last. They feel that making products
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complaint about products that do not last or
the response to it? Explain your position, using
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Sample problem solving question:
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(A) I only (B) II only (C) III only
(D) I and II (E) II and III
(Answer: E)

INTEGRATED REASONING

Q. WHAT IS THE CHANGE? sheets, extrapolate from

statistics and “generate
Q&A
A. From June 2012 the GMAT will
include a 30-minute “integrated rea-
soning” section. The GMAT will still be
solutions” rather than
choosing answers.

three-and-a-half hours long, and the new

section replaces one of the two essays in
the Analytical Writing Assessment –
there will now be just one essay. The
Verbal and Quantitative sections remain
unchanged
Q. WHY HAVE THEY CHANGED THE
TEST?
A. The scores from the two writing
tests tended to be very similar – and
so it was decided that one was enough to
evaluate the student’s analytical and
writing skills. The time is better used
testing a kind of reasoning that is

Q. WHAT DOES THE NEW SECTION

INVOLVE?
increasingly important in modern busi-
ness.

A. The new test will require students to

“assimilate and integrate informa-
tion from multiple sources to solve com-
plex problems; accurately interpret
visual and tabular data representations;
and determine or estimate probability
and statistics.” In short, use spread-
Q. HOW WILL THE NEW SECTION BE
SCORED?
A. This hasn’t yet been decided, but
the overall score will still be on the
same scale – a single number of between
200 and 800.
 22 Education | MBA CITYA.M. 9 SEPTEMBER 2010

The MBA takes you

from the battlefield
to the boardroom
For ex-military personnel, business school is an ever
more popular route into the City, says Jeremy Hazlehurst

N
EXT month the government will
announce a comprehensive spend-
ing review in which thousands of
military personnel are expected to
lose their jobs. Some estimates say that
16,000 will find themselves on civvie
street. Many high-fliers will no doubt be
attracted by the City, and the City is sure
to be interested in disciplined, talented
people who are cool under pressure. But
how can military experience be translated
into something that the City wants, needs
or can understand?
One route for military personnel who
want to make themselves attractive to the
City is an MBA. These days, ex-forces peo-
ple are a small but constant presence on
MBA courses and in their search for a
diverse cohort, MBA course directors are
keen to include military or ex-military
personnel on courses. This is especially
true at Cranfield School of Management.
It is allied to the military’s Shrivenham A soldier’s skills are
campus – where officer training is held – always transferable.
and there is a good understanding of the
value of military experience; at any one Picture: GETTY
time, up to 20 people on the executive
MBA are in the military. Cranfield also
offers an MBA specifically for those want-
ing to transition into the defence industry.
Elsewhere, at London Business School
nine of the 320 people on the current full-
time MBA have a military background,
while there is a similar proportion at Cass
and Harvard. £7,500 a year; London Business School has programme alongside bankers and con-
The numbers may be small, but schools a £20,000 a year scholarship. We are way sultants – perhaps better. Those who have
value the military experience and are behind the US, though, where schemes reached the higher echelons of the mili-
keen to get former army, navy and RAF such as the Yellow Ribbon programme tary are well-used to a classroom environ-
people signed up and a number of schools organise for fees to be paid for army ment – indeed, the officer training
offer bursaries or discounts to ex-military leavers who get onto MBA courses. courses that they take as part of rising to a
officers. Henley School of Management If you are imagining people in dirty senior level in the army probably means
offers a discount of 10-15 per cent for peo- boots and camouflage tramping about that they have spent more time in formal
ple in the forces, Manchester Business campus, think again. The modern mili- educational settings than many others
School has scholarships of £15,000 and tary man or woman fits right into an MBA who are 10 or 12 years out of university.

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CITYA.M. 9 SEPTEMBER 2010 Education | MBA 23

An MBA is a great way to “funnel the

Learning is part of the job.
Mike Keighley is the MBA Programme
Director at Henley School of Management,
and a former army officer who served in
Bosnia, Kosovo and Iraq before working for
asset manager Northern Trust after leav-
ing the forces. He says that ex-officers are
a catch for City firms: “Military training
gives you a well-rounded approach to lead-
ership and management skills, and finan-
cial awareness. You are used to working in
a multinational environment, and work-
ing with fragmented teams. The elements
of pressure and resourcing can be a lot
tighter in the army, and it is all about
information and knowledge that people
have gained in the army into a qualifica-
CASE STUDIES
tion”. He says that many of those leaving
the army are over 30 and will want to
move into leadership positions. An MBA
proves that you have those skills. People
who have risen to the rank of colonel or
general are clearly capable, but they
need a way to talk to the City in lan-
guage it understands. The MBA teaches SIMON TIDD MARK LINDSAY
them how.
In the past, ex-military people who have SIMON TIDD went to Warwick University to read phi- AFTER 12 years in the Parachute Regiment and then
moved into the City often wound up in losophy straight after school, but dropped out after a other regiments – ending with four years in Northern
private banking and other areas where year and decided to join the army, something that had Ireland as Battalion Operations Officer on counter-ter-
trust and relationship building are key. always interested him. He joined the 2nd Royal Tank rorism operations, Mark Lindsay felt it was time for a
These days, though, the military experi- Regiment, seeing two tours of Iraq and two tours of change. He briefly worked for Prudential’s Private
ence is far wider, and so are the jobs open Afghanistan. He was Military Assistant to the Financial Planning Services before being contracted by
to them. Lyle Andrews, EMEA Head of Commander in Basra, and led the Air Transport Liaison ArmorGroup as a Security Advisor to the board of BP
Graduate Recruiting at investment bank Team in Helmand Province. in Colombia, and worked in various South American
UBS, says: “A lot of them have relevant By March of 2009, seeing that there were no jobs companies. He took an MBA at Henley in 1999.
technical skills, such as people with an IT immediately above his rank that appealed, he made the He says he didn’t feel too daunted by the course.
background or experience in operational decision to leave. Given the state of the economy, he “These days in the army you do so much training, even
management. But in addition there are a decided that an MBA was the best move, and soon junior officer training is quite intellectual – it’s not
lot of the soft skills – for example commu- found himself back at Warwick. about bayoneting sandbags. Also a lot of the language
nications and negotiation. Plus they tend “I’m comfortable in a learning environment, but inter- that is used in business is quite military, a lot of the
to be disciplined and to get things done.”
acting with the cohort is a bit more challenging, you concepts, especially in strategy. On the implementation
SALES FORCE meet people who come from all over – only six of the 70 side my military training was helpful too. In the mili-
He says that many have flourished in sales: are from the UK and everybody has their own way of tary everything is a project, everything is process based
“They have no product knowledge at first, doing things,” he says. “In the army you learn about man and I was able to lead my team in implementation. A
but they know how to present an idea and management, project management, resource allocation, lot of the project management technique, all of it had a
talk to people in a way that helps them and often you are operating at the most extreme level. military basis, I was able to think in an organised way
make a decision.” Other areas where they That’s the experience I bring to the course. Also my gen- and to implement it in a military way.”
have done well are project management, eral communication skills and leadership.” After his MBA Lindsay worked for Pfizer’s anti coun-
business analysis, and the change manage- “In terms of what you get out of it, the main thing is terfeiting operation in the Baltics. He is now Head of
ment side of HR. In general, in a crisis it that you are able to describe the experience and skills Security for the National Bank of Oman and founder of
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 Investment
24
Volatility can
add to an ETF’s
tracking error
Divergent returns
can be caused by
more than fund fees,
writes Jessica Mead
G
IVEN that investors’ prime reason
for buying exchange-traded funds
(ETF) is to gain exposure to indices,
in an ideal world the performance
of an ETF ought to reflect movements in
the benchmark index as closely as possible.
Unfortunately, ETFs do suffer from track-
Bubble, toil and trouble as
investors pour into bonds
Excessive double dip fears have
driven treasury note yields to
historic lows, writes Juliet Samuel
W
ITH government bond yields
dropping through the floor, ana-
lysts fear that over-egged double
dip fears have inflated a bond
bubble. A quarter of year-to-date inflows
into exchange-traded funds (ETF) have gone
Europe’s largest
ETF Securities gold
– World’s exchange
largest
Exchangecommodities
traded Traded Currency platform
• ETFS Physical Gold (PHAU) – AUM $5.2bn*
• ETFS Gold Bullion Securities (GBS) – AUM $5bn*
*AUM figures as at 29th June 2010
| Listed Products
ing error, which is defined as a divergence
between the performance of the underly-
ing index and the ETF that tracks it.
Normally – although not always – this mis-
tracking causes an ETF to underperform its
benchmark index. Research by Deutsche
Bank shows that European ETFs had an
average tracking error of 0.3 per cent (30
basis points) in the second quarter of 2010.
The main reason for the disparity
between the performance of the underly-
ing index and the ETF is cost. Even if the Diverging tracks can
ETF tracks perfectly, it will always under- have some undesirable
perform the benchmark by the fees that effects
are deducted from the fund’s returns. Picture: GETTY
While important, an ETF’s fees are readily
available and can easily be accounted for.
into bond funds, so ETF investors should
keep a sharp eye on the debate.
Bubble alarmists highlight the pace with
which investment has rushed into
advanced economy treasuries. Research by
iShares shows that money is flowing into
European bond ETFs at a growing pace,
with 35 per cent of the last month’s new
net assets going towards fixed income.
Beyond that, investors should consider
the historically low level of treasury yields
here and in the US. One-to-three-year note
yields in the States are now well under 1
CITYA.M. 9 SEPTEMBER 2010
The other causes of tracking error are less ing errors were higher for all types of ETFs
easily identifiable but can amplify the in 2008 than in 2009 and 2010. (See chart.)
underperformance. The Deutsche Bank There are three factors that can con-
research showed that ETFs that track more tribute to elevated volatility in physically
volatile benchmarks have experienced a replicated ETFs, which translates into high-
higher tracking error – for example, track- er tracking error.
per cent and in just the past month, yields
on 30-year US treasuries shrunk from 4 per
cent to 3.72 per cent and 10-year note yields
declined from 3 per cent to 2.65 per cent.
“The bond market tends to be quite glacial,
so these are pretty big moves,” says Charles
Schwab’s Kully Samra.
Technical analysts are therefore con-
vinced that something will have to force hood of rate rise soon will also increase,
yields upwards before too long. The most which would severely damage bond values
likely candidate, according to RBS, is a and burst the bubble. Interest rate rises
reduction in fears of another global down- erode the value of existing bonds because
turn and deflation. If this occurs, the likeli- they make it more profitable to buy new
• Brought by the management team who invented Gold ETFs/ETCs
•
•
100% LBMA ‘Good Delivery’1 investment grade bars
Traded and settled as a share through your stock broker or bank2
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Multiple market makers and traded in USD, EUR and GBP on
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• Physical delivery available
• Part of the ‘Exchange Traded Gold’ stable a World Gold Council initiative
For more information T: +44 (0) 20 7448 4330
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The advertisement is issued by ETF Securities Marketing LLP (“ETFSM”) and is intended for and directed towards
persons who are considered professional investors (as defined in the UK Financial Services and Markets Act or its
equivalent under applicable law or regulation in the relevant jurisdiction) and have professional experience in investing.
It has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 (“the Act”)
by Flow Traders B.V.PHAU is issued by ETFS Metals Securities Ltd (MSL). GBS is issued by Gold Bullion Securities
Ltd (GBS). MSL and GBS are each regulated by the Jersey Financial Services Commission. The United Kingdom
Listing Authority (UKLA) is the ‘home regulator’ for purposes of listing and passporting the prospectus under the
Prospectus Directive.
The products in this advertisement may or may not be suitable for a particular investor.
You should obtain your own independent financial, taxation and legal advice before making
any decisions about any investment. Investment in the products discussed carry with it
certain risks, including those set out in the relevant prospectus, which can be obtained from
the ETFSM at +44 (0)20 7448 4330 or info@etfsecurities.com. All codes listed above are
for the London Stock Exchange.
1 ‘Good Delivery’ as defined by the LBMA in relation to the standard of gold bars.
Please see prospectus for more information.
2 Brokerage fees may apply.
CITYA.M. 9 SEPTEMBER 2010
First, if a benchmark contains illiquid
constituents – this is often the case with
emerging market indices – then
attempted replication can generate mis-
tracking by selling securities to redeem
ETF units. Second, Christos
Costandinides, ETF strategist at
Deutsche Bank, says that ETFs are typi-
cally denominated in a single currency.
Hence, optimising a physical portfolio of
a benchmark whose constituents are
denominated in different currencies
also requires managing a currency bas-
ket. This currency hedge needs to be con-
tinuously optimised and this exercise
may often give rise to tracking error and
costs, he warns.
Third, it can be very difficult for ETF
providers to physically replicate indices
that have hundreds of constituents.
Therefore, statistical portfolio sampling
techniques attempt to optimise replica-
tion by holding a fraction of an ETF
benchmark’s total constituents. The
magnitude of mistracking will depend
on the number of constituents held and
market events, which are often more
pronounced when an ETF has multi-
country constituents.
Investors need to be careful if their
ETFs’ benchmarks display any or all of
these characteristics. If so, then the ETF
might not mirror the underlying index’s
performance precisely and you are liable
to suffer from greater tracking error
before you even take the fees into
account.
All bubbles will
burst in the end
Picture: GETTY
bonds (which have a higher yield) than to
buy existing, low-yielding bonds.
But bond-enthusiasts insist that the
current economic uncertainty justifies
buying treasuries. Evolution Securities’
Gary Jenkins says: “At the moment, peo-
ple would rather sleep well at night than
take on too much risk.” Moreover, bond
investors only lose money due to a rate
rise if they intend to sell before matura-
tion. If not, the worst scenario will simply
be to forego a potentially higher return,
which, for pessimists on economic
growth, is a chance worth taking.
Even so, any investor in need of a
decent return over the next decade
should ditch her bonds before next year’s
likely rate increase. When rates do
change, they could jump up quickly.
LISTED PRODUCT NEWS
DONATA HUGGINS
WORLD’S FIRST EURO HIGH YIELD BOND ETF
BlackRock’s exchange-traded funds (ETF)
platform iShares has launched the world’s
first Euro High Yield Bond ETF. The fund
tracks the performance of the Markit iBoxx
Euro Liquid Corporates Index. The index uses
multiple pricing sources for inclusion and is
based on an average of the classifications
allocated to each debt instrument by the
major ratings agencies. It addresses liquidity
concerns by offering exposure to nearly 100
of the most liquid sub-investment grade cor-
porate bonds. Two-thirds of the bonds are
BB-rated and 5 per cent are CCC-rated.
MAKING MILLIONS 25
FROM POTATOES
WILL CHASE SHARES
HIS STORY TOMORROW
ANALYSIS l Average ETF tracking error for developed market (DM) A new dawn for BP
and emerging market (EM) ETFs
160 157
160 Picture: REUTERS
Source: Deutsche Bank
140 2008
120 2009
109
Basis points
2010
100
80
57 55
60
30
40 30 31 26
18 14
20 13 11 7 9
0
All DM EM DM EM
benchmarks- benchmarks- benchmarks- benchmarks-
Physical Physical Synthetics Synthetic
THE
TIPSTER
FITCH UPGRADE GIVES
BP A NEEDED BOOST
B
ELEAGUERED oil and gas giant BP,
which yesterday published a report
into the Macondo oil well disaster,
received a boost after ratings agency
Fitch upgraded it to A status. Will the
upgrade offer sufficient impetus for the
global energy firm to break its August high
of 438p? WorldSpreads offers a spread of
414.4-415.4p.
Weakness in the euro has allowed ster-
ling to recoup some of its recent losses
and to climb back towards and even
beyond the £0.83 level. Further weakness
for the single currency could well follow,
to the benefit of sterling. Capital CFDs
offers a spread of £0.8215-£0.8217 for
euro-sterling.
Renewed uncertainty in the banking
sector and fears of a darkening economic
outlook is continuing to push traders into
the safe haven play that is gold. However
we’re closing in on the June 2010 all-time
highs of $1,271 per ounce, which could
trigger some profit taking. The current IG
Index price is $1,255.22-$1,255.72.
Pub chain JD Wetherspoon is expected
to break the £1bn sales barrier when it
reports tomorrow despite warnings of
subdued customer expenditure since the
end of the World Cup and poor weather
lowering visitor numbers. Changing open-
ing times to catch the morning coffee
crowd has helped boost Wetherspoons’
performance. Will the results help the
share price continue to rise after it hit
year-lows of 378.70p in July?
ShortsandLongs.com offers clients a
rolling spread of 437.90p-439.70p.
Consumers may have cut their spending
in certain areas during the downturn but
fashion label Ted Baker seems to have
proved resilient to any belt tightening. Its
share price rose from 400p a year ago to
highs of 571p in April. The stock has risen
to around the 550p level a number of
times since, so positive results on Friday
could mean another test of that resistance
level. Spreadex has a rolling spread of
536.1p-550.9p.
Jessica Mead
ETF SECURITIES’ ETCS EXCEED $1BN HSBC’S NEW PACIFIC EX JAPAN ETF HSBC changes the
ETF Securities’ short and leveraged HSBC has launched a new ETF pinned to the Asian ETF landscape.
exchange-traded commodities (ETC) have MSCI Pacific ex Japan Index. The index
exceeded $1bn in assets under management measures the performance of the largest Picture: GETTY
(AUM) as of 1 September 2010 – a 26 per companies in Australia, Hong Kong,
cent increase since the start of the year. The Singapore and New Zealand. This fund is
leveraged products have the greatest AUMs: launched following HSBC’s MSCI Brazil ETF
ETFS Leveraged Natural Gas and ETFS earlier this year, giving HSBC a total of 10
Leveraged Crude Oil represent 27 per cent ETFs in its range. The fund is listed on the
and 19 per cent. These figures are followed London Stock Exchange, but further
closely by short ETFs: for example, ETFS European cross-listings and registration are
Short Crude Oil corresponds to 10 per cent expected later in the year. The total expense
and ETFS Short Copper to 7 per cent of the ratio is a competitive 0.40 per cent and it will
total AUM in ETF Securities’ ETC portfolio. be a physical replication of the index.
 26 Markets & Investment CITYA.M. 9 SEPTEMBER 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 . . . . . . . . . . . . . . . . . . . . . . . .271.90 +5.00 312.00 246.90 Cookson . . . . . . . . . . . . . . . . . . .449.10 –3.50 616.00 347.60 Jardine Lloyd Thompson. . . . . . .567.50* +6.50 604.50 420.70 Sage . . . . . . . . . . . . . . . . . . . . . .253.20 +3.90 260.50 208.20
3i Infrastructure . . . . . . . . . . . . . 114.70 –0.30 115.00 95.55 Croda Intl . . . . . . . . . . . . . . . . .1342.00* –2.00 1381.00 637.00 Johnson Matthey . . . . . . . . . . .1714.00 +20.00 1814.00 1302.00 Sainsbury(J) . . . . . . . . . . . . . . . .376.00 +6.30 376.80 307.60
A.B. Foods . . . . . . . . . . . . . . . .1077.00 +7.00 1096.00 790.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .485.50 +2.60 539.00 381.00 JPMorgan Emerg Mkts . . . . . . . .551.00 — 558.50 416.00 Schroders . . . . . . . . . . . . . . . . .1385.00* +4.00 1450.00 1053.00
Aberdeen Asset Man . . . . . . . . . .138.10 +1.20 155.60 111.00 Dana Petroleum . . . . . . . . . . . .1809.00 +1.00 1817.00 968.50 Kazakhmys . . . . . . . . . . . . . . . .1277.00 +31.00 1634.00 955.00 Schroders N/V. . . . . . . . . . . . . . 1130.00* +7.00 1187.00 864.00
Admiral. . . . . . . . . . . . . . . . . . .1620.00 +49.00 1628.00 1003.00 Davis Service . . . . . . . . . . . . . . .387.40 +4.80 442.30 356.00 Kesa Electricals . . . . . . . . . . . . .136.20 +3.20 162.00 98.45 Scot. & Sthrn Energy. . . . . . . . . 1178.00* +17.00 1206.00 357.50
Aegis . . . . . . . . . . . . . . . . . . . . . 117.00 +2.50 137.30 103.10 De La Rue . . . . . . . . . . . . . . . . . .668.50 –12.50 1021.00 638.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .214.90 +1.00 255.00 196.50
Afren . . . . . . . . . . . . . . . . . . . . .102.00 –1.90 111.00 68.00 Debenhams . . . . . . . . . . . . . . . . .62.70 +0.85 90.00 51.95 Ladbrokes . . . . . . . . . . . . . . . . .138.20* +0.70 174.29 114.60 Scottish Mortgage. . . . . . . . . . . .603.00 +1.50 623.50 462.50
African Barr Gold . . . . . . . . . . . .609.00* +10.00 685.00 520.50 Derwent London . . . . . . . . . . . .1462.00 +26.00 1490.00 1150.00 Lancashire Hldgs . . . . . . . . . . . .540.00* — 545.00 416.70 SEGRO . . . . . . . . . . . . . . . . . . . .263.80 –2.90 403.10 244.00
Aggreko . . . . . . . . . . . . . . . . . .1499.00 +14.00 1639.00 659.50 Dexion Absolute . . . . . . . . . . . . .141.30 +0.50 148.00 124.20 Land Securities . . . . . . . . . . . . . .648.50 +7.00 743.50 543.00 Serco . . . . . . . . . . . . . . . . . . . . .607.50* –0.50 656.50 469.10
Alliance Trust . . . . . . . . . . . . . . .323.60 +1.10 352.70 292.80 Diageo . . . . . . . . . . . . . . . . . . .1085.00 –20.00 1176.00 930.50 Legal & General . . . . . . . . . . . . . .94.60* +0.60 97.00 69.05 Severn Trent . . . . . . . . . . . . . . .1378.00 +13.00 1382.00 939.50
AMEC . . . . . . . . . . . . . . . . . . . . .921.50 +3.00 958.50 724.50 Dimension Data . . . . . . . . . . . . . 119.50 +0.20 125.50 57.50 Lloyds Banking Gp . . . . . . . . . . . .72.32 –0.19 77.61 45.30 Shaftesbury . . . . . . . . . . . . . . . .427.00 –1.20 434.00 341.70
Amlin . . . . . . . . . . . . . . . . . . . . .419.00 +1.70 437.60 350.80 Domino’s Pizza . . . . . . . . . . . . . .464.20 –1.40 469.10 252.70 Logica . . . . . . . . . . . . . . . . . . . . 114.80 +1.10 149.10 100.80 Shire. . . . . . . . . . . . . . . . . . . . .1451.00 — 1526.00 999.00
Anglo American . . . . . . . . . . . .2499.00* +38.50 3015.50 1846.50 Drax . . . . . . . . . . . . . . . . . . . . . .413.60 +10.20 496.50 321.50 London Stk Exchange . . . . . . . . .687.00 +5.50 949.50 540.50 Smith & Nephew . . . . . . . . . . . . .537.50 –4.50 700.50 525.50
Antofagasta . . . . . . . . . . . . . . . 1109.00 +33.00 1114.00 699.50 DSG Intl . . . . . . . . . . . . . . . . . . . .24.94 +0.20 39.75 23.11 Lonmin . . . . . . . . . . . . . . . . . . .1612.00 +26.00 2198.00 1344.00 Smith(Ds) . . . . . . . . . . . . . . . . . .148.10* +0.40 150.20 84.00
Aquarius Platinum . . . . . . . . . . .307.50* +5.60 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .389.60 –2.10 438.40 265.60 Man . . . . . . . . . . . . . . . . . . . . . .229.80 +4.10 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . .1206.00 +12.00 1242.00 814.00
ARM Holdings . . . . . . . . . . . . . . .387.70* +21.40 389.10 129.10 Easyjet . . . . . . . . . . . . . . . . . . . .381.30 +3.20 499.90 329.20 Marks & Spencer. . . . . . . . . . . . .359.90 +5.80 412.70 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .459.50 +6.90 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .304.70 +3.30 311.20 215.00 Edinburgh Inv Tst . . . . . . . . . . . .417.00 –0.60 422.50 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .279.40* +4.80 331.00 216.30 Spectris . . . . . . . . . . . . . . . . . . .968.00 +5.00 975.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3333.50* –6.00 3376.00 2668.00 Electrocomponents . . . . . . . . . . .221.90 +1.50 245.00 142.90 Melrose . . . . . . . . . . . . . . . . . . .258.70 –8.30 272.80 160.00
Atkins(Ws) . . . . . . . . . . . . . . . . .698.00* +3.50 801.00 532.50 EnQuest . . . . . . . . . . . . . . . . . . .121.00 +4.80 125.90 87.35 Mercantile IT . . . . . . . . . . . . . . . .960.50 –3.00 1002.00 822.50 Spirax-Sarco Eng . . . . . . . . . . .1646.00 +9.00 1657.00 983.50
Autonomy Corp . . . . . . . . . . . .1735.00 +22.00 2012.00 1278.00 Essar Energy . . . . . . . . . . . . . . .436.00 +2.90 475.90 358.50 Michael Page Intl. . . . . . . . . . . . .419.60 –6.20 461.50 309.90 Spirent Comms . . . . . . . . . . . . . .133.80* +1.80 135.90 82.95
Aveva . . . . . . . . . . . . . . . . . . . .1480.00 +35.00 1487.00 856.50 Eurasian Nat Res . . . . . . . . . . . .859.50* +3.50 1276.00 781.00 Micro Focus . . . . . . . . . . . . . . . .353.00* +18.50 550.00 272.20 Sports Direct Intl . . . . . . . . . . . . .120.90 +3.90 134.00 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .391.00 +0.40 474.00 290.20 Euromoney Inst Inv . . . . . . . . . . .590.00 +0.50 630.00 260.00 Millen & Copthorne . . . . . . . . . . .514.00* +5.50 527.50 321.40 SSL Intl . . . . . . . . . . . . . . . . . . . 1156.00 –1.00 1190.00 567.00
Babcock International . . . . . . . . .534.00 +4.00 660.50 489.00 Experian . . . . . . . . . . . . . . . . . . .654.00 +5.00 664.50 489.00 Misys . . . . . . . . . . . . . . . . . . . . .284.50 +1.50 288.80 177.10 St James’s Place . . . . . . . . . . . . .260.70* +2.20 296.90 203.40
BAE Systems . . . . . . . . . . . . . . .323.30 +0.10 389.90 288.10 F&C Comm Prop . . . . . . . . . . . . . .91.40* –0.10 96.80 79.50 Mitchells & Butlers . . . . . . . . . . .304.20 +0.80 343.90 228.30 Stagecoach. . . . . . . . . . . . . . . . .185.00 –0.50 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .244.20 –0.10 328.85 228.60 Ferrexpo . . . . . . . . . . . . . . . . . . .301.80* –2.80 396.20 138.00 MITIE . . . . . . . . . . . . . . . . . . . . .200.20 –1.70 281.70 187.80 Standard Chartered . . . . . . . . . .1870.00* +15.50 1927.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .308.00* –6.00 394.25 253.40 FirstGroup . . . . . . . . . . . . . . . . .355.50 –5.00 448.80 331.20 Mondi . . . . . . . . . . . . . . . . . . . . .488.90* +0.90 503.00 290.70 Standard Life . . . . . . . . . . . . . . . 211.70* +1.00 237.00 170.00
Barratt Development . . . . . . . . . . .99.85 –4.45 193.31 89.10 Foreign & Col Inv Tst. . . . . . . . . .282.20* +1.30 297.20 236.80 Monks Inv Tst . . . . . . . . . . . . . . . 311.00 –0.10 321.20 253.10 SuperGrp . . . . . . . . . . . . . . . . .1020.00 +37.50 1100.00 499.00
BBA Aviation . . . . . . . . . . . . . . .186.00* — 220.00 145.90 Forth Ports . . . . . . . . . . . . . . . .1342.00 +26.00 1425.00 1020.00 Morrison Wm . . . . . . . . . . . . . . .292.50 +1.50 306.30 255.00 TalkTalk . . . . . . . . . . . . . . . . . . .127.30 –0.50 147.10 106.60
Bellway. . . . . . . . . . . . . . . . . . . .550.00 +0.50 927.50 510.00 Fresnillo . . . . . . . . . . . . . . . . . . 1120.00* +20.00 1139.00 647.00 Murray Intl Tst . . . . . . . . . . . . . . .882.00 –2.00 893.50 679.50 Talvivaara Mining . . . . . . . . . . . .430.30 +13.30 501.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .837.00 –1.00 960.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .254.90 –0.10 285.70 217.70 National Express. . . . . . . . . . . . .240.10 +1.50 258.60 155.86 Tate & Lyle . . . . . . . . . . . . . . . . .462.90 +12.10 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . .1076.00* +10.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .487.00 –3.00 496.80 370.00 National Grid . . . . . . . . . . . . . . .548.00 +3.50 607.65 474.80
BHP Billiton . . . . . . . . . . . . . . .1890.00 –2.50 2346.00 1583.50 GKN . . . . . . . . . . . . . . . . . . . . . .148.80* +1.10 155.00 100.40 Next . . . . . . . . . . . . . . . . . . . . .2039.00 +6.00 2360.00 1657.00 Taylor Wimpey . . . . . . . . . . . . . . .28.08 –0.52 51.80 24.29
BlackRock Mining . . . . . . . . . . . .592.00 +3.00 654.50 460.00 GlaxoSmithKline . . . . . . . . . . . .1266.00* +6.00 1347.00 1088.00 Northumbrian Water . . . . . . . . . .349.70* +6.50 352.20 225.20 Telecity . . . . . . . . . . . . . . . . . . . .490.00 +7.00 512.00 311.30
Bluecrest Allblue GBP . . . . . . . . .167.80 +0.20 169.00 138.30 Great Portland Estates . . . . . . . .326.00 +1.30 333.60 236.60 Old Mutual . . . . . . . . . . . . . . . . .134.70 +0.70 138.50 90.90 Templeton Emrg Mkts . . . . . . . . .567.00 –1.00 598.00 418.30
Booker . . . . . . . . . . . . . . . . . . . . .45.00 — 49.50 36.00 Greene King . . . . . . . . . . . . . . . .423.00* –2.50 504.00 372.50 Pace . . . . . . . . . . . . . . . . . . . . . .205.50 +1.60 243.80 145.00 Tesco . . . . . . . . . . . . . . . . . . . . .414.75 +4.30 454.90 368.40
BP . . . . . . . . . . . . . . . . . . . . . . .412.15 +5.35 658.20 296.00 Halfords . . . . . . . . . . . . . . . . . . .499.80 –1.20 562.50 324.00 Partygaming . . . . . . . . . . . . . . . .288.30 +15.70 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .187.90 –4.40 277.20 172.30
Brit Insurance . . . . . . . . . . . . . . .956.00 –0.50 1017.00 709.00 Halma . . . . . . . . . . . . . . . . . . . . .282.50 — 298.70 198.00 Pearson . . . . . . . . . . . . . . . . . . .997.00* +12.00 1069.00 733.00 Tomkins . . . . . . . . . . . . . . . . . . .323.20 +0.10 325.70 155.00
British Airways . . . . . . . . . . . . . .227.70 +0.70 255.80 172.40 Hammerson . . . . . . . . . . . . . . . .382.60* +8.40 460.30 332.20 Pennon . . . . . . . . . . . . . . . . . . . .604.50* +7.50 613.00 440.40 Travis Perkins . . . . . . . . . . . . . . .802.00 +3.00 915.00 647.50
British Amer. Tob . . . . . . . . . . .2319.00* +9.00 2335.50 1832.00 Hargreaves Lansdown . . . . . . . .387.70 +1.70 408.40 259.40 Persimmon . . . . . . . . . . . . . . . . .389.20 –7.50 534.50 335.90 TUI Travel . . . . . . . . . . . . . . . . . .220.10* +1.90 313.90 189.20
British Empire Tst . . . . . . . . . . . .448.00 +2.50 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . .102.80 +4.65 119.00 82.50 Petrofac . . . . . . . . . . . . . . . . . .1388.00 –17.00 1446.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .383.00 +4.30 436.20 261.20
British Land . . . . . . . . . . . . . . . .484.00 +9.20 531.00 416.00 Henderson . . . . . . . . . . . . . . . . .131.00* –1.40 157.80 112.10 Petropavlovsk . . . . . . . . . . . . . . 1115.00 +14.00 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1240.00 +12.00 1375.00 979.50
Britvic. . . . . . . . . . . . . . . . . . . . .482.90 +13.60 518.00 324.80 Heritage Oil. . . . . . . . . . . . . . . . .327.40 –0.50 585.00 298.20 Premier Farnell . . . . . . . . . . . . . .239.60 +0.90 252.60 140.60 UK Commercial Prop. . . . . . . . . . .81.65 +0.40 84.90 69.10
Brown(N.) . . . . . . . . . . . . . . . . . .233.80 +2.30 284.30 204.80 Hikma Pharma . . . . . . . . . . . . . .800.00 — 813.00 440.00 Premier Oil . . . . . . . . . . . . . . . .1585.00 +12.00 1634.00 984.00 Ultra Electronics . . . . . . . . . . . .1719.00* –3.00 1761.00 1198.00
BSkyB . . . . . . . . . . . . . . . . . . . .710.50 +2.00 732.00 521.00 Hiscox . . . . . . . . . . . . . . . . . . . .359.20* –3.20 371.10 299.60 Provident Financial . . . . . . . . . . .859.00 +12.50 986.00 795.00
BT . . . . . . . . . . . . . . . . . . . . . . .141.60 +3.00 151.00 108.40 Hochschild Mining . . . . . . . . . . .375.10* +15.10 377.20 220.00 Prudential . . . . . . . . . . . . . . . . . .584.50* –4.00 665.00 475.70 Unilever . . . . . . . . . . . . . . . . . .1752.00* +9.00 2024.00 1610.00
Bunzl . . . . . . . . . . . . . . . . . . . . .747.50 +1.50 784.50 582.50 Home Retail . . . . . . . . . . . . . . . .221.40 –1.10 336.50 208.50 PZ Cussons . . . . . . . . . . . . . . . .326.60* –4.20 373.20 213.30 United Utilities . . . . . . . . . . . . . .598.00 +3.50 620.00 429.00
Burberry . . . . . . . . . . . . . . . . . . .871.50 –2.50 891.50 457.70 Homeserve . . . . . . . . . . . . . . . . .476.50 –0.30 491.10 435.40 Qinetiq . . . . . . . . . . . . . . . . . . . . 115.00 –0.50 179.10 103.50 Utd Business Media . . . . . . . . . .570.50* +0.50 587.50 408.30
Cable & Wire Comms . . . . . . . . . .60.00 +2.05 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .654.80* –7.60 766.80 595.20 Randgold Resources. . . . . . . . .6100.00 +20.00 6600.00 3930.00 Vedanta Resources . . . . . . . . . .1972.00 –8.00 2967.00 1795.00
Cable & Wire Wwide . . . . . . . . . . .70.90 +0.80 94.80 60.05 Hunting . . . . . . . . . . . . . . . . . . .627.50 +7.50 659.50 429.10 Reckitt Benckiser . . . . . . . . . . .3376.00* +16.00 3667.00 2887.00 Victrex . . . . . . . . . . . . . . . . . . . 1157.00 +8.00 1320.00 726.50
Cairn Energy. . . . . . . . . . . . . . . .450.00 +1.00 497.60 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .434.10 +14.70 478.30 291.70 Reed Elsevier . . . . . . . . . . . . . . .538.00 — 566.00 452.40 Vodafone . . . . . . . . . . . . . . . . . .159.80 –0.10 160.35 126.50
Caledonia Invs . . . . . . . . . . . . .1612.00 +32.00 1759.00 1496.00 IG . . . . . . . . . . . . . . . . . . . . . . . .500.50 –3.50 532.00 291.00 Regus . . . . . . . . . . . . . . . . . . . . . .72.95 –0.90 125.50 64.05 Weir . . . . . . . . . . . . . . . . . . . . .1333.00 +14.00 1335.00 631.00
Capita . . . . . . . . . . . . . . . . . . . . .734.00* +2.00 829.50 685.50 Imagination Tech Gp . . . . . . . . . .340.50 –42.10 385.00 154.00 Renishaw . . . . . . . . . . . . . . . . . .877.00 +12.00 915.50 479.00 WH Smith . . . . . . . . . . . . . . . . . .429.50 –2.40 551.00 392.20
Capital & Counties . . . . . . . . . . .128.60 –0.20 129.30 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .718.00 –21.00 786.00 410.00 Rentokil Initial . . . . . . . . . . . . . . .102.80 +0.60 140.20 91.15 Whitbread . . . . . . . . . . . . . . . . .1509.00 +8.00 1645.00 1141.00
Capital Shopping Centres . . . . . .351.30 +1.90 580.00 300.10 Imperial Tobacco. . . . . . . . . . . .1878.00 +13.00 2159.00 1709.00 Resolution . . . . . . . . . . . . . . . . .247.00 –4.30 264.80 220.10 William Hill . . . . . . . . . . . . . . . . .177.30 +0.80 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .310.50 –0.40 361.90 263.90 Inchcape. . . . . . . . . . . . . . . . . . .283.30 +2.60 347.00 235.00 Rexam . . . . . . . . . . . . . . . . . . . .308.30 –5.20 348.80 253.40 Witan Inv Tst . . . . . . . . . . . . . . . .448.00* –0.90 487.00 392.30
Carnival . . . . . . . . . . . . . . . . . .2277.00* –11.00 2937.00 1876.00 Informa . . . . . . . . . . . . . . . . . . . .400.90* –1.30 439.40 263.30 Rightmove . . . . . . . . . . . . . . . . .692.50 +1.00 729.00 456.90
Catlin . . . . . . . . . . . . . . . . . . . . .353.50* +4.80 394.60 303.20 Inmarsat . . . . . . . . . . . . . . . . . . .712.00 +22.50 831.00 526.00 Rio Tinto . . . . . . . . . . . . . . . . . .3470.50* +23.00 4104.00 2435.00 Wolseley . . . . . . . . . . . . . . . . . .1356.00 +3.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .179.80 +0.10 182.90 92.00 Intercontl Hotels . . . . . . . . . . . .1082.00* +17.00 1244.00 762.50 RIT Capital Partners . . . . . . . . . 1134.00 –15.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .379.90* +1.80 411.70 279.60
Centrica . . . . . . . . . . . . . . . . . . .338.00 +6.90 339.70 236.30 Intermediate Capital . . . . . . . . . .279.30 –0.50 332.00 233.50 Rolls Royce . . . . . . . . . . . . . . . .569.00 –1.00 631.50 434.50 WPP . . . . . . . . . . . . . . . . . . . . . .686.50 +13.50 744.00 510.50
Charter Intl . . . . . . . . . . . . . . . . .649.00* –9.50 855.50 563.50 Intertek . . . . . . . . . . . . . . . . . . .1715.00 +17.00 1770.00 1136.00 Rotork . . . . . . . . . . . . . . . . . . .1623.00* +8.00 1641.00 970.00 Xstrata . . . . . . . . . . . . . . . . . . . 1102.00 +32.00 1344.50 815.00
Chemring . . . . . . . . . . . . . . . . .2821.00 +29.00 3711.00 2166.00 Intl Personal Fin . . . . . . . . . . . . .260.80 +2.30 283.00 135.30 Royal Bank Of Scot . . . . . . . . . . . .45.83 –0.28 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .672.00 +1.50 806.50 657.00 Intl Power . . . . . . . . . . . . . . . . . .392.40 +5.50 394.80 248.20 Royal Dutch Shell A . . . . . . . . .1814.50* +11.50 2068.50 1621.00
Cobham . . . . . . . . . . . . . . . . . . .223.30 +0.80 278.60 205.50 Invensys . . . . . . . . . . . . . . . . . . .266.90 –2.30 350.30 224.90 Royal Dutch Shell B . . . . . . . . .1764.00* +15.00 1997.50 1550.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . .120.40 — 144.20 107.70 Investec . . . . . . . . . . . . . . . . . . .490.60 –1.10 565.00 411.50 RSA Insurance . . . . . . . . . . . . . .125.90* +0.20 142.00 114.10
Compass . . . . . . . . . . . . . . . . . .542.50 +2.00 574.50 343.20 ITV . . . . . . . . . . . . . . . . . . . . . . . .57.25 +0.20 71.75 41.04 SABMiller . . . . . . . . . . . . . . . . .1926.50 +1.00 2090.00 1436.00 www.interactivedata.com

BP and energy peers propel Wall Street closes

the FTSE while banks drag up on light trading
blame for the Gulf of Mexico rig ing Samsung had selected ARM’s sharply lower in August but that had

THELONDON blast that led to the United States’

worst-ever oil spill on to its contrac-
technology for its new mobile
phone chip over Imagination THENEW YORK little impact on yesterday’s session.
The Dow Jones industrial average

REPORT REPORT
tors Transocean and Halliburton. Technology’s, and with traders rose 46.32 points, or 0.45 per cent, at
Energy and mining stocks helped pointing to re-hashed bid rumours 10,387.01. The Standard & Poor’s 500
power the index higher, rallying surrounding ARM. Index added 7.03 points, or 0.64 per
with commodity prices, although Imagination Technology shares cent, at 1,098.87. The Nasdaq

E
ENERGY stocks led by BP volumes on the FTSE were just 75 were down 11 per cent. Composite Index climbed 19.98

U
pushed Britain’s top shares per cent of its 90-day average. Banks were hampered as worries S stocks rose yesterday as points, or 0.90 per cent, at 2,228.87.
higher yesterday, outpacing Rio Tinto added 0.7 per cent as a over Europe’s recovery persisted. investors latched onto positive On Tuesday, stocks fell in light vol-
falls in banks that were newspaper reported the Anglo- Greece’s austerity-hit economy news out of Europe in the latest ume as investors seized on renewed
weighed down by European recov- Australian miner is in Russia seek- shrank at a faster pace than in a string of low-volume ses- concerns about European banks’
ery concerns. ing a possible stake in potash thought in the second quarter. sions suggesting little confidence in exposure to sovereign debt to sell
The FTSE 100 closed up 21.92 producer Uralkali as competition Ireland extended guarantees for market direction. shares after strong gains last week
points, or 0.4 per cent, at 5,429.74, for the crop nutrient heats up. short-term bank liabilities amid Bank stocks recovered from when the S&P 500 jumped more than
after breaking a seven-session win- Gains on Wall Street also under- fears over the escalating cost of bail- Tuesday’s losses, with JPMorgan up five per cent in three days.
ning streak to close down 0.6 per pinned the UK rally with investors ing out nationalised lender Anglo 2.2 per cent and the BKW bank index This week has been shortened by
cent on Tuesday at 5,407.82. awaiting the release of the US cen- Irish Bank. up 1.7 per cent. A successful the Labour Day holiday on Monday,
Meanwhile the FTSE 250 closed tral bank’s Beige Book – anecdotal Talks on the way banks around Portuguese debt offering as well as while the Rosh Hashanah Jewish new
up 35.44 points, or 0.35 per cent, to reports gathered from its 12 region- the world gird themselves for news that nationalised Irish lender year holiday could mean staffing and
10,216.71, and the FTSE All-Share al banks that could offer insight shocks can be wrapped up at the Anglo Irish would wind down assets trading volume are reduced on
gained 11 points, or 0.4 per cent, to into US economic conditions, due weekend, the head of Germany’s pulled global equity markets higher. Thursday and Friday, providing the
close at 2,801.76. after the London markets closed. Bundesbank Axel Weber said. After last week’s sharp bounce in potential for more volatility.
“The FTSE’s pushing up again to Recent economic data from the Barclays fell 1.9 per cent, also hurt equity markets halted the August sell- US-traded shares of BP rose 3.2 per
the levels it saw four months ago world’s biggest economy has by a downgrade from Bernstein to off, the S&P is nearing the top of its cent at $38.37 after the firm issued an
and it’s a little bit baffling because assuaged fears of a double-dip reces- “market-perform” from “outper- recent trading range. Low volume internal report on the rig explosion
if you look at the US and European sion. form”. suggests investors aren’t entirely con- that led to the worst US oil spill ever
markets they are nowhere near British real estate companies vinced the market can move substan- and the death of 11 crew members.
four-month highs,” said David were in demand after Barclays ANALYSIS l FTSE 5,429.74 tially higher. Transocean gained 1.3 per cent to
Jones, chief market strategist at IG Capital issued a positive sector out- 8 Sep “Overall we’re still locked in a fairly $53.74, while Halliburton added 1.2
5,400
Index. look and mortgage lender Halifax narrow trading range, and that’s con- per cent to $30.21.
5,300
Jones said the FTSE’s heavy posted a surprise uptick in August sistent with the jerky pattern of how Staples was up 2 per cent to $19.04,
weighting towards commodity- house prices. 5,200 the economy here and in developing and Costco Wholesale Corp rose 1 per
linked stocks has helped with “a bit Hammerson rose 2.2 per cent, 5,100 worlds is unfolding,” said Joseph cent to $59.21 after Goldman Sachs
of exaggeration because of the rela- while British Land and Land 5,000 Battipaglia, market strategist at Stifel upgraded their stocks.
tively low volumes but London Securities added 1.9 and 1.1 per Nicolaus in Yardley, Pennsylvania. About 6.55bn shares traded on the
4,900
seems to be particularly resilient at cent respectively. The Fed’s Beige Book compilation New York Stock Exchange, the
the moment”. ARM Holdings climbed 5.8 per 4,800 of anecdotal reports confirmed the American Stock Exchange and
BP rose 1.3 per cent after a compa- cent to a near eight-year high after 4,700 economy had begun to slow over the Nasdaq , far below last year’s estimat-
14 Jun 2 Jul 22 Jul 11 Aug 1 Sep
ny report shifted much of the RBS repeated its “buy” rating, say- summer, a fact that had sent stocks ed daily average of 9.65bn.
 Lifestyle
Decanting: how
to breathe life
into your wine
Letting your wine sit before you drink it
makes all the difference, says Zoe Strimpel
T
HE main thing about decanters is
that they look nice – and make you
look like you know about wine. At
least, that’s what I thought until
the folks from Riedel turned up at the City
A.M. offices to demonstrate the worth of
their wares. Twenty minutes after they
entered bearing fine glassware, I had seen
the light. Decanters make the wine you’re
going to drink taste much, much better.
There are two reasons to decant wine,
says Matt Knight, Riedel’s business man-
ager. The first is to remove the sediment
in old wines. The second is to oxidate
younger wines. Once oxidated, wines
open up. It’s as simple as that.
“Unlike wine glasses, all decanters do
the same thing,” says Knight. Before him
is a selection of sumptuous glassware;
much of it intended to look like a
woman’s curves from behind. (More dirty-
minded individuals have noted a differ-
ent anatomical similarity). As long as they
are open at the top, oxygen will get in.
However, the longer the neck, the more
the wine gets oxidised on the way in as
well.
What you may not know is that all
wines should be decanted – including
white, champagne, and cheap and cheer-
ful wines too. “In fact, those bottles worth
£3.99 need it most to pick them up,” says
Knight. Older wines need much less time
– around 10 minutes – as they’ll have oxi-
dated in the bottle and you risk killing
them by over-decanting them. Younger
wines, though (say, one to eight years old)
can benefit from an all-day soak. “If
you’ve got a younger, full-bodied wine,
decant the bottle when you leave home in
Roast New Season Grouse
Justerini & Brooks Red Burgundy
Game dish of
the year
Restaurant
Magazine 2008
27
| Food & Drink
the morning and when you come back
it’ll be ready,” he says. Most wines will
benefit hugely from a 20-minute chance
to breathe.
Eve, Riedel
In other words, love your decanter, £375, riedel.co.uk
whether it is a humble machine-blown
jug or a piece of hand-blown finery. There
is, however, one exception to the rule that Wine carafe, Divertimenti Dartington Masters Bump Carafe,
shape doesn’t matter. The decanter we £21.50, divertimenti.co.uk John Lewis, £55, johnlewis.com
tried was Riedel’s Eve (pictured right): it
has a swan-like neck and two chambers
that look like a tail wrapping around
itself. In order to push the wine into the
neck to pour out, you have to swish it in a
circle to move it into the right chamber.
When you add in the mile-long neck the
wine has to get up and down, you’ve got a
triple decanting action.
While Knight had been talking to us,
the wine – a lovely 2006 Pomerol (red
Bordeaux) had been sitting in the Eve,
occasionally being swirled by one of us.
We poured the decanted wine into a glass,
and the wine straight from the bottle into
another one. Immediately an astonishing
difference was noticeable: the one poured Swirl decanter, Riedel 1lt decanter, Divertimenti
from the decanter had a gorgeous multi- £30, riedel.co.uk £77.50, divertimenti.co.uk
layered heady aroma. It had literally been
opened up. The bottled wine smelled pos-
itively tinny and squashed next to it. wax lyrical about the pine-cone and hazel- your tableware, or for wine aficionados.
But the beauty of the decanted nut nuance of this wine and the thistle- They’re for anyone who prefers to drink
Bordeaux was even more obvious on the cheese-leather undertone of that one. wine at its best.
tongue. It was endlessly deep, its blackber- Blindfold them and it turns out it isn’t all As Knight puts it: “Decanters are about
ries and figs ringing in the mouth, the quite so clear without the label handy. getting your money’s worth from the
tannins perfectly mellowed by the time it But when we scrambled these two glasses wine.” It doesn’t hurt that they’ve become
hit the back of your throat. Not so for the around – and we did so with glee – it was design pieces, so you’re buying a piece of
other glass. It was fine, but seemed dull always instantly obvious which glass con- chic table art at the same time. Here we’ve
and a bit acidic next to the decanted tained the wine that had been allowed to chosen two of our favourite Riedel
wine. breathe, even for just 20 minutes. decanters alongside three other function-
Blind tastings are notorious. People can Decanters aren’t just posh additions to al and attractive receptacles.
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
 28 Lifestyle | Books CITYA.M. 9 SEPTEMBER 2010

Know your fiction: the

Booker shortlist assessed LIFE
COACH

IN A STRANGE ROOM THE AUTHORS AND THE ODDS Odds from www.williamhill.com How to make
BY DAMON GALGUT
Atlantic, £15.99
Best for: travellers
the most of a
DAMON Galgut’s semi-autobiographical
novel follows a man, named Damon, on
three different journeys – through Greece,
game shoot
through Africa and through India. I’ve been invited on a game shoot, but I’ve
Although he encounters and connects never been before and don’t know what to
with different people on each trip, and expect. What do I need to know?
himself fulfils different roles in relation to Damon Galgut Emma Donnaghue Andrea Levy

them – the tales are respectively called
“The Follower”, “The Lover”, and “The
Guardian” – this is a book as much about
isolation and solitude as it is about travel
and experience. Nevertheless, Galgut’s
evocation of place can be mesmerising, as
can his ability to flit between third person
and first person, often in the same sen-
tence. Not necessarily a warm book, but a
mysteriously tender one. Timothy Barber
ROOM
EMMA DONOGHUE
Picador, £12.99
Best for: fans of a good drama
IRISH-born Emma Donaghue’s Room was
inspired by the 2008 case of Josef Fritzl, in
which an Austrian man was found to have
kept his daughter locked up in a home-
dungeon for years, forcing her to breed
with him. Here, a young woman is abduct-
ed at 19 and locked in a garden shed.
Apart from being raped every now and
again, she’s left alone with enough food
and a TV. She gives birth to a son, and the
book is his child’s-eye view. This is a pro-
found tale of captivity, familial bonds and,
finally, relief. Donaghue’s best-known
bestseller, also based on a real event, was
2000’s Slammerkin. Zoe Strimpel
THE LONG SONG
BY ANDREA LEVY
Headline Review, £18.99
Best for: readers who want to be
uplifted
FOLLOWING up her massively successful
2004 novel Small Island, Levy turns her
attention from the Jamaican immigrant
experience in the Fifties to the slavery
experience over a century before. The
book is in the form of a memoir, told by a
former slave girl, July, as she looks back on
the final years of slavery and the early
days of the era following its abolition. It’s a
subject matter loaded with misery and
darkness, but Levy brings a lightness of
touch to a story that is frequently very
funny and enchanting. A beautiful read
from a masterful writer. TB
5-1
Howard Jacobson
8/1
THE FINKLER QUESTION
BY HOWARD JACOBSON
Bloomsbury, £18.99
Best for: urban thinkers and cultural
speculators
HOWARD Jacobson is often called the
British Phillip Roth. He is Jewish, and
Judaism – in all its many shapes and
sizes – is the central theme in much of his
work. He is deeply funny, with a brilliant
ability to turn observation into story. And
he is complex in his fusion of the two: the
Jewish experience is, after all, sometimes
very funny (and there is much to observe).
Here, he explores the relationship
between Julian Treslove, a BBC employee
and gentile, and the two Jews Finkler and
Libor who are also his best friends. They
are always tussling over their differing
Jewish identities (much involving views
on Israel) – and Treslove wants to be a Jew.
ZS
PARROT AND OLIVIER IN
AMERICA
BY PETER CAREY
Faber, £18.99
Best for: historians
AUSTRALIAN novelist Carey could become
the first writer to win the Booker three
times if he is victorious with his 11th novel
(his previous wins were in 1988 with Oscar
A
3/1 7/1 S many people in the City will attest,
going on a shoot is a terrific social occa-
sion. There’s nothing like spending a day
standing in fields blowing fowl out of the
sky, stopping only for the odd bacon sandwich
and nip of whisky from the hip flask, to get the
good cheer flowing.
Nevertheless, blowing birds out of the sky
isn’t the easiest thing, so it’s worth getting in
some practice first. If you’ve never held a gun
before, try heading to a shooting school and
taking aim at some clay pigeons for an after-
noon or two to get your eye in and learn the
feel of a shotgun. There are plenty of good
schools around London, including the West
Peter Carey Tom McCarthy London Shooting School (www.shoot-
5/1 2/1 ingschool.co.uk) and Bisley Shooting School
(www.bisleyshooting.co.uk).
On the day, unless you’re lucky enough to be
and Lucinda, and 2001 with True History of staying the night at the estate, you’ll generally
the Kelly Gang). His latest is set in 1830 and turn up around 9am for a spot of breakfast
tells the story of Olivier de Garmont, a before heading out on the shoot. Those taking
young French aristo who winds up in part in the shoot are known as “guns”, and a
America with Parrot, his servant and pro- party of around eight people is normal.
tector. Carey weaves his ingenious narrative If you don’t have your own gun the estate
around this pair, looking at the relation- will provide one, and may bestow on you a
ship between man and servant, New World loader – traditionally someone to load sir’s guns
and Old World, told in his typically lyrical between shots, but in this case to help you out
style. TB as required and prevent you from mistakenly
picking off a beater or one of your fellow guns.
You’ll draw for “pegs”, which is your position
C in the line for shooting, marked by a numbered
BY TOM MCCARTHY peg in the ground. In a day’s pheasant shooting
Cape, £16.99 you’ll normally manage five sessions – known
as drives – per day, moving from woodland to
Best for: intellectuals and thinkers woodland for each. The guns in the middle of
with a soft side the line get the most birds over them, so you
move up a couple of places for each drive,
TOM McCarthy’s attempt at the top prize is meaning that everyone has the chance to be in
being hailed as his best work yet: ambi- the best position at some point during the day.
tious, complex and extremely imaginative. On a pheasant shoot – the season starts
Set between 1898 and 1922, it charts the life next month – a team of beaters will drive the
of Serge Carrefax, from his birth in pre-war pheasant out of their woodland habitat
Europe to his technology-loving adulthood, towards the guns. When they see the guns the
via German prison camps and the pyra- birds tend to climb higher to avoid them,
mids of Egypt. The book opens at a day unluckily making themselves better targets.
school for the deaf, run by Serge’s deaf Once they’re down , pickers-up with dogs will
mother and his father, an inventor. collect them. Don’t worry if you don’t hit
Communication is the key theme here, many – this isn’t a competitive sport, and
hinted in the title’s big letter C, referring to scores for individual guns aren’t kept.
the sign language of Serge’s filial relations At the end of the day you’ll be given a brace
and to the early radios he loves. – two birds – to take home with you (the rest
Phenomenal. ZS are sold), provided you observe an important
tradition: always thank the gamekeeper.
The winner of this year’s Man Booker Prize will With thanks to Glynn Evans of the British
be announced on October 12. For more info see Association of Shooting and Conservation
www.themanbookerprize.com www.basc.org.uk

OUT OF OFFICE
TIMOTHY BARBER
Left, the photos of EADWEARD MUYBRIDGE AT THE TATE
Eadweard Muybridge Tate Britain is playing host to an exhibition of
are at Tate Britain. photographs by one of the medium’s true pio-
neers. Muybridge’s images of bodies in
motion – including horses galloping (proving
for the first time that they had all four legs in
the air at one point in its running stride) and
wrestlers – were the technological front line
in the Victorian era. This exhibition demon-
strates the full scope of his groundbreaking
vision. Until 16 Jan 2011. Tickets £10 from
www.tate.org.uk
A DISAPPEARING NUMBER REAPPEARS
Director/playwright Simon McBurney and
his theatre group Complicite first presented
this meditation on life, mathematics and
the Indian diaspora in 2007. The
show is returning for a brief
run at the Novello theatre
under McBurney’s direc-
tion. Until 25 Sept,
Novello Theatre, WC2.
www.ambassador-
stickets.com
TEA WITH AGATHA CHRISTIE
To mark the Agatha Christie’s 120th
anniversary, Brown’s Hotel – which
inspired her work – is serving Christie-
inspired Afternoon Tea, including a copy
of her autobiography. On Sept 19,
author John Curran gives an illustrat-
ed talk about her life and work.
Brown’s Hotel, Albemarle
Street, W1S 4BP.
www.roccoforte-
collection.com
CITYA.M. 9 SEPTEMBER 2010 Lifestyle | TV& Games 29

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
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EastEnders; BBC News
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Following the fortunes of the
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7pm Sky Sports News at
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World 8pm The Rugby Club
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Club 12am Live NFL 4.30am
Ringside 5.30am-6am Premier
League World
SKY SPORTS 2
4pm Live US Open Tennis. The
men’s quarter-finals. 10pm ATP
Tour Uncovered 10.30pm
Premier League World 11pm
Cricket 12am Live US Open
Tennis. Further coverage of the
men’s quarter-finals. 4am-5am
The Rugby Club
SKY SPORTS 3
7pm Race World 8pm Live
PGA Tour Golf 11pm European
Tour Golf 12.30am Ringside
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7pm Top Gear 8pm Glamour
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Edinburgh Comedy Fest Live
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4.45am-5.15am Him and Her
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Does That Work? Answer conducted a perilous search for evidence.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
29 11 6 23 3 23
8 9
11 14 35  
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 9 17 16
27
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 15 8 12
    
above or to the left of it. 7 15 10
You can only use the digits 1-9 42 
    and you must not use the
34 22
10 11     
same digit twice in a block. 30
  The same digit may occur 36 
13 19
   more than once in a row or
column, but it must be in a
13
20
7 4
 
15 16 12
  separate block.
5 13 10
45
      6 24
 

  ACROSS DOWN
1 More secure (5) 1 Woollen item worn
  
  WORDWHEEL W E
3 Enchant (5)
6 Line up (5)
about the neck (5)
2 Rub out (5)
Using only the letters in the Wordwheel, you have 7 Cardinal number (3) 3 Assert one’s right to (7)
    ten minutes to find as many words as possible,
R A 4 Subsequently (5)
8 Container for keeping
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters D papers in order (4)
9 Exemption (7)
5 Extracted from
the earth (5)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
D O 12 Fishing implement (3) 8 Cunning animals (5)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
N G 14 Bladed chopping tool (3) 10 Disencumber (3)
15 Append (3) 11 Most deficient in light
QUICK CROSSWORD 2 1 1 3 9 4 7 or brightness (7)
1 3 7 4 5 8 2 6 9 SUDOKU         
17 Brought to a humbler
13 Be indebted to (3)
$ = 7 ( & 6 & $ / 3
3 9 8 4 1 2 3         
condition (7)
1 8 2 ( (
* % 6 3 $ 1 , 6 + 9 5 8 6 9
         20 Enquires (4) 15 Garret (5)
2 4 5 1 6 3 8 9
/ ( $ 6 7 2 ,
        
21 Prepare leather (3) 16 Move to music (5)
( $ 8 ' , 7 2 4 6 2 9 7 7 5
        
5 ( $ / 0
1 $ ( 6
6 $
2 3
8 1 $
5
1 3
7 9
3 7 4
5 1
1
2
5 2
WORDWHEEL          22 Noxious gases (5) 18 Commonly
encountered (5)
* 5 / + $ 6 $
1 2 3 6 7 9 8 The nine-letter word          23 Large box with a lid (5)
0 , / , 7 , $ / %
2 5 4 9 1 7 3 8 6          19 Workstations (5)
1 ( 7 7 /
was JOCKEYING          24 Gusts (5)
) ( ( ' 6 ( / 2 3 ( 3 1 8 2 1 5 1
 Sport
30 CITYA.M. 9 SEPTEMBER 2010

Results
CRICKET
LV COUNTY CHAMPIONSHIP - DIVISION ONE:
Essex v Durham (Chelmsford); Essex 268 (J C Mickleburgh
72) and 103-1 (34.0 overs) v Durham 177 (B W Harmison 66,
Houllier back
at the helm
C J C Wright 5-70, A P Palladino 4-57). Hampshire v Kent
(Canterbury); Hampshire 204 (J H K Adams 84, C M
Bandara 4-42) and 16-0 (12.0 overs) v Kent 182(J A
Tomlinson 4-59). Nottinghamshire v Yorkshire (Trent
Bridge); Nottinghamshire 59 (O J Hannon-Dalby 4-18, A
Shahzad 4-21) and 357-6 (87.0 overs) (M A Wagh 90, P J
Franks 79, A C Voges 72). v Yorkshire 264 (A W Gale 151no,

as Villa chief
A R Adams 6-82). Lancashire v Somerset (Taunton);
Lancashire 259 (S Chanderpaul 56, C M Willoughby 4-60) v
Somerset 350-8 (91.4 overs) (C Kieswetter 84, P D Trego 51,
G Keedy 5-81). LV COUNTY CHAMPIONSHIP - DIVISION
TWO: Leicestershire v Gloucestershire (Grace Road);
Leicestershire 295 (T J New 63, J Lewis 4-42) and 147-1
(45.0 overs) v Gloucestershire 159 (H J H Marshall 61).
Worcestershire v Middlesex (Lord’s); Worcestershire 313 (M
M Ali 66, T S Roland-Jones 4-51) v Middlesex 244-5 (68.3
overs) (S A Newman 78). Surrey v Glamorgan (Brit of fans. This is a tremendous chal-
▲

Insurance Oval); Surrey 380 (R J Hamilton-Brown 96, J J FOOTBALL

Roy 69, C P Schofield 63, D A Cosker 4-48) v Glamorgan72-2
(21.1 overs). Northamptonshire v Sussex (Hove);
Northamptonshire 125 (Yasir Arafat 4-43) and 48-2 (14.4
overs) v Sussex 381 (C D Nash 169, M A Thornely 89, J A
Brooks 4-88).
MINOR COUNTIES CHAMPIONSHIP FINAL: Dorset v
Lincolnshire (Bournemouth); Dorset 245 (G R Treagus 80no,
B W Houston 5-52, A R K Onyon 4-96) and 262 (E G
Denham 71) v Lincolnshire 254 (V Atri 118, M T C Walker 4-
96) and 118 (J P J Leach 6-21). Dorset beat Lincolnshire by
135 runs.
TENNIS
US OPEN (Flushing Meadows, New York), Women’s Singles
Quarter-final: (7) V Zvonareva (Rus) bt (31) K Kanepi (Est) 6-
3 7-5. Men’s Doubles Semi-final: (1) B Bryan (USA) & M
Bryan (USA) bt (12) M Granollers-Pujol (Spa) & T Robredo
(Spa) 6-1 6-4, (16) R Bopanna (Ind) & A-Ul-Haq Qureshi
(Pak) bt E Schwank (Arg) & H Zeballos (Arg) 7-6 (7-5) 6-4.
Women’s Doubles Quarter-final: (7) Y Chan (Tpe) & J Zheng
(Chn) bt (15) B Mattek-Sands (USA) & M Shaughnessy
(USA) 6-4 6-4, (2) L Huber (USA) & N Petrova (Rus) bt (5) L
Raymond (USA) & R Stubbs (Aus) 6-4 3-6 7-5.
TODAY’S DIARY
CRICKET
LV County Championship - Division One—day 3 of 4:
Nottinghamshire v Yorkshire (Trent Bridge). Essex v Durham
(Chelmsford). Kent v Hampshire (Canterbury). Somerset v
Lancashire (Taunton). LV County Championship - Division
Two—day 3 of 4: Surrey v Glamorgan (Brit Insurance Oval).
Middlesex v Worcestershire (Lord’s). Sussex v
Northamptonshire (Hove). Leicestershire v Gloucestershire
(Grace Road).
GOLF
USPGA Tour: BMW Championship (Cog Hill G&CC, Lemont,
Illinois, United States).
Ladies European Tour: Open de France FÈminin (Paris
International Golf Club,18 Route du Golf, Baillet-en-France,
France).
European Tour: KLM Open (Hilversumsche GC, Hilversum,
BY JON COUCH
GERARD HOULLIER was last night
confirmed as the new manager of
Aston Villa after agreeing a three-year
deal.
The former Liverpool boss was suc-
ceed Martin O’Neill, who resigned
just five days into the start of the new
season following a bust-up with
owner Randy Lerner.
In six years at Anfield, Houllier, 63,
won the Uefa Cup, the FA Cup, two
League Cups and a European Super
Cup before leaving in 2004.
Since then, he had led Lyon to back-
to-back French League titles before
going on to work as technical director
for the French Football Federation.
“I am very happy and proud to join
this great and historic club,” Houllier
said last night. “It was a very difficult
decision for me to leave the FFF, but I
could not turn down the opportunity
to manage a club whose approach,
both on and off the pitch, I have long
admired.
“Aston Villa is one of England’s
biggest clubs and has an amazing set
I’m off after Euro 2012, says Capello
▲
lenge and one I am very much look-
ing forward to taking on.”
Villa’s chief executive Paul
Faulkner added: “Two of the key qual-
ities we identified as being of crucial
importance were experience of man-
aging in the Premier League and a
strategy for building on the existing
strengths in our current squad.
Gerard Houllier comfortably satisfies
these criteria.
“In fact, he stands out as a football
man who understands the ethos of
our club and shares our core values.
“We look forward to working with
Gerard and supporting him. We ask
our supporters to get behind the new
manager and the team as we look to
build on the progress we have made
over the past four years in all areas of
the club.”
Houllier, who is due to meet the
Villa players and front the media
later today, is also set to unveil Patrice Houllier is back
Bergues as his new No2. in the Premier
Bergues worked as Houllier’s No2 at League after six
years. Picture:
Liverpool until 2001 and got the nod
ACTION IMAGES
after Phil Thompson turned down the
role to continue his media work.
ing victories for Euro 2012, but the 64- my life as a pensioner.” prompted the Football Association to

The Netherlands). FOOTBALL

SNOOKER BY JON COUCH
Roewe Shanghai Masters (China). FABIO CAPELLO stunned English foot-
RUGBY LEAGUE ball late last night by announcing he
will quit as England coach after the
The Co-operative Championship Play Offs Qualifying Semi
Final (7.30):: Featherstone v Halifax.
2012 European Championships.
The Italian coach signed a new
TENNIS extension to his £6m contract just
US Open (Flushing Meadows, New York, USA). before the World Cup, only to then
lead England to a dismal campaign.
SPORTS EDITOR JON COUCH Capello has redeemed himself
email sport@cityam.com somewhat with back-to-back qualify-
year-old dropped the bombshell by
announcing these major champi-
onships in Ukraine and Poland will
be his last in charge.
Asked whether he would be
leaving after Euro 2012, Capello
replied: “Absolutely. Yes,” before
repeated his answer again.
“We have to qualify first
of course but after
that I will be too
old. I want to enjoy
Capello signed an initial
two-and-a-half year contract
to take charge of the Three
Lions back in January 2008
and became an instant hit
with the fans with his no-
nonsense approach which cul-
minated in nine victories
from ten World Cup quali-
fying matches.
Pressure from
Inter Milan
offer Capello an extension in June
just prior to the summer showpiece
in South Africa, but many saw that as
a mistake when England crashed out
4-1 to Germany in the last 16.
Victories against Bulgaria and
Switzerland have put England well
on the way to qualifying for Euro
2012, but it seems the hunt has now
already begun to groom Capello’s suc-
cessor for the start of the World Cup
2014 campaign.

It’s all over for Essex as Team orders rule under review
rivals battle for survival
COUNTY CRICKET Leaders Nottinghamshire hit back
as Ferrari escape further rap
▲

against Yorkshire at Trent Bridge after

ESSEX’S inevitable relegation to the
second tier of county cricket was con-
firmed yesterday as Hampshire and
Kent slogged it out in their battle to
beat the drop.
James Tomlinson’s 4-59 helped
bowl Kent out for just 182, giving
them enough bonus points to rele-
gate the Eagles no matter how they
fare against Durham at Chelmsford.
Victory for Hampshire will ensure
their survival, leaving Kent to sweat
on their final match of the season at
Yorkshire next week.
being bowled out for 59 in the first
innings. They reduced the Tykes from
195-4 to 264 before rallying to 357-6 in
their second innings – a lead of 152.
Mark Wagh top scored with 90.
Another side definitely playing
division one cricket next season is
Sussex, who secured immediate pro-
motion back to the top-flight after
clinching the required seven bonus
points against Northamptonshire.
Chris Nash’s 169 helped them to
381 and the three extra batting points
needed to edge out Worcestershire.
FORMULA 1
2010
BY JON COUCH
FORMULA ONE’S ban on team orders
is to be reviewed at the end of the sea-
son after motor racing chiefs decided
not to impose further sanctions on
Ferrari for breaching regulations at
the German Grand Prix.
The Italian team were fined
$100,000 (£65,100) for appearing to
use a coded message to inform Felipe
Massa to allow team-mate Fernando
Alonso pass and win at Hockenheim.
Members of the World Motor Sport
Council met in Paris to discuss the
matter yesterday but, on further
analysis, will now ask F1’s Sporting
Working Group to look into the rule.
A full explanation of the decision
will be released by the FIA later today.
The sport’s governing body, mean-
while, have also announced they are
to extend the F1 schedule to 20 races
next season with the Indian Grand
Prix making its debut.
The Indian round, at a brand new
circuit being built near New Delhi, is
due to be the 18th round of the cham-
pionship and will take place on 30
October.
The season starts in Bahrain on 13
March and ends in Brazil on 27
November with the British Grand
Prix taking place on 10 July.
It has also been announced that no
new teams will be entered for next
season with the FIA insisting that
“none of the candidates meet the
requirements” to be granted an entry.
CITYA.M. 9 SEPTEMBER 2010 31

SPORT | IN BRIEF
Scots sorry for ‘crass’ fans
FOOTBALL: The Scottish Football
Association have apologised on behalf of
fans who booed the Liechtenstein nation-
al anthem before their European
Championship qualifier at Hampden Park.
A section of the crowd jeered the
anthem, which has the same tune as God
Save The Queen, before their last-gasp 2-
1 in on Tuesday night.
SFA acting chief executive George
Peat said he was “embarrassed” by the
reaction and added: “I apologise unre-
servedly to our visitors for the crass reac-
tion to their anthem.”
Bank rescues troubled Owls
FOOTBALL: The Co-operative Bank has
come to the rescue of cash-strapped
Sheffield Wednesday by settling the
club’s £703,000 debt with HM Revenue
and Customs.
The League One club avoided a wind-
ing-up petition in the High Court, saying
they were hopeful of finalising “very seri-
ous and advanced” takeover talks.
Birthday joy for Hanagan
RACING: Title-chasing jockey Paul
Hanagan celebrated his 30th birthday in
style after riding a 91-1 double on the
opening day of Doncaster’s St Leger
meeting. The jockey’s championship
leader won on 3-1 shot Barefoot Lady for
boss Richard Fahey before later doubling
up with victory aboard David Elsworth’s
Myplacelater at 22-1.
Woods and Mickelson may pair
GOLF: United States Ryder Cup captain
Corey Pavin has refused to rule out the
possibility of pairing world No1 Tiger
Woods and No2 Phil Mickelson at Celtic
Manor next month. “I’m not afraid to put
anybody with anybody,” he said. “Any
pairing is possible.”

Higgins admitted bringing

the game into disrepute.
Picture: GETTY

Higgins clears
his name in
fixing probe
▲

SNOOKER approach made to him earlier this

BY JON COUCH
JOHN HIGGINS admitted his relief last
night after being cleared of all match-
fixing allegations made against him
by the News of the World.
World Snooker chiefs decided to
withdraw charges of “agreeing or
offering” to accept bribes after
Higgins gave his version of events dur-
ing a two-day independent tribunal
in central London.
Higgins and his manager Pat
Mooney were accused of accepting
€300,000 (£259,000) to fix the out-
come of four future frames during a
meeting with undercover reporters
in Kiev.
But the three-time world champion
insisted he never had any intentions
of going through with the deal and
only went along with it because he
was “spooked” and wanted to get out
of the meeting as soon as possible.
Instead, however, the 35-year-old
Scot admitted bringing the game into
disrepute by not reporting the illegal
year to discuss fixing frames.
As a result, Higgins was fined
£75,000 and handed a six-month ban,
backdated from May when his origi-
nal suspension began.
In a statement, Higgins said: “I wel-
come today’s judgement following an
exhaustive enquiry into allegations
against me by a tabloid newspaper.
“I am pleased that the WPBSA and
Sports Resolutions have concluded
that I was not guilty of any dishon-
esty and had no intention of fixing a
match and no intention of doing any-
thing corrupt.
“If I’m guilty of anything it’s
naivety in trusting those who I
believed were working in the best
interests of snooker and myself. I
admit that I should have informed
the WPBSA of the events immediately
on my return from Kiev.”
Mooney also had two charges
dropped but was banned from taking
part in any snooker for life after Mr
Ian Mill QC admitted he found “much
of his account highly implausible”.

Djokovic cruises through as

Zvonareva reaches first semi
US OPEN
2010
BY JON COUCH
WORLD No3 Novak Djokovic cruised
into the US Open semi-finals last
night with a straight sets victory over
Gael Monfils at Flushing Meadows.
The Serb set up a last four clash
with either Roger Federer or Robin
Soderling after beating the French
17th seed 7-6 (7-2), 6-1, 6-2.
In the women’s, seventh seed Vera
Zvonareva edged into the last four for
the first time with a 6-3, 7-5 win over
Kaia Kanepi.
She now takes on either world No1
Caroline Wozniacki or Dominika
Cibulkova with defending champion
Kim Clijsters and Venus Williams con-
testing the other semi.
 Cell,
cell,
cell.

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