BUSINESS WITH PERSONALITY
WASTE IN
Issue 1,239 Tuesday 12 October 2010
PM GIVES GREEN
LIGHT TO MORE QE
POLITICS
▲
BY DAVID CROW
DAVID Cameron yesterday insisted the
government would not delay spending
cuts if the recovery starts to slow, but
gave his strongest hint yet that he
would support another round of quan-
titative easing.
Describing himself as a “fiscal con-
servative but a monetary activist”, the
Prime Minister used his first official
press conference to play down sugges-
tions the government would slow the
pace of fiscal consolidation in the face
of faltering growth.
Cameron insisted the British econo-
my was “making good progress” but
cited several potential risks, including
choppy recoveries in the US and
Europe, as well as subdued lending to
individuals and small businesses.
However, he insisted that looser
monetary policy – not slower spending
cuts – would be a better tool for boost-
ing demand. With interest rates
already at near-zero, that would
almost certainly involve another
round of quantitative easing.
He said: “I’ve always believed… that
it’s monetary policy that is a better
lever in terms of trying to make sure
the economy is progressing and
demand is growing”.
The Prime Minister was responding
to comments from energy secretary
Chris Huhne, who used a newspaper
article at the weekend to suggest the
government was not “lashed to the
FTSE 100 ▲ 5,672.40 +14.79 DOW ▲ 11,008.59 +3.86 NASDAQ ▲ 2,402.33 +0.42 £/$ t 1.59 -0.01 £/¤ 1.14 unc ¤/$ 1.39 unc
LIVERPOOL OWNERS SET
FOR HIGH COURT FIGHT
SEISMIC HEARING TODAY P30
David Cameron: “I’m a fiscal conservative but a monetary activist”
mast” over spending cuts. “It’s a bit
like setting sail,” he wrote. “If the wind
changes, you have to tack about to get
to [your destination].”
Huhne’s comments fuelled fears the
Treasury was planning to “reprofile”
the spending cuts, effectively delaying
big reductions in public expenditure
until later in the parliament.
Treasury officials admit there
might be some marginal revisions to
that amount that spending is cut by in
each financial year, due to contractual
obligations and the cost of making
www.cityam.com
government workers redundant. But
there is not expected to be any major
change to the pace of fiscal consolida-
tion; in the words of one official, there
is “no Plan B”.
Instead, the government hopes that
the Bank of England’s monetary policy
committee (MPC) will vote in favour of
a second round of quantitative easing
(QE) if the economy begins to flag.
According to a recent Bank report,
the last batch of QE reduced market
interest rates by between 75 and 100
basis points, suggesting it stimulated
Picture: REUTERS
demand quite significantly.
Cameron’s comments come as new
data suggests the economic recovery
will be sluggish. The British Retail
Consortium will today say that like-for-
like retail sales grew by just 0.5 per
cent year-on-year in September, while
the Royal Institution of Chartered
Surveyors is expecting house prices to
fall further. The British Chambers of
Commerce will say there must be
“forceful action on the part of govern-
ment and the MPC” to avoid a double
dip recession. ECONOMICS: P16
WHITEHALL
TOPSHOP
TYCOON ROOTS
OUT WASTE P6
FREE
Tuition fee
cap is set
to be axed
▲
POLITICS
BY MATTHEW WEST
THE cap on university tuition fees
should be abolished but graduates
should be spared from having to repay
them until they earn a minimum of
£21,000 a year.
These are the key recommenda-
tions that will be put forward by Lord
Browne, the former BP chief execu-
tive, in his much-anticipated report
into the funding of higher education,
which will be published this morning.
Currently tuition fees are capped at
£3,290 per year while graduates are
required to make repayments on fees
once they begin to earn £15,000.
Lord Browne will recommend that
while the cap on tuition fees should
be removed, a tapered levy should be
introduced on those universities that
charge more than £6,000 a year, effec-
tively penalising those institutions
that choose to do so.
The report, which will be warmly
welcomed by the Conservatives, is
likely to cause their Liberal Democrat
coalition partners some discomfort.
In the run up to the election, deputy
Prime Minister Nick Clegg signed a
pledge to vote against any fee hikes,
along with all 57 Lib Dem MPs.
However, advisers to Clegg say he
thinks he can sell a “radical” alterna-
tive to the status quo to his MPs. And
Prime Minister David said he was con-
fident of getting the reforms through
the House of Commons. “I may be
speaking too early but the signs are
good,” he said yesterday.
LORD BROWNE REPORT: P5
Certified Distribution
02/08/10 – 29/08/10 is 93,782
 2 News
Meddling with forex markets is risky
EDITOR’S LETTER
ALLISTER HEATH
ONE of the biggest problems in the
City today is that so few people have
worked in financial markets long
enough to remember how things used
to be just 25 years ago. This damaging
lack of a collective memory helps to
explain why so many investors remain
so relaxed about the prospect of cur-
rency wars breaking out – or even sup-
port simplistic solutions which have
previously been tried and seen to fail. I
am therefore grateful to HSBC’s cur-
rency strategists, led by David Bloom,
for reminding us that the last massive,
globally coordinated intervention in
7th Floor, Centurion House,
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Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Pictures Alex Ridley
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WHAT THE OTHER PAPERS SAY THIS MORNING
BLOW TO BANK CRISIS PLANS
Regulators are struggling to create a
global mechanism that could wind
down a big financial institution with-
out the disruption caused by Lehman
Brothers’ collapse in 2008. The US is
due to propose its own “resolution”
regime. But policymakers attending
meetings around the International
Monetary Fund have criticised the
regime and said agreement on it was
unlikely.
CDC FACES SHAKE-UP AFTER ANGER AT
PAY
CDC Group, the state-owned private
equity investor in emerging markets,
faces an overhaul of its structure,
strategy and executive pay under
plans to be announced by the govern-
ment. The £2.5bn taxpayer-funded
development group has struggled to
meet objectives of reducing world
poverty and making profits.
the forex markets ended in tears.
I am referring, of course, to the
Plaza Accord of 1985, a seminal inter-
vention which saw selling of the
greenback by all the top central banks
and which ultimately had a massive
impact on the global economy, albeit
not the one its proponents were seek-
ing. Given the widespread disappoint-
ment about the failure of discussions
at the IMF this weekend to resolve any-
thing – as if there were ever any hope
of any consensus emerging – this
ought to provide food for thought for
all those who believe that “something
must be done”.
There are many parallels with the
current situation. The US was running
a large trade and current account
deficit in the early 1980s (about three
per cent of GDP, the same as now), and
US unemployment was unacceptably
high (7.5 per cent, versus 9.6 per cent
now). As ever, there were fears that US
manufacturing jobs were being lost –
in those days the enemy wasn’t China
but rather Japan, partly because of the
Key BBC exec
gets the chop
MEDIA
▲
BY MATTHEW WEST
BBC deputy director general Mark
Byford is to be made redundant and
will leave the corporation in March
2011 as the broadcaster tries to
address criticisms that it has become
bloated and pays excessive salaries to
its senior executives.
Byford is understood to be the first
casualty of the review of the corpora-
tion’s management structure, after it
promised to reduce the number of
senior managers by a quarter.
BBC director general Mark
Thompson said in August that he
was committed to reducing the man-
agement bill, promising “simpler
structures, fewer layers, fewer man-
agement boards”.
According to the BBC’s own
accounts Byford currently receives a
GOOGLE TO MAP INFLATION USING
WEB DATA
Google is using its vast database of
web shopping data to construct the
‘Google Price Index’ – a possible
alternative to official statistics.
Google’s chief economist, Hal Varian,
highlights how economic data can be
gathered more rapidly using online
sources. Varian said that the GPI was
a work in progress and Google had
not yet decided whether to publish it.
EDITORS ATTACK FSA PLANS TO PLUG
LEAKS
A clampdown by regulators on con-
versations between financial firms
and the media is “misguided” and
“will only injure the market integrity
they purport to protect”, the editors
of four top media organisations say in
a letter to the Financial Services
Authority. The editors wrote to Hector
Sants, FSA chief executive, to protest
against recommendations issued in
an effort to staunch leaks to the
media about deals.
relative weakness of the yen, and
Germany, because the Deutschemark
was also thought to be too weak
against the dollar. The agreement –
struck at the Plaza Hotel in New York
between the G5, made up of the US,
the old West Germany, the UK, France
and Japan – called for a “further order-
ly appreciation of the main non-dollar
currencies against the dollar”, a deci-
sion which was followed by joint inter-
vention.
In the two years following the agree-
ment, the greenback fell by about 35
per cent on a trade-weighted basis and
by over 40 per cent against the yen,
HSBC calculates, a dramatic drop. This
did ultimately cut the US current
account deficit; US unemployment
began to fall from 1987, though the
reasons for this were much more com-
plex. Remarkably, while Japan’s cur-
rent account surplus dropped from
4.5 per cent of GDP in 1986 to 2.5 per
cent in 1989, there was no significant
decline in the US trade deficit with
Japan, whose firms were somehow
salary of £475,000 a year and has a
total remuneration package worth
£488,000. He is expected to get a pay-
off of up to £900m. Last year he had
his bonuses suspended, along with
others on the BBC board.
Sharon Baylay, head of marketing
and communications, and Lucy
Adams, human resources director,
are also expected to leave the board,
retaining their roles but reporting to
Caroline Thomson, the chief operat-
ing officer. A third member of the
board may follow.
The BBC refused to comment.
Mark Byford became
deputy director gener-
al of the BBC in 2004
and briefly served as
director general
LLOYDS AWAITS RULING ON ‘MISSOLD’
POLICIES
Lloyds Banking Group has confirmed
that it will freeze grievances from
customers who believe that they were
missold PPI policies until a review
sought by the British Bankers’
Association is complete. The BBA
called for the inquiry last week as
part of an increasingly bitter wrangle
with the Financial Services Authority
about standards set to come into
force in December.
PRIVATE HOSPITALS UNDER OFT
SCRUTINY
Britain’s private healthcare sector is
under scrutiny from the Office of Fair
Trading amid complaints from new
players that the market is not suffi-
ciently competitive. The regulator has
conducted an initial inquiry but has
not decided whether to pursue a full
investigation.
able to cope with the soaring yen. But
there were real, disastrous unintend-
ed consequences from the Plaza
Accords. A fearful Japan thought it
could compensate for the soaring yen
by easing monetary policy in 1985
(and again in 1987). But this merely
helped fuel a demented Japanese equi-
ty and land bubble, with asset values
shooting through the roof before the
bust finally came in 1990, taking
down the banking system and eventu-
ally turning that country from eco-
nomic wunderkind to basket-case.
It is true that some currencies are
hugely under-valued today: the
Chinese renminbi by 17.7 per cent, the
Malaysian ringgit and Hong Kong dol-
lar by over 18 per cent and the
Singapore dollar by 26.7 per cent,
HSBC reports. Other countries –
Indonesia, South Korea and Taiwan
among them – also enjoy excessively
cheap currencies. But the US should
beware: any cure could easily turn out
to be worse than the disease.
allister.heath@cityam.com
Murdoch will face a petition against his plans to buy BSkyB
Cable under Sky pressure
MEDIA
▲
BY STEVE DINNEEN
MEDIA giants yesterday united
against Rupert Murdoch’s plans to
buy BSkyB in an £8bn deal.
DMGT’s Associated Newspapers,
the Telegraph Media Group, Trinity
Mirror and Guardian Media Group
wrote a joint letter urging business
secretary Vince Cable to intervene in
the deal. The BBC, Channel 4 and BT
also signed the letter.
They argue the acquisition would
US HOUSING MARKET FACES NEW
THREAT FROM FORECLOSURE ROW
The US housing market faces a new
threat from a row over how banks
repossess homes. Bank of America has
halted foreclosures across the country
amid allegations homes are being
seized on data that has not been prop-
erly checked. JPMorgan Chase and
Ally Financial have also suspended
foreclosures. Politicians have caled for
a national suspension until the situa-
tion has been investigated
HEWLETT PACKARD TO CUT 1,300 UK
JOBS
Computer giant Hewlett Packard is to
cut a further 1,300 jobs in the UK and
switch work overseas, unions have
claimed. The cuts, which come on top
of up to 900 job losses announced in
June, were immediately attacked by
Unite as "butchery" of the companys
UK workforce.
CITYA.M. 12 OCTOBER 2010
NEWS | IN BRIEF
Fed vice chair warns of bubbles
Low interest rates can contribute to
financial bubbles even if they are not a
primary culprit, Janet Yellen said in her
first speech as vice chair of the US
Federal Reserve. At a time of growing
concern about the international reper-
cussions of another possible round of
monetary easing by the US central bank,
Yellen's comments suggested Fed offi-
cials are aware of the risks to its zero
rate policy. “It is conceivable that
accommodative monetary policy could
provide tinder for a buildup of leverage
and excessive risk-taking in the financial
system,” Yellen said to the National
Association for Business Economics.
London bombing inquest begins
The London suicide attacks of 7July
2005 might have been planned for the
previous day and the bombers were pre-
pared to fight police and throw impro-
vised bombs at them, the victims'
inquests were told yesterday. The first
day of the inquests into deaths of the 52
people heard that the victims had been
killed in acts of merciless savagery dur-
ing an “unimaginably dreadful wave of
horror”.
Picture: PA
seriously compromise media plurali-
ty, with the Murdoch empire already
owning the Times, Sun and News of
the World newspapers.
Murdoch currently owns 39 per
cent of the satellite broadcaster and
has proposed a 700p-a-share buyout
that would value the firm at £8bn.
News Corp is expected to file for
regulatory approval with the
European Commission. After this
Cable could chose to initiate a full
enquiry into the deal on the grounds
of public interest.
IRELAND'S TAXES UNDER PRESSURE
Debt-ridden Ireland is under increas-
ing pressure to reverse the policy that
helped to spur its breakneck growth:
More than a decade after it slashed
corporate tax rates to attract business-
es, it is fielding calls to raise them
again Policy makers in Europe are
pressuring Ireland to bring its tax
policies more in line with other EU
nations, many of which have chafed
at Ireland's use of low corporate taxes
to woo business.
PLANS GROW FOR EUROPEAN AUDIT
COP
The European Union begins consulta-
tions this week on proposals to regu-
late audit firms that could lead to
their oversight by a pan-European
market supervisor. The consultation
is being launched following weak-
nesses that officials say were identi-
fied during the financial crisis.
CITYA.M. 12 OCTOBER 2010
Thailand and
China try to
stem inflows
▲
ECONOMICS
BY HARRY BANKS
ASIAN authorities anxious about cur-
rency appreciation moved to stem for-
eign capital inflows yesterday while a
European official stepped up rhetoric
about a strong euro after IMF meet-
ings failed to defuse tensions about
exchange rates.
China temporarily raised reserve
requirements for six large commer-
cial banks, a surprise move aimed at
draining cash from the economy.
Thailand, also on edge about a rap-
idly rising currency that has alarmed
exporters, said it may impose a tax on
foreigners’ bond purchases.
With interest rates in the devel-
oped world at record lows, investors
have poured money into higher-yield-
ing emerging market assets, driving
up local currencies in the process.
Governments, afraid that rising
exchange rates will hurt exports and
stunt economic growth, have tried to
limit currency appreciation, sparking
fears of a “race to the bottom” that
may trigger trade tariffs and a sharp
decline in global growth.
“If each country insists on its own
interest during the recovery phase, it
will bring about trade protectionism,”
South Korean President Lee Myung-
bak said.
World finance leaders made no
headway on currency disputes at a
weekend International Monetary
Fund meeting, and Lee urged an
agreement before his country hosts a
G20 summit next month.
But China’s central bank governor
said it will take time to correct the
uneven pattern of global growth that
has contributed to exchange rate ten-
sions, warning that attempts at a
quick fix could create more problems.
“People may not have that kind of
patience, so they would like to see a
quick change in the balance, but it
may cause a kind of overshooting,”
Zhou Xiaochuan said
US and European officials say that
limiting emerging market currency
gains is the main cause of imbal-
ances.
Peppa Pig, the British pre-school cartoon character, is set to hit US TV screens
UK media group may sell
Peppa Pig to Nickelodeon
MEDIA
▲
BY STEVE DINNEEN
SHARES in Entertainment One soared
yesterday, fuelled by speculation of a
deal to screen the hit children’s TV
show Peppa Pig on Nickelodeon in
the US.
Its shares closed up eight per cent
at 85.5p, a year high, as investors
hoped the firm could replicate
Peppa’s smash-hit success in the UK.
Chief executive Darren Throop told
City A.M. last month that the firm has
been in talks about screening the
UK’s number one-rated children’s
show on a major US network.
A deal could prove extremely lucra-
tive for Entertainment One, with
Peppa Pig selling £100m worth of toys
in the UK alone last year.
If a deal is struck, Entertainment
One would likely keep the rights to
the show and Nickelodeon would get
a percentage of licencing merchan-
dising sales. CEO INTERVIEW: P20
News 3
Strike threat
recedes as BA
nears union deal
AVIATION
▲
BRITISH Airways and the union repre-
senting its cabin crew are moving
closer to a peace deal, with a branch
of the union claiming a deal could be
reached as early as this week.
“We did have talks with BA and
conciliation service Acas last Friday,
we did make some progress and we
hope to reconvene to continue talk-
ing later this week,” a Unite spokes-
woman said yesterday.
The Unite union, which represents
90 per cent of BA’s 12,000 cabin crew,
has been embroiled in a year-long dis-
pute with the airline, which has
resulted in a series of strikes costing
BA £150m.
Unite’s main cabin crew branch,
Bassa, told members in an email last
week that Tony Woodley, Unite’s gen-
eral secretary, hoped to finally reach
agreement with BA this week.
“We have been informed that Tony
believes that he should be able to con-
clude a new proposal, with signifi-
cant changes, by the middle of next
week at the latest,” Bassa’s email to
members said.
A key sticking point in resolving
the dispute, which originally centred
around cuts to pay and staffing levels,
has been BA’s decision to remove trav-
el perks from cabin crew who took
part in the strikes.
 4 News
City sceptical on the prospect
of rival offers for PotashCorp
▲
M&A
BY VICTORIA BATES
ANALYSTS yesterday poured scorn on
talk of rival white knight offers wait-
ing in the wings to scupper BHP
Billiton’s $39bn (£24.5bn) bid for
Canadian fertiliser giant PotashCorp.
Reports over the weekend suggest-
ed both the Ontario Teachers Pension
Fund and Chinese state-owned chem-
icals group Sinochem had already
PotashCorp is hoping rival bids will emerge to see off BHP’s hostile offer Picture: GETTY approached Temasek with a view to
trying to find a partner to bid for all
or part of PotashCorp.
But City analysts said the length of
time which has already elapsed since
BHP’s bid – almost eight weeks – and
the increasing complexity of deals
being discussed meant BHP is likely
to have a clear run at the company.
“With six weeks to go before the
BHP offer closes it is clear that the
Chinese look unlikely to enter the
fray and the schemes being tabled
now are becoming increasingly politi-
CBI’s Lambert
lashes out at
bank bashers
▲
BANKING
BY VICTORIA BATES
RICHARD Lambert yesterday used his
last speech on banking as CBI direc-
tor-general to launch a scathing
attack on the UK’s culture of political
bank-bashing.
Lambert, who is due to step down
from his position next year, said
politicians were “making matters
worse” with unrelenting and vicious
attacks on the banks, compounding
the problem of lack of trust between
the sector and the public.
“This back and forth between the
politicians and the bankers – what
you might call Vince Cable versus
Lombard Street – is not constructive,”
Lambert said.
“The crisis had many causes.
Individual greed and errors of judg-
ment on the part of the bankers were
one. But there were much more pow-
erful forces driving the way to catas-
trophe. They included badly designed
policy frameworks, errors of judg-
ment on the part of government, cen-
tral banks, and regulators, and bad
macroeconomic management.”
The CBI director-general said that
persisting with laying the blame at
the banks’ door would result in the
Microsoft unveils 10 new phones
as it bids to usurp Apple and RIM
▲
TELECOMS
BY STEVE DINNEEN
MICROSOFT has unveiled 10 new
Windows Phone 7 powered mobiles
as it attempts to catch up with rivals
Apple, Google and RIM.
Microsoft will supply software to
five new HTC phones, two Samsung,
two LG and one Dell. The devices will
be available with 60 operators in 30
countries. They will hit Europe imme-
diately and the US on 8 November.
The move has been seen as a last-
ditch effort to break into the lucrative
CITYA.M. 12 OCTOBER 2010
cal, complex and difficult to execute,”
Liberum Capital said yesterday.
“We feel the defence is running out
of ideas and if they succeed in seeing
off BHP it is because they have
blocked the deal (politically or other-
wise) and not because they have
tabled a knock-out premium bid.”
PotashCorp is currently working on
contingency plans to break up the
company as a way of batting away
BHP’s bid, including selling $14bn of
nitrogen and phosphorous assets.
“wrong responses” to the sector’s
problems, including the introduction
of a much higher banking levy, which
he said would place the highest bur-
den on banking customers.
Lambert added that it is “irresponsi-
ble” for politicians to caricature
investment banks as casinos, warning
that “overheated rhetoric” has already
deterred at least one foreign player
from investing in the UK market.
But he urged bankers to step up to
the plate voluntarily to demonstrate
sensitivity in the area of compensa-
tion, particularly as the public spend-
ing cuts start to bite in the New Year.
“If trust has to be built on a sense of
fair dealing, then the combination of
pay freezes and job losses in the pub-
lic sector with large bonuses in the
City would be toxic in the extreme,”
Lambert warned, calling on banks to
act collectively on compensation and
resist the temptation to “poach disaf-
fected mega-stars”.
The CBI’s Richard
Lambert said the
“Vince Cable versus
Lombard Street” tussle
is not constructive
smartphone market after being left
behind by its bitter rivals.
The software is consumer-focused
and integrates with Microsoft’s Xbox
and Zune music player. Analysts have
been tentatively enthusiastic about
the new devices, which have already
drawn comparisons with Apple’s all-
conquering iPhone.
Even Apple-loving Stephen Fry
praised the phones yesterday. He said:
“I have felt enormous pleasure using
this phone. I want biodiversity, the
more players there are the more it
drives creativity and innovation.”
CITYA.M. 12 OCTOBER 2010 Politics 5

Schools becoming academies

at rate of one a day, says Gove
schools will get academy status in the similar aims, converted just 15

▲
POLITICS
BY DAVID CROW
STATE schools are converting to acad-
emies at a rate of one a day, education
secretary Michael Gove said yesterday,
as the government’s plan to free
headteachers from local government
control gathers pace.
In total, 121 academies have
opened since the election, bringing
the total number to 324. A further 90
coming months, while 41 failing
schools are set to switch status from
September 2011. That means there
will be at least 455 such schools by
the time of the new school year in 11
months.
Aides to Gove say the academy pro-
gramme represents the fastest educa-
tional reform in English history. They
point out that Lord Baker’s City
Technology Programme, which had
schools over a five-year period.
Academies are schools that receive
their funding directly from the gov-
ernment, and do not have to answer
to their local authority. Their backers
say they have improved standards.
In 2008-09, academies increased
the number of pupils getting five
good GCSEs including English and
Maths by five per cent, double the
national average of 2.5 per cent.

Lord Browne will unveil his report today Picture: Micha Theiner/City A.M.

Universities in
fees shake-up
Meanwhile, students from house-
▲

POLITICS
BY MATTHEW WEST
THE long-awaited report from Lord
Browne into university tuition fees
and student finances will recom-
mend a series of proposals, which
aim to ensure those from low income
households will still be able to access
higher education that is “free at the
point of entry”.
City A.M. understands the report,
which is published today, will include
proposals to remove the current cap
on tuition fees of £3,290. But this will
be balanced by the introduction of a
tapered levy that will, in effect, tax
universities that charge more than
£6,000 a year in tuition fees.
Some of the money raised from the
levy should be used to provide better
career advice in state schools, Browne
will say, so that pupils will be better
informed about their career opportu-
nities on leaving education.
holds with an income of less than
£60,000 should receive a grant and a
student loan, both of which will see a
“meaningful increase”, while the
whole system for providing financial
assistance should be simplified.
The amount of grant a student will
be entitled to should be determined
by household income but those from
households with an income of less
than £25,000 should receive a full
grant for the entire cost of their uni-
versity tuition, Browne will say.
The report also recognises that ask-
ing graduates to repay loans for their
tuition fees once they begin to earn
£15,000 a year places an unnecessary
financial burden on them. It recom-
mends raising the threshold at which
the loans become payable to yearly
earnings of £21,000.
The report adds tuition fees and
financial support should be the same
for part-time and full-time students.

CITY VIEWS: SHOULD UNIVERSITIES BE ALLOWED

TO CHARGE WHAT THEY WANT? Interviews by Emma Sadowski
DHUGAL ROBERTSON | AXE
“No. If you are going to pay for university, then you
should be provided with job opportunities at the end of
your degree and not with a load of debt.”

GABI MASON | TESTPLANT LTD

“University fees should be capped. If they aren’t, we’ll
end up with a large division of students who can
only afford to go to universities with low academic
esteem.”

MAYANK MISHRA | AVIVA

“Universities should not be allowed to charge what they
want, education should be available to people
because they are talented and not because they
have money.”
 6 Focus on Green review
Civil servants need to be accountable
COMMENT
NICK SEDDON
W
HAT a surprise. Sir Philip
Green has found that the
Government is “lamentably
bad” at the procurement of
goods and services and the manage-
Topshop boss
finds waste
in Whitehall
POLITICS
▲
BY DAVID CROW
THE government is wasting staggering
sums of money by failing to take
advantage of its size and credit rating
to get the best deals from suppliers,
Topshop tycoon Sir Philip Green said
yesterday.
Prime Minister David Cameron,
who commissioned the report, said it
“made for pretty chilling reading”,
while ministers said the report
showed that greater efficiency could
soften the impact of cuts.
Green, whose Arcadia Group owns
the Topshop clothing chain, was asked
to study government efficiency.
He focused on procurement of
goods and services like computers,
travel and office supplies and the man-
agement of government property.
“The conclusion of this review is
clear: credit rating and scale in virtual-
ly every department has not been used
to make government spending effi-
ment of its property portfolio. The
budgets he looked at are worth
£191bn in total, and he believes bil-
lions could be saved. He argues that
the public sector is spending £700m a
year too much on telecoms alone.
Clearly, these are shocking figures;
but they should be no surprise.
Whitehall is littered with such
reports. In 2009, the National Audit
Office found that better public sector
procurement could save anything up
to £11.5bn annually. Bernard Gray’s
defence review found up to £2bn of
savings could be made from better
procurement processes.
Sir Peter Gershon, who advised gov-
cient,” said Green. “There is no reason
why government should not be as effi-
cient as any good business.”
Green said he was not going to place
a total on the potential savings, but set
out examples of tens of millions of
pounds squandered through poor
management of the central govern-
ment’s property portfolio.
“I think from this report it is clear
that the prize for the taxpayer is too
big and significant not to chase,” he
said.
Looking at the example of fixed line-
telecoms, Green said that centralised
purchasing could potentially save 30-
40 per cent on an overall bill estimated
at £2bn a year.
“The scale of the waste uncovered by
Sir Philip and his team is staggering,”
said cabinet minister Francis Maude,
who is leading the drive to find effi-
ciency savings.
“Every pound that we can take out
of the cost of government is a pound
we can protect on the front line.”
ernment from 2000 to 2004 on how to
make savings, recommended greater
centralisation of purchasing by the
public sector, precisely what Green is
now calling for. Gershon was rebuffed
by Gordon Brown, but Green will find
the current government more recep-
tive.
Indeed, Francis Maude, the minis-
ter for the Cabinet Office and
Paymaster General, who helped com-
missioned Green, has recently said
that all procurement contracts over a
certain threshold need to be autho-
rised by him. Setting a centralised
procurement framework but leaving
purchasing – actually buying goods
EFFICIENCY REVIEW | KEY FINDINGS
● ”The Government is failing to
leverage both its credit rating and its
scale”
● Basic commodities are bought at
significantly different prices across
government departments
There are 83 individual contracts for
office supplies across central govern-
ment. Highest price paid for a box of
paper, £73; lowest price paid for a box of
paper, £8
● Multiple contracts have been
signed with some major suppliers by
different departments at different
prices
98 per cent of the government spend on
and services – more local is a sensible
plan. It sends out powerful signals. So
is that it – job done? Sadly not.
The necessity to conduct a public
finances rescue mission is a familiar
and typically crisis-driven task.
Eliminating waste and salami-slicing
existing budgets tend to be the politi-
cians’ stock answers, but neither of
these approaches goes to the heart of
the systemic and structural problem.
The real problem at the heart of
the civil service is accountability. The
lack of responsibility for saving
money, the lack of process for setting
and challenging detailed departmen-
tal budgets and the inconsistent com-
mobile phones is with one provider. The
provider has 68 different contracts with
government departments, typically nego-
tiated separately
● The government is the UK’s largest
tenant/owner, yet the use and man-
agement of space is wholly inefficient
An agency relocated to the Midlands,
signing a 20-year lease with no break
clause for 15 years. It was abolished
after 9 months. Still paying £1.2m in rent
annually
● Expensive IT services are
contracted for too long with no
flexibility and no break clause
There are six years left on an IT contract
CITYA.M. 12 OCTOBER 2010
mercial skills – these things will not
be sorted out by centralised delivery.
That will shield officials from taking
personal responsibility.
No progress can be made on reduc-
ing the deficit and improving public
services without introducing con-
tracts that hold civil servants to
account for the outcomes of their
work. Offering performance-related
pay, ending the notion of a civil serv-
ice job for life and making it possible
for ministers to sack their permanent
secretaries are all vital. Only account-
ability will deliver real change.
Nick Seddon is deputy director of the inde-
pendent think-tank Reform.
Sir Philip Green
said there was no
reason why the
state should not
be as efficient as
a good business
costing more than £100m annually, at
well over market rates and with some
services no longer required
● Data is very poor and often
inaccurate
“We were initially advised that the annu-
al travel spend for central government
was £2bn; the second estimate was
£500m; the third estimate was £768m.
A thorough review revealed that the
actual spend was £551m.”
● “There is no process for setting
and challenging detailed departmen-
tal budgets”
● “There is no motivation to save
money”
 FOREX • STOCKS • CFDS • FUTURES • COMMODITY CFDS • FX OPTIONS • BONDS

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 8 News
World Cup lift
for Ladbrokes
boosts shares
▲
LEISURE
BY HARRY BANKS
LADBROKES, Britain’s biggest listed
bookmaker, got an earnings boost
from the soccer World Cup and the
company added yesterday that it was
on track to meet full-year targets,
sending its shares higher.
Operating profit for the three
months to 30 September rose 128 per
cent from a year ago to £51.1m. The
World Cup resulted in a surge in busi-
ness, with revenue rising 12 per cent,
while the company also lowered its
operating costs. Ladbrokes is the lat-
est gambling company to have report-
ed an upbeat business outlook.
In August, rival William Hill said it
was on track to meet full year-expec-
tations after reporting higher first-
half earnings, while earlier this
month Rank forecast a full-year per-
formance around the top end of ana-
lysts’ expectations as it posted higher
third-quarter revenue.
“We see some cyclical recovery
potential in retail, some catch-up
potential relative to William Hill and
reasonable long-term growth poten-
tial in online,” Morgan Stanley ana-
lysts said in a research note. Morgan
Stanley kept an “equal-weight” rating
on Ladbrokes shares.
In August, new Ladbrokes’ chief
executive Richard Glynn restored the
dividend and unveiled a manage-
ment shake-up along with a deal to
buy gaming machines for Ladbrokes’
outlets. Glynn said Ladbrokes
remained interested in the privatisa-
tion of state-owned betting firm the
Tote, but it was not a top priority.
ANALYSIS l Ladbrokes
141.30
150 p 11 Oct
145
140
135
130
12 Jul 30 Jul 19 Aug 9 Sep
Ladbroke chief executive Richard Glynn
Results flatter to deceive
BETFAIR may be getting all the press
at the moment with its upcoming
float and its threats to leave the UK,
but Ladbrokes reminded us it is still
here yesterday when it announced a
whopping 128 per cent hike in oper-
ating profit.
This is obviously to be taken
strictly within the context of
incredibly weak comparatives and
the World Cup boost but still repre-
sents good progress. It has kept
costs at 2009 levels and its slimmed
down debt pile (now at £490m)
looks manageable compared to
cash generation.
29 Sep
With a valuation of 7.5 times
Ebitda, it appears a snip compared to
Betfair’s 13.5 times. However, it will
struggle to compete with its online
rival’s higher margin potential.
Worryingly its average stake
declined five per cent year-on-year
and William Hill still looks prefer-
able thanks to its more highly devel-
oped online strategy. If you’re a
betting man it’s worth a punt but
keep a closer eye on its rivals.
BOTTOMLINE
Analysis by Steve Dinneen
CITYA.M. 12 OCTOBER 2010
Bain pays $2bn
for kids clothes
firm Gymboree
▲
PRIVATE EQUITY
BY HARRY BANKS
CHILDREN’S clothing maker
Gymboree is selling itself to buyout
firm Bain Capital Partners for $1.8bn
(£1.14bn), it said yesterday, as cheap
valuations and clean balance sheets
make specialty apparel companies
attractive takeover targets.
Bain beat other private equity bid-
ders such as Apollo Global
Management, which also had been
pursuing the firm, two sources famil-
iar with the situation said.
The deal values Gymboree at $65.40
in cash and includes a “go-shop” peri-
od of 40 days until November 20
when the company can solicit rival
bids.
Shares closed at $64.83 on Nasdaq,
indicating the market is not anticipat-
ing a higher bid for the company.
About one third of the deal value is
made up of equity and the remainder
debt, one of the sources familiar with
the situation said.
Private equity deal flow has
increased in recent months, as financ-
ing markets have rebounded. Some
buyout funds are under pressure to
spend money before their investment
periods end
Gymboree has topped earnings esti-
mates for the past six quarters, helped
by its successful loyalty programme.
CITYA.M. 12 OCTOBER 2010
Stelios ends
brand dispute
with easyJet
▲
AVIATION
BY EMMA SADOWSKI
EASYJET celebrated yesterday after set-
tling a bitter court battle with founder
Sir Stelios Haji-Ioannou that will see it
hold on to the orange “easy” branding
in a deal that is expected to net Stelios
more than £80m in royalties over the
next ten years.
The four-month dispute ended after
the two sides agreed a revised brand-
ing licence, which has a minimum of
ten years, that allows the budget air-
line to generate revenues from its non-
airline operations, such as food and
luggage services.
EasyJet has agreed to make annual
royalty payments equal to 0.25 per
cent of its revenue to Stelios’
easyGroup. It will hand the group
£3.9m and £4.95m in the first two
years of the new 50-year agreement.
The settlement gives the airline
more freedom to generate revenue
from outside services, including the
possibility of making commission
from hotel and rental car bookings if
News 9
BA and union
edge closer to
new peace deal
AVIATION
▲
BRITISH Airways (BA) and the union
representing its cabin crew are mov-
ing closer to a peace deal, with a
branch of the union claiming a deal
could be reached as early as this week.
“We did have talks with BA and
bought through the group’s website. (conciliation service) Acas last Friday,
Stelios, who will be paid £3000,000 a we did make some progress and we
year for the next five years as part of Stelios Haji-Ioannou has been in dispute with the company he founded Picture: GETTY hope to reconvene to continue talk-
the agreement, has given up the right ing later this week,” said Unite.
to appoint himself as chairman of the The Unite union, which represents
airline’s board. MARK SHILLITO Himsworth of One Essex Court were 90 per cent of BA’s 12,000 cabin crew,
He described the settlement as a appointed as barristers for the court has been embroiled in a year-long dis-
“win-win for all concerned” and said HERBERT SMITH proceedings which kicked off in June. pute with the airline, which has
that he was “content that this was a Meanwhile, Jane Mutimear, a part- resulted in a series of strikes costing
fair deal for both sides”. ner at law firm Bird & Bird, was the BA £150m.
The two first went to court in June lead adviser and main solicitor to Unite’s main cabin crew branch,
to resolve the dispute. Stelios took easyGroup and Sir Stelios. She spe- BASSA, told members in an email last
easyJet to court to clarify what “core” cialises in IP litigation. week that its general secretary Tony
services were and how much his com- Michael Bloch QC and James Woodley, hoped to finally reach
pany should be paid in royalties. Mark Shillito, an intellectual property Walmsley of Wilberforce Chambers agreement with BA this week.
(IP) partner at Herbert Smith, took argued for easyGroup in front of a “We have been informed that Tony
ANALYSIS l Easyjet 454.30 the lead role advising long-standing judge at the chancery division of the believes that he should be able to con-
11 Oct client easyJet on its four month brand- High Court. clude a new proposal, with signifi-
460
p ing dispute against easyGroup founder At the heart of the dispute were cant changes, by the middle of next
440 Sir Stelios Haji-Ioannou. tensions over a brand licensing agree- week at the latest,” BASSA’s email to
420
Shillito has a track record of acting ment that was struck between members is thought to have said.
for a number of large corporates easyJet and easyGroup when the air- “We’re going to have more talks
400 embroiled in patent, trademark, brand- line floated a decade ago. Haji- this week,” a BA spokesman said.
380
ing and contractual disputes. He Ioannou was looking for clarification A key sticking point in resolving
counts Apple, Vodafone and Yell as on the definition of the licensing the dispute, which centred around
360 some of his clients. agreement. cuts to pay and staffing levels, has
Geoffrey Hobbs QC and Emma Emma Sadowski been BA’s decision to remove travel
12 Jul 30 Jul 19 Aug 9 Sep 29 Sep perks from striking cabin crew.
 The Capitalist
10
HEDGIES
SPREAD THE
DOOM FOR A
GOOD CAUSE
ONCE more, the hedge fund community
unites for a good cause – this time not by
shelling out enormous sums of money
while being wined and dined at a charity
gala dinner, a la Arki Busson, but by writ-
ing a book designed as a warning to policy-
makers all over the globe.
Tonight will see swanky nightclub
Mahiki host the launch of the book, The
Gathering Storm, which is the brainchild
of Trafalgar Asset Management founder
Lee Robinson.
In a nutshell, the tome involves 18
hedge fund managers and analysts con-
tributing their penny’s worth towards the
argument that the actions of central
banks and governments the world over
are laying the foundations for an even
worse crisis to come, not solving the
financial world’s woes.
Contributing are renowned bears
Albert Edwards, SocGen’s global strate-
gist; Oaktree Capital Management’s
Howard Marks; financial expert John
Mauldin, the author of the “Thoughts
from the Frontline” newsletter; and oth-
ers such as Kolonna Asset Management’s
Patrick L Young, Arbuthnot Securities
chief strategist James Ferguson, QB Asset
Management co-founders Lee Quaintance
and Paul Brodsky, and Avenue
Capital chief executive Marc
Lasry.
Despite all the doom and
gloom, there’s a sunnier side
to the book too – all the pro-
ceeds are going to around 20
charities of the authors’
choice.
BOOK WORM
While we’re on the subject of lit-
erary endeavours, The Capitalist’s
memory was jogged yesterday by
news of a job move on the part of
James Twining, formerly an associ-
ate principal at management con-
sultancy McKinsey.
For Twining – who moves over to
become group strategy director at
Jardine Lloyd Thompson (JLT), inci-
CITYA.M. 12 OCTOBER 2010
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“The charity
book features
18 of the
financial
world’s most
bearish
hedge fund
managers
and analysts” Betfair co-founder Black has been horsing around
“Leaving aside the fact that Betfair is
finally floating after a ten year slog, I’ve
had plenty of horse action going on,”
Black wrote on his blog on Saturday.
After resigning his position as a non-
executive director on the firm’s board
amid its current IPO plans, co-founder
dentally shortlisted as insurance company Lee Robinson, founder with home-made food and drink. Having Black was free to trawl the week’s sales of
of the year for City A.M.’s upcoming inau- of Trafalgar Asset brewed it to maturity, I’ve come to the young racehorses, snapping up a new filly
gural awards ceremony on 28 October – Management, has conclusion that the stuff’s quite literally at Tattersalls for 50,000 guineas.
has another, quite different, string to his united the financial undrinkable.” And later on, more joy when one of his
bow. world’s most bearish Better not give up the day job, then. horses, Cheddar George, won at Kempton
He’s better known for authoring a four- strategists and hedge Park – providing proof that even when
part series of thriller novels – The Double fund managers preparing to net a windfall worth millions
Eagle, The Black Sun, The Gilded Seal and
The Geneva Deception – about a brilliant Picture: REUTERS
HORSES FOR COURSES of pounds, victory is always sweet.
A “long week” for Betfair’s Andrew “Bert” “I collected the prize, which was a year’s
young art thief, the now-reformed Tom Black last week, even by his own admis- supply of Irn Bru,” Black reported back,
Kirk, now helping the FBI solve murderous sion. cheerily.
mysteries. Can’t say the world of insur-
ance will provide quite the same level of
thrills, but good luck to the multi-talented POLO IN THE PARK IS LONDON’S SPORT ATTRACTION OF THE YEAR
chap.
A COUP for the City
BRUMBY’S BREW at the end of last
Speaking of the extra-curricular exploits of week, as the network-
our favourite City characters, I ing event of the sum-
hear that Mark Brumby, the mer – Mint Polo in
former Astaire Securities the Park, the brain-
leisure analyst who’s now set child of Fox-Davies
up his own shop, has turned Capital founder
his hand to brewing in his Daniel Fox-Davies –
spare time. scooped the Sport
That’s right: as a protest Attraction of the Year
over extortionate prices of gong at the annual
beer in the pubs, Brumby – London Lifestyle
now of Langton Capital – broke Awards. The polo
out the hops and yeast to competition, which
attempt to produce a rival to his beat Wembley and
usual tipple. Wimbledon to the
“Any plans to branch out to honour, was this year
selling the stuff and giving the won by team New
brewers a run for their money?” York, sponsored by
The Capitalist enquired, innocently. City A.M.
“Absolutely not,” came the
determined response. “There are
‘elf ‘n’ safety laws in place to stop
people like me poisoning others
CITYA.M. 12 OCTOBER 2010 News 11

Battersea Power Station

owner agrees loan break
the region of £371m. REO had already agreed new lend-
▲

PROPERTY
BY STEVE DINNEEN
REAL Estate Opportunities (REO), the
owner of London’s iconic Battersea
Power Station, has announced it has
won a reprieve from its creditors
while it finds an outside investor.
Note holder Oriental Property,
which used to own the site, and other
creditors have agreed to give the site a
payment holiday on bonds worth in
The move will drive forward Dublin-
based REO’s plan to demerge its asset
into a separate listed company. REO is
desperate to offload the site after
being hammered by the torrid proper-
ty market in its home country.
Several buyers are understood to be
monitoring the development, which
will cost an estimated £4.5bn to devel-
op, with sovereign wealth funds
among the likely buyers.
ing terms with Lloyds and NAMA –
Ireland’s “bad bank scheme”– during
the summer, which gave it breathing
room to find a buyer for the site.
It said it would launch a roadshow
to attract a long-term equity partner
to the project ahead of the expected
receipt of planning permission for
redevelopment, and that it hoped to
list the project before the end of the
year. Battersea has lain derelict for more than 25 years Picture: GETTY

Songbird edges closer to

acceptance for open offer
economic outlook. It reported the
▲

PROPERTY
BY HARRY BANKS
CANARY Wharf-owner Songbird
Estates yesterday said it had received
the backing of shareholders repre-
senting 95.3 per cent of the new ordi-
nary shares under an open offer
designed to raise £140m.
The new ordinary shares are
expected to shortly commence deal-
ing on the Alternative Investment
Market as the company, which counts
Qatar Holdings and China
Investment Corporation among its
largest shareholders, looks to pay
down its debts.
Last month Songbird said bumper
demand for offices across its estate
had held firm despite the lacklustre
market value of its investment portfo-
lio rose to £4.8bn in the half year to
the end of June, reflecting a six per
cent rise in adjusted net asset value of
178p a share.
Proceeds from the fully underwrit-
ten open offer will be used to finance
the repurchase of a £135m sharehold-
er loan taken out at the time of a
£1bn corporate refinancing a year
ago.
Songbird was hit by the collapse of
failed US investment bank Lehman
Brothers two years ago, which result-
ed in it losing more than £50m in lost
rent on its Bank Street offices. That
contributed to an 85 per cent fall in
underlying half-year profits to £13.1m
in the six month period.
 12 News
Ex-Hawkpoint boss Briance
joins Edmond de Rothschild
▲
BANKING
INVESTMENT banker Richard Briance
has ambitious plans for the expan-
sion of the Edmond de Rothschild
group’s UK operations, after taking
his new role at the helm of the firm.
Briance, who was formerly chief
executive and then deputy chairman
of corporate finance advisory bou-
tique Hawkpoint, has joined Edmond
de Rothschild as its new UK chief
executive, overseeing its current oper-
ations in corporate finance, fixed
income, emerging market country
funds and a fund of hedge funds arm.
“The blindingly obvious opportuni-
ty is in building up a UK-located pri-
vate banking operation,” Briance said,
citing the group’s strength in the pri-
vate banking market in Europe and
the reassuring pull of the Rothschild
family name.
But the firm, which employs
around 50 people in London, may
also look to add to its strengths in
other areas, Briance said. One possi-
ble option would be the addition of a
specialist asset management busi-
ness, perhaps focused on the emerg-
ing markets or on specialised credit.
Briance was also previously chief
executive of WestMerchant Bank,
global head of fixed income at UBS
and a managing director at Credit
Suisse First Boston.
London float
for Russian
internet firm
▲
TECHNOLOGY
BY PHILIP WALLER
A RUSSIAN internet service provider
part-owned by billionaire Alisher
Usmanov is floating on the London
market to raise an estimated $500m-
$750m (£314.7m-£472.1m).
Usmanov and other investors in
Mail.ru Group plan to offer up to 15
per cent of the group’s share capital,
giving it a market value of about
$5bn, a source close to the deal said.
Usmanov owns an undisclosed
stake in Mail.ru along with sharehold-
ers including South Africa’s Naspers,
the company’s management team,
Chinese internet group Ten Cent and
Goldman Sachs. Usmanov and other
investors are understood to be keen to
make shares in the company more
widely available in a major European
financial market such as London.
Alisher Usmanov is
best known in Britain
for his role as an
investor in Arsenal
Football Club
Sales leap for Travis Perkins as it
warns of looming spending cuts
▲
CONSTRUCTION
BUILDERS’ merchant and DIY retailer
Travis Perkins yesterday announced
higher sales, but pointed to signs that
government spending cuts had
begun to bite.
Travis, which trades from more
than 1,200 branches under Travis
Perkins, Keyline, Wickes and other
brands, said turnover at branches in
its merchanting division open at least
a year increased 10.3 per cent in the
three months to 30 September.
The group said its outlook for the
year as a whole remained unchanged,
although growth in merchanting had
begun to slow. “This rate has shown
CITYA.M. 12 OCTOBER 2010
Ex-Hawkpoint
boss Richard
Briance has
joined Edmond
de Rothschild
Chairman Yuri Milner said: “We are
proud to have reached this important
milestone in our company’s develop-
ment.”
Mail.ru is the biggest internet com-
pany in high-growth Russian-speaking
internet markets, reaching about 70
per cent of Russian internet users per
month, and claims to be the world’s
seventh biggest internet business,
based on page views. The group, incor-
porated in the British Virgin Islands,
runs two of the three biggest Russian
language online social networking
sites as well as instant messaging,
email and online gaming services.
It also owns a 2.38 per cent stake in
Facebook and small minority interests
in several other Russian and interna-
tional internet firms. The group said
it was keen to cash in on the potential
growth offered by the more than
250m Russian speakers worldwide.
Chief executive Dmitry Grishin
said: “We believe we are well-posi-
tioned to benefit from the expected
growth of the Russian internet adver-
tising market.”
The listing is expected to take place
in London Stock Exchange before the
end of this year.
signs of moderating in the most
recent few weeks of trading,” it said.
Travis warned in July that public
sector new construction would face
pressure from spending reductions
and new house-building was unlikely
to continue the very strong growth of
the first half.
The firm, which is trying to buy
plumbing and heating company BSS
Group for about £580m to create the
biggest plumbing and heating trade
and retail distribution business
group, said like-for-like sales at
Wickes rose 0.6 per cent with relative-
ly weaker trends in big-ticket purchas-
es. Total group sales in the nine
month period rose six per cent.
CITYA.M. 12 OCTOBER 2010 News 13

Heathrow traffic climbs

ANALYSIS l Heathrow September traffic
North America up
6.5% Russia up
23.7%

as long haul flights rise Europe up

11.7%

Heathrow saw more passengers fly- ures improved by 11.7 per cent.
▲

AVIATION
BY EMMA SADOWSKI
HEATHROW Airport posted record
September traffic figures after 6.2m
people used the UK hub, raising
hopes of an air industry recovery.
Passenger numbers at Heathrow
were up by 7.6 per cent last month,
marking the largest yearly increase
since July 2004, according to airports
operator BAA.
ing to Brazil, India, Russia and China
compared with last year.
Passengers flying to Brazil were up
by almost a third to 31,546 compared
with 2009, while flights to Russian
destinations saw a 23.7 per cent rise
in passenger numbers.
North American destinations
reported a 6.5 per cent rise in passen-
gers, while 16.4 per cent more people
flew to South America. European fig-
Colin Matthews, chief executive of
BAA, said: “The growth reflects an China up
improved outlook for our airline cus- 10.3%
tomers and an increase in business
confidence.”
BAA now owns six airports – Brazil up
Heathrow, Stansted, Southampton, 27.1% India down
Glasgow, Edinburgh and Aberdeen – 0.3%
after it sold Gatwick for £1.5bn in
December 2009 to US investment
fund Global Infrastructure Partners.

Stobart signs Aer Arann deal

AVIATION passenger volumes will grow to
▲

TRANSPORT group Stobart has signed
a five-year deal with Ireland’s Aer
Arann to use its Southend Airport.
The deal will see Stobart invest
€2.5m (£2.2m) into the deal and will
see the Irish airline operate flights
out of the London airport starting
next March. Expectations are that
300,000 a year.
Stobart said the deal will further
strengthen its footprint in Ireland
and that its agreement with Aer
Arann could explore new opportuni-
ties in the future.
The deal is subject to the airline’s
successful departure from adminis-
tration.
 14 News
The unemployment Nobel
CITY COMMENT
MARC SIDWELL
A
S HIGH unemployment once
again stalks the western world,
the Nobel committee has
rewarded three economists
who revealed how the process of
searching for work affects unemploy-
ment. As Dale Mortensen and
Christopher Pissarides put it in 1998:
“Market friction, the costly delay in
the process of finding trading part-
ners and determining the terms of
trade, is ignored in the standard theo-
ry of perfectly competitive markets”.
Beginning in the 1970s, their work
looked behind the brute fact of
unemployment to consider how
would-be employers and employees
could really find each other and what
stopped that happening. This allowed
assessment of the impact of govern-
ment policy on unemployment. So
Pissarides was keen to stress yesterday
in relation to Greece, where unem-
ployment is at a 10 year high, that its
problem is made worse by regulation,
including, ironically, strong job pro-
tection laws that discourage firing
and hence hiring.
Pissarides also referred to the con-
clusion of his 1992 paper, Loss of Skill
During Unemployment, which shows
how an acute unemployment shock
can become chronic if the unem-
ployed lose their skills by not continu-
ing to engage with the workplace.
The trade unions now planning to
hold the coalition to task might also
reflect that in 2003 Pissarides
explained the relatively lower unem-
ployment in Britain compared to else-
where in Europe in part by “the
decline of trade union power”.
Christopher A. Pissarides (top); Peter A.
Diamond (left); Dale. T. Mortensen (right)
The three winners who share
this year’s economics Nobel
PETER A. DIAMOND
Diamond has written extensively on
social security, including a book co-
authored with Peter Orszag, President
Obama’s former director of the Office of
Management and Budget, in 2005:
Saving Social Security: a balanced
approach. His work is important in public
finance, welfare economics and many
other areas.
Diamond received his PhD from MIT in
1963 (his thesis adviser, Robert M. Solow,
also won the Nobel Prize in Economic
Sciences, in 1987). This spring, Diamond
CHRISTOPHER A. PISSARIDES
Pissarides' most influential paper is
arguably “Job Creation and Job
Destruction in the Theory of
Unemployment (with Dale Mortensen)”,
published in the Review of Economic
Studies in 1994.
Christopher Pissarides is Professor of
Economics at the London School of
Economics and holder of the Norman
Sosnow Chair in Economics. He specialis-
es in the economics of unemployment,
labour-market theory, labour-market poli-
cy and more recently he has written
DALE T. MORTENSEN
Dale T. Mortensen is the Ida C. Cook
Professor of Economics at Northwestern
University. His research and teaching
interests are in labour economics, macro-
economics and economic theory.
Mortensen pioneered the theory of job
search and search unemployment and
extended it to study labour turnover,
research and development, personal rela-
tionships, and labour reallocation. His
insight, that friction is equivalent to the
random arrival of trading partners, has
become the leading technique for the
CITYA.M. 12 OCTOBER 2010
was nominated by President Obama to
serve on the Board of Governors of the
Federal Reserve, the central bank of the
United States. The nomination is still
pending confirmation.
Diamond is the fourth person to win the
Nobel while a member of MIT’s
Department of Economics. The others are
Paul A. Samuelson (1970), Franco
Modigliani (1985), and Solow.
Born: 1940, New York, NY, USA
Affiliation at the time of the award:
Massachusetts Institute of Technology
(MIT), Cambridge, MA, USA
about growth and structural change. He
has written extensively in professional
journals and his book Equilibrium
Unemployment Theory, now in its second
edition, is a standard reference in the
economics of unemployment.
In 2005 he was awarded the IZA Prize
in Labor Economics (jointly with Dale
Mortensen) for his work on unemploy-
ment.
Born: 1948, Nicosia, Cyprus
Affiliation at the time of the award:
London School of Economics and Political
Science, London, United Kingdom
analysis of labour markets and the
effects of labour market policy. The
development of equilibrium dynamic
models designed to account for wage dis-
persion, the time series behavior of job
and worker flows, and economic growth
through product innovation are the prin-
cipal topics of his current research.
He is the 2005 co-winner of the IZA
Prize in Labor Economics
Born: 1939, Enterprise, OR, USA
Affiliation at the time of the award:
Northwestern University, Evanston, IL,
USA
CITYA.M. 12 OCTOBER 2010
French defend
line on hedge
funds from US
▲
HEDGE FUNDS
BY HARRY BANKS
FRANCE’S stand on European plans
for hedge fund regulation does not dis-
criminate against funds from outside
the EU, Paris has told the US, and off-
shore funds should be subject to super-
vision by a European watchdog.
France, citing fears of insufficient
regulation, refused with German back-
ing a few weeks ago to back adoption
of new hedge fund rules that would
give funds outside of the EU area a
licence or passport to do business
across all 27 EU states.
In a letter to US counterpart
Timothy Geithner, French economy
minister Christine Lagarde responds to
recent US grievances, saying the sys-
tem France supported was “neither
protectionist... nor discriminatory”.
But by also referring in the letter to
a potential phasing-in of EU licenses
for foreign funds to work across
Europe, Lagarde could have been leav-
ing the door open to a deal addressing
Washington’s chief concern about the
new EU rules.
“We believe that awarding a pass-
port to offshore funds is not satisfacto-
ry as they would not be subject to the
same regulatory provisions as EU
funds on many issues ranging from
the governing law and competent
court, the capacity to obtain enforce-
ment or a judgement, the professional
requirements and financial liability of
auditors to valuation rules,” it says.
“If however a passport for offshore
funds was to be adopted, France
believes that such a passport should be
truly European,” Lagarde says, adding
it was important such funds register
with and be supervised by a European
body.
“This would also parallel the
approach adopted under the Dodd-
Frank act which requires funds advis-
ers to be registered by the SEC (US
watchdog),” Lagarde says in the letter.
It remains unclear whether Britain
would accept Lagarde’s conditions for
any deal, namely a new EU watchdog
rather than national supervisors
should police the bloc’s hedge funds.
Christine Lagarde and Timothy Geithner
KEY POINTS ON PROPOSED HEDGE FUND LEGISLATION
• The draft law does not lay down rigid
rules, such as a cap on hedge-fund bor-
rowing or pay, but sets up a framework
for watchdogs to police hedge funds and
private equity firms.
• Most significantly, the law would put
hedge funds under the supervision of a
pan-EU regulator, one of three new
watchdogs setting up from January. The
watchdog could demand information
about how funds invest or borrow
money. It could also intervene with trad-
ing curbs, such as a ban on short-selling.
• Think tanks and finance experts are
sceptical about whether the regulator
will have sufficient clout to make power-
ful hedge funds adhere to the rules.
• At the heart of the row about how the
rules should look is a passport scheme
or licence for foreign hedge funds to do
business throughout Europe.
Governments and lawmakers are divid-
ed over the issue, with many in favour of
keeping the current system, which
requires foreign funds to apply for per-
mission to sell to investors on a country-
by-country basis. The US says refusing a
passport unfairly blocks foreign funds.
• Under the draft being considered, EU
countries want hedge funds to inform
authorities of how and why they have
borrowed money to invest. This could be
shared with other watchdogs.
• They also want to give supervisors
power to limit borrowing at a hedge
fund if they see a threat to the financial
system. EU lawmakers are pushing for
even more stringent borrowing limits.
• The law would extend the range of
information hedge funds are required to
hand over, such as what products and
on which markets they are trading as
well as outlining key exposures.
• For example, a fund could be told to
News 15
Picture: REUTERS
reveal its short-selling positions, some-
thing most would be reluctant to do in
case the information were to fall into
the hands of rivals. The information
would be shared among watchdogs
around Europe as well as a new market-
risks supervisor, based in Frankfurt.
• The authorities would be given powers
to demand documents from hedge
funds, to quiz managers, and to probe
telephone or data records as well as
launch surprise on-site checks.
• A system of guardians will monitor
what is happening to investor money at
a hedge fund as well as safeguarding
the investments it has made.
• Lawmakers hope this would prevent
sham investment schemes like that run
by Bernard Madoff.
• The law would also impose a loose pay
code on hedge-fund managers, stagger-
ing earnings over a number of years.
 16 Economics
BCC voices its
concern over
the recovery
▲
ECONOMICS
BY JESSICA MEAD
BRITAIN’S economic recovery is rapid-
ly running out of steam and the gov-
ernment and the Bank of England
will need to take robust action to pre-
vent a double-dip recession, the
British Chambers of Commerce (BCC)
will warn today.
The BCC’s quarterly economic sur-
vey showed that the UK economy
slowed considerably in the three
months to September following
unusually strong growth recorded in
the second quarter.
Although manufacturers were at
their most confident about revenues
since the third quarter of 2007, their
profitability confidence declined by
three points to 23 per cent.
Results from the service sector
showed performance to be worse
than the manufacturing sector, with
key indicators such as employment
expectations and investment all slow-
ing.
David Kern, chief economist at the
BCC, said: “The dismal performance
of the service sector is particularly dis-
turbing, since it occurs even before
VAT is due to rise to 20 per cent and
before the full impact of the tough
deficit-cutting measures takes effect.”
The BCC’s director general David
Frost said that the focus should shift
from cuts to supporting UK economic
growth. He also added that the gov-
ernment would need to support capi-
tal investment in crucial
infrastructure projects.
The BCC is also calling for support-
ive policies from the Bank of England
to reduce the risks of a renewed set-
back in the recovery.
Kern warned: “The MPC should
seriously consider increasing the
quantitative easing programme to
£250bn before the end of 2010 to
enhance the economy’s ability to
cope. Reducing threats of a double-
dip recession must be the main policy
priority.”
Bank of England MPC member
Adam Posen echoed this sentiment in
a speech two weeks ago.
A lack of buyers is pushing down prices
RICS: Further falls in UK
house prices is expected
ECONOMICS
▲
BY JESSICA MEAD
ESTATE agents are predicting that
house prices will fall even further,
according to the September housing
market survey from the Royal
Institution of Chartered Surveyors
(RICS), which is published today.
A growing supply of new properties
acted as a drag on the current price
balance with a net 36 per cent of
estate agents reporting falling rather
Picture: Micha Theiner/City A.M.
than rising prices. A net 41 per cent
expect prices to fall even further.
RICS spokesperson Ian Perry said:
“The fresh influx of property to the
market combined with a lack of buy-
ers remains the key problem affect-
ing the sector.”
“Without sufficient demand prop-
erty prices continue to slip back.
However, many areas are reporting a
correction rather than dramatic falls
in prices. It’s very much a buyers’
market at the moment,” he added.
CITYA.M. 12 OCTOBER 2010
Poor consumer
confidence hits
the High Street
ECONOMICS
▲
A LACK of confidence among con-
sumers has resulted in lacklustre
retail sales growth over the past six
months while next week’s
Comprehensive Spending Review is
unlikely to boost optimism among
spenders.
Retail sales values rose just 0.5 per
cent last month on a like-for-like
basis from September 2009, when
sales had risen 2.8 per cent. This is
contrary to expectations, which had
expected some improvement on
August’s one per cent like-for-like
sales growth.
Although food inflation helped
boost like-for-like food sales values by
2.1 per cent in the three months to
September, non-food sales were down
on a year ago for the first time since
mid-2009, the BRC said.
Stephen Robertson, director gener-
al of the BRC, said: “With VAT higher
than it was last year, and pushing up
sales values, it’s an even worse per-
formance than it looks. There is little
evidence yet of major purchases
being brought forward from 2011 to
beat the coming VAT increase.”
“Despite widespread discounting,
sales of major items had the toughest
time. It’s clear people are cautious
and major spending is largely on
hold,” he added.
CITYA.M. 12 OCTOBER 2010 News 17

Virgin Active limbers up

with laundry acquisition
towels a month. ual supply of towels.
▲

LEISURE
BY PHILIP WALLER
FITNESS group Virgin Active has
saved a towel and laundry supplier
from collapse, safeguarding 30 jobs.
The gym operator has bought H20
Leisure Services, which went into
administration last month.
H20, based in Neasden, north
London, supplies Virgin’s 50 clubs in
the capital, which use more than 1m
Virgin said it decided to buy the
business after receiving comments
from customers that the towel service
needed to be upgraded.
Virgin Active UK chief operating
officer Scott Hood said: “We did not
expect to be running a laundry busi-
ness at this point, but this move
shows our commitment to going the
extra mile to ensure we give members
what they need – in this case a contin-
“We’re pleased to have safeguarded
over 30 jobs in a business that was
suffering in these tough times.”
Virgin Active runs 71 health clubs
across the UK, including the flagship
City sites at Bank and Barbican. In the
last financial year the company’s
earnings rose 18 per cent to £101.1m,
on a 15 per cent rise in revenues to
£391m. Member numbers rose 4 per
cent to 919,000. Virgin Active has seen membership numbers surge Picture: PA

NEWS | IN BRIEF
Norway to UK gas pipeline opens
The first transport of gas from the Gjoea
and Vega fields offshore Norway began
on Sunday with the opening of the Gjoea
pipeline, Norwegian North Sea infra-
structure operator Gassco said yesterday.
“First gas began to flow on 10 October
through the Gjoea gas pipe,” Gassco said,
adding that first deliveries would begin
when the platform becomes operational.
The 80-mile pipeline, which has a capaci-
ty of some 17m cubic metres (mcm) per
day, will transport gas from the fields to
the St Fergus terminal in Scotland via the
Shell-operated Flags transit system.
Gjoea is estimated to have recoverable
reserves of 82m barrels of oil and con-
densate and 40bn cubic metres of gas,
according to field co-operator Statoil.
The other operator, GDF Suez, said regu-
lar production at the Gjoea field would
start in the fourth quarter of 2010.
 18 News CITYA.M. 12 OCTOBER 2010

Greece stalls on bailout loan FFastFill wins contract

said on Sunday that bailout loans to sion. “If at one point the decision is
with Bahrain Exchange
▲

WORLD ECONOMY
Greece could be stretched out or taken it must come as a reward for the
BY HARRY BANKS replaced if refinancing worries lin- good work we’re doing and not
GREECE is discussing prolonging the gered in markets, but it currently has because we could not achieve our tar- munity of banks and brokerage firms.

repayment of a €110bn (£96bn) EU/IMF
bailout deal, finance minister George
Papaconstantinou told Greek Skai tele-
vision yesterday.
“It is an ongoing discussion, there is
no decision but this is completely dif-
ferent from the issue of restructuring
of the Greek debt,” Papaconstantinou
said.
The International Monetary Fund
no concrete plans to do so.
“This discussion has started because
everybody sees that for two specific
years – 2014 and 2015 – the state goes
suddenly from paying off €40bn to
€50bn a year to €70bn,”
Papaconstantinou told Skai’s News
Files show.
Papaconstantinou said Greece had
not officially asked for such an exten-
gets, because then it would send the
wrong message to markets,” he said.
The IMF spokeswoman said there
were no concrete plans at this time for
such moves because of recent improve-
ments in investor sentiment toward
Greece. Papaconstantinou also said
this year’s budget deficit would reach
about eight per cent of GDP from
about 14 per cent last year.
▲
FINANCIAL SERVICES
DERIVATIVES software provider,
FFastFill, has signed an agreement
with the Bahrain Financial Exchange
(BFX) to offer vendor software to the
exchange and its users.
FFastFill, which supplies Software
as a Service (SaaS) to the derivatives
community, said that it will provide
the BFX with connectivity to its com-
BFX’s clients will have access to a
list of FFastFill’s trading capabilities
and products, including multi-asset
trading and clearing functionality of
fixed income, foreign exchange, equi-
ty, contract for difference, across
futures and options contracts.
The BFX is the first multi-asset
exchange in the Middle East and
North Africa region.

Jaguar Land BEST OF THE BROKERS

ANALYSIS l Nokia
8 €
7.88
11 Oct
NOKIA
Goldman Sachs issues a “neutral” rating for
Nokia as the broker thinks the phone group
NEWS | IN BRIEF
Aardman records post tax profit
City A.M. said yesterday Aardman
Holdings, the firm behind Wallace &

Rover exec to 7.6

7.2

6.8
will continue to trade in-line with near-
term earnings momentum, which it
believes is turning positive. However, the
broker says the long-term risks to Nokia’s
smartphone share remain high and warns
Gromit, swung from a £1m profit to a
£2.5m loss last year. This is a pre-tax
figure and Aardman has asked us to
clarify that tax credits worth £2.9m
pushed the firm back into the black.
After other taxation was deducted the

quit next year 12 Jul 30 Jul 19 Aug

ANALYSIS l Prudential 628.50
660 p

620
8 Sep 28 Sep

11 Oct
the stock could prove a “value trap”.

PRUDENTIAL
JP Morgan Cazenove cuts Prudential to
“underweight” from “neutral” and doesn’t
firm recorded an after tax profit of
£92,780. This dropped from £760,000
the year before.

Air Partner wins DFID contract

Air Partner is to become the sole
provider of all passenger and freight air
of Jaguar and Land Rover to Indian
see much upside in the current share price. charter services for the government’s
▲

AUTOMOTIVE The broker thinks the Pru seems to have

BY PHILIP WALLER
LUXURY car maker Jaguar Land Rover
yesterday said the boss of its Jaguar
arm is leaving next year as the compa-
ny continues to review the future of its
UK manufacturing operations.
Jaguar Land Rover said the manag-
ing director of Jaguar Cars, Mike
O’Driscoll, 54, will retire at the end of
March 2011 after 35 years with the
company. O’Driscoll took up his post
in 2007 after Ford announced the sale
Ralf Speth, chief
executive of Jaguar
Land Rover, said he
wished O’Driscoll “the
very best for the future”
group Tata. Tata named Ralf Speth as
the new chief executive of the unit in
February.
Last year, Tata announced a review
of the future of its Land Rover and
Jaguar plants at Solihull and Castle
Bromwich in the West Midlands,
where it employs about 7,000 people.
A plant at Halewood on Merseyside,
which has been chosen to make Land
Rover’s new Evoque model, is unaffect-
ed by the review. A spokesman said the
firm had not yet made any decisions
about the future of the factories or a
successor to O’Driscoll. “We don’t have
any news at this time,” he said.
Meanwhile, rival marque Aston
Martin – which was also owned by
Ford and was sold to an investment
group in 2007 – said it planned to start
making a new city car next year.
580 department for international develop-
avoided the worst pitfalls that have hurt ment (DFID) for the next four years. The
540 some in the industry and raises its 2010 new contract, which is effective immedi-
pre-tax operating profit forecast by 10.6 ately, will see Air Partner provide logisti-
500 cal support to the DFID’s global aid
per cent but expects a flat 2011. assignments. It won the contract after a
12 Jul 30 Jul 19 Aug 9 Sep 29 Sep six-month tendering process. The DFID
ANALYSIS l SABMILLER SABMILLER is responsible for humanitarian airlifts
2,050 p 2020.50 Nomura hands SABMiller a “neutral” rating on behalf of the UK.
11 Oct
and thinks that short-term expectations of Newsweek in Beast tie-up talks
2,000
a renewal of volume growth towards the US weekly magazine Newsweek and the
1,950 company’s medium-term guidance may be Daily Beast news website are exploring
unrealistic. The broker still expects mixed possibilities to combine their operations
1,900 and the likelihood of a deal is increasing,
news flow in the key markets with the it is understood. A deal would make Daily
1,850 impact of the VAT increase in Colombia Beast co-founder and co-owner Tina
holding back better revenues. Brown the editor of Newsweek on top of
12 Jul 30 Jul 19 Aug 9 Sep 29 Sep her existing editorial duties at the web-
To appear in Best of the Brokers email your research to notes@cityam.com site. Sidney Harman bought Newsweek
from The Washington Post in August.

YouGov boosts UK profits after success Compass finance boss set

of instant polling and general election to join Enterprise Inns
YouGov chief executive Stephan However, the firm reported a loss Smith will move to Enterprise Inns
▲

MEDIA
INCREASED appetite for instant
polling results and the general elec-
tion helped YouGov post a 60 per cent
hike in annual UK operating profits,
the pollster said yesterday.
YouGov reported UK operating
profit of £3.4m in the year ending 31
July, on UK revenues that were nine
per cent higher at £12.1m.
Shakespeare said: “The US and UK
have both delivered strong perform-
ances, confirming the strength of the
core YouGov model which is now at
the focus of our strategy.”
Global revenue was flat at £44.2m,
after a reduction in spend by some
big clients, expecially in the Middle
East, helped offset improved perform-
ance in the US and UK.
before tax of £9.6m, after exceptional
costs of £13.4m, including a goodwill
impairment charge of £7.9m on its
German subsidiary.
Numis Securities analyst Dominic
Buch said: We believe that building
on the success of the core UK busi-
ness, its innovative techniques and
technologies will underpin contin-
ued demand for its products.”
LEISURE
NEIL Smith, finance director at
Compass Group, has been appointed
as chief financial officer of Enterprise
Inns.
He is taking over from David
George, who will step down from the
post at the end of January after a 20-
year stint in the role. He joined the
pub group at its inception in 1991.
at the start of the new year and will
go through a transition period with
George before his full appointment to
the board on 20 January 2011.
He joined Compass, the food servic-
es group, three years ago.
Prior to that Smith held various
finance positions at Somerfield,
Telewest Global and NTL. He is a fully
qualified accountant.
CITYA.M. 12 OCTOBER 2010 News 19

Wood Group heralds pick-up Qinetiq sells US security

boost its performance in the second for the full year would meet expecta-
business to ManTech
▲

ENERGY
half and in 2011. tions.
BY HARRY BANKS The company, which supplies plat- Wood said longer-term fundamen-
OIL and gas services contractor John forms, pumps, valves and pipelines tals of the oil and gas service and ManTech, one of the US govern-

Wood Group yesterday forecasted a
pick-up in its engineering business
in the second half of the year as oil
and gas companies launch more
projects.
Wood expects higher levels of
potential work and recent contract
wins, such as the detailed design for
Chevron’s Jack and St Malo deepwa-
ter facility in the Gulf of Mexico, to
used in oil drilling, said the gas tur-
bine services market remained rela-
tively weak, but growing demand
and cost-cutting would boost the
division’s second half performance.
The group said its power division
had recently won a $150m deal in
California, helping to boost orders in
2011.
It said it believed its performance
▲
DEFENCE
gas-fired power generation markets
remained strong. DEFENCE firm Qinetiq has completed
“We are well positioned to deliver the sale of its US security and intelli-
good medium term growth,” the gence services (S&IS) business, to
group said. ManTech International for $60m
Shares in Wood Group, which (£37.7m).
have risen 39 per cent since the start The deal will see the disposal of
of the year, ended yesterday up Qinetiq’s American service, which
20.5p, or nearly five per cent, higher provides security solutions to the US
at 449.90p. Department of Defence.
ment’s leading providers for security
technology, has agreed to buy S&IS
for cash, with expectations that the
deal will generate $40m of net pro-
ceeds after tax.
The deal, which was announced
yesterday, was completed late last
week and will see S&IS incorporated
into ManTech’s mission, cyber and
technology solutions division.

City workers expect ALL ABOARD

higher bonus in 2010

last year. seeing some of it deferred. Only 28
▲

RECRUITMENT
BY MATTHEW WEST
CITY workers are approaching the
bonus season with more confidence
than they were last year thanks to an
improvement in the financial servic-
es job market, according to two new
reports.
City recruitment company
Morgan McKinley found 88 per cent
of City workers expected to receive a
bonus, up six per cent from last year,
while 73 per cent expect their bonus
to be equivalent to at least 30 per
cent of their annual salary.
Morgan McKinley found City job
opportunities increased 23 per cent
year-on-year from 3,843 jobs in
August 2009 to 4,725 in September
2010.
Meanwhile, a survey by careers
website eFinancialCareers.com
found 57 per cent of City workers
expected their bonus to be higher
than last year, while one in five
believe their bonus will be over 50
per cent higher than a year ago.
The majority (51 per cent) of
bankers also believe most of their
bonus will be paid in cash despite
per cent appear to know whether
their firm has a clawback policy, said
the website.
The survey results come as JP
Morgan Chase prepares to report its
third quarter earnings tomorrow,
which typically include details of its
bonus pool, effectively beginning
the bonus reporting season.
NEW l Morgan McKinley Bonus Survey
& September Employment Monitor
Significantly higher
41.2%
Higher

A total of 48 per cent expect their
bonus to be higher than last year,
while 41 per cent expect it to be
about the same.
A further 72 per cent of City pro-
fessionals say they are more confi-
dent about their job prospects than
%
the recommendation by the Stay the same
Financial Services Authority (FSA) Lower
that cash payments should be limit-
Significantly lower
ed to less than 50 per cent of a total
I did not recieve a bonus in 43.7%
bonus. the last round (2009/10)
Half of City workers also expect to
receive their full bonus rather than Source: Morgan McKinley
6.0%
1.5% THE QUEEN has officially named Cunard's 92,000-tonne Queen Elizabeth liner, the cruise
3.5%
4.0% company’s third new ship in six years. The monarch named the vessel in a quayside cere-
mony at Southampton. Cunard ordered the ship to meet growing demand for cruise holi-
days, with 1.5m Britons booking last year. The ceremony came 72 years after the Queen
watched her mother launch the first Queen Elizabeth. Picture: PA

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

Throgmorton
The professional services group has hired Roger
Looker, the former chair of Harlequins rugby
club, as a non-executive director, and Adam
Hewitson as its new internal legal counsel.
Looker, pictured, previously founded two cor-
porate finance boutiques, Gilbert Elliot
Corporate Finance and Stafford Corporate
Consulting, and chaired Harlequins for a decade
between 1987 and 1997.
Hewitson joins from law firm Shoosmiths.
Cordea Savills Internos as its new chief financial offi-
The property fund management group cer.
has hired Richard James from rival James was chief financial officer at
Internos, which he joined in December
2009 when it acquired GPT Halverton,
where he had been CFO since the previ-
ous year.
Prior to that, he worked at Curzon
Global Partners as an executive director
and at Apollo Real Estate Advisors as
European financial controller.
F&C Investments
Alice Evans has joined F&C as a senior
fund manager in its global thematic
equities team.
Evans joins in November from
Henderson, where she was latterly part
of a team responsible for a number of
socially responsible investment funds.
She will manage F&C’s flagship
Stewardship International Fund, along-
side head of global thematic equities
Sophie Horsfall. Her appointment
comes as part of the firm’s commit-
ment to grow its credentials in environ-
mental, sustainable and governance
investing.
Principal Global Investors
The asset manager has appointed Philip
Garcia as its new head of client rela-
tionship management in London.
Garcia joins from T. Rowe Price,
where he managed the firm’s largest
European client relationships and spe-
cialised in US equity mandates.
Prior to that, he spent 20 years at
Towers Perrin.
eXpansys
Brian Collie has joined the online elec-
tronics retailer, chaired by bank grandee
Bob Wigley, as a non-executive director.
Collie is currently chairman of the
Jurys Inns hotel group. He previously
worked with lastminute.com founders
Brent Hoberman and Martha Lane Fox
from before its stock market listing in
2000 until its sale in 2005, which he
oversaw as chairman.
He was also group retail director and
a board member at airport operator
BAA from 1997 to 2005.

To appear in CITYMOVES please email your career

SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
updates and pictures to citymoves@cityam.com morganmckinley.com
 20 News WORDS BY STEVE DINNEEN CITYA.M. 11 OCTOBER 2010

Twilight distributor aims to put a

stake through the heart of rivals
The world’s top
independent media
producer and
distributor sets its
sights on acquisitions
LAST month Entertainment One chief
executive Darren Throop was being served
cocktails by a vampire. Nearby, a werewolf
dressed only in a pair of tattered denim
shorts performed an elaborate handstand.
He was celebrating the release of one of
the year’s biggest movies, the latest install-
ment of the Twilight Saga, at a lavish
party at the Foreign and Commonwealth
Office. His firm owns distribution rights
to the smash-hit – a major coup for an
independent company, albeit the biggest
of its kind in the industry.
That Entertainment One can pull in
rights for a movie of this financial (if not
theatrical) importance, is a statement of
intent from a firm that has only recently
graduated to the main London Stock
Exchange listing.
Throop, energetic and engaging, with a
genial Canadian accent, has more than 20
years experience in the entertainment
industry, working his way up from owner
of an independent music store in Toronto.
Under his leadership, Entertainment
One has grown exponentially, bouncing
back strongly from the recession. Last year
the firm swung to a £6.9m pre-tax profit
on revenue of £444.2m after a loss of £31m
the year before. A recent trading state-
ment forecast first half revenues will grow
by 20 per cent and Throop says the for-
ward momentum looks set to continue.
There are two distinct sides to the com-
pany. One is the feature film arm, which is
responsible for the distribution and pro-
motion of over 100 movies a year.
The company can collect anywhere
between 25 and 40 per cent of revenue
from box office and DVD receipts. For a
modestly successful movie, such as this
year’s An Education, the firm can expect
to pull in “a couple of million” after it has
recouped its costs. So far this year the firm
has released 60 movies and, with the
busiest period still ahead, it is on track to
top last year’s total of 127. “Did they all
work? Of course not. But we have more
winners than losers.”
The other side of the business is its TV
production arm. This takes advantage of a
unique Canadian tax-credits system that
allows it to compete with major US pro-
duction houses for the top slots on the big
networks. It has scripted, developed, shot,
edited, produced and distributed shows
including Rookie Blue (“Grey’s Anatomy
CV | DARREN THROOP
1991: Founded an independent record
chain in Toronto.
1999: Sold the firm to CDPlus.com, a firm
he later joined.
for cops – it’s the most successful ABC
show in the last six years”), Stephen King
adaptation Haven, hit drama Hung and
family animation Peppa Pig, the number
one rated kids show in the UK.
Throop, 45, says each episode of quality
drama costs in the region of $2.5m (£1.6m).
Surely this represents a significant risk,
especially given the cut-throat US TV cul-
ture, where a show can be axed after only a
handful of episodes. “Not at all, there is vir-
tually no risk for us,” he says. “Financially
we’re completely covered because we don’t
green-light anything unless it’s been sold to
a network, which pays for about a quarter
of the production cost.”
Crucially, after selling to a network, the
firm can access the tax credits system
which provides it with funding for an
additional 50 per cent of the per-episode
cost, giving it a massive competitive edge.
The network holds a five year broadcast
license but Entertainment One continues
to hold DVD and new media rights in the
US and broadcast rights to the rest of the
world. “And that is where the revenue
model is. We use our sales arm to sell it to
all the international broadcasters. If a
show doesn’t get picked up for a second
season there really is no deficit. We’re not
Entertainment One like Hung, which is on its third season,
chief executive Darren becomes very valuable indeed. All the
Throop expects strong international broadcasters want it
forward momentum because it has been successful in the US.”
to continue next year The family entertainment arm works
slightly differently, he says. “It’s all about
brand. Take Peppa Pig. How much do we
get for the show in license fees? Not
enough to make it commercially viable.
But what you have is merchandising
rights.” Last year Peppa Pig sold £100m
worth of toys in the UK alone.
But even with this vast production net-
work, the firm has resisted producing fea-
ture films in its stable. “Why? Because it’s
risky,” he says. “We’re a very risk adverse
business. For a commercially viable fea-
ture the budget is between $30m and
$100m. A lot more fail than they do suc-
ceed. As a distributor we are taking very
limited risk. If they don’t deliver the mas-
ter, we don’t pay anything. If their costs go
from $10m to $100m, we don’t care.”
As the film and TV industries begin to
“The creative emerge from the recession, Throop says his
focus is on international expansion. “We
minds in the want to get more co-production deals in
the UK so we can use your creative minds,
UK are quite which quite frankly are the best from a TV
standpoint. I would like to have a much
“Episodic TV
margins are
huge if a
second and
third season
of a series is
ordered – up
to 80 or 90
per cent.”
ANALYSIS l Entertainment One
90
p 85.50
11 Oct
85
80
75
70
12 Jul 30 Jul 19 Aug 9 Sep 29 Sep
improved. There are a lot of distressed
assets on the market right now and some
that are not distressed but strategically
would make good sense for us. We should
be back in business this year.”
This, he says is the main reason behind
the firm’s step up to the main London
market in July. “When we get acquisitive
again we’re going to need access to capital
and this will be made easier by a bigger
constituency of shareholders. The simple
fact is, a lot of institutional investors just
won’t invest in AIM listed firms.”
While the recession may have put the
brakes on Entertainment One’s shopping
spree, Throop says it has had a perversely
beneficial effect on the company. A chain
of events that was in turns lucky and tacti-
cally astute allowed the firm to extinguish
a large chunk of its debt. A convertible
bond on its balance sheet was sold to a
fund that went bust, forcing it to sell it on
the cheap. Throop swooped and picked it
up for just 35 cents in the dollar.
This is not the only positive effect the
recession has had – there are far fewer com-
petitors in the market, which has driven
down the cost of bidding for film rights.
“If you look at our territories, we’re the
top independent in all of them. This isn’t

2001: CDPlus.com acquired by Records on

Wheels. Throop takes over as chief execu-
tive of new entity.
2003: Records on Wheels rebrands as
Entertainment One and lists in Toronto.
Hobbies: Ice hockey, music, film, spending
time with his wife and two daughters.
Lives in Toronto.
losing anything.”
Working out how much the firm stands
frankly the
to make from a series is a tricky question,
says Throop, as the profitability of the
best in the
product changes over time. “The first sea-
son is about getting eyeballs on the prop-
world. We
erty,” he says. “The second season makes
the first season more valuable and the
want to up
third makes both the first and second sea-
sons more valuable. Episodic TV margins
production
are huge if it gets to the second and third
season, up to 80 or 90 per cent. So things
here.”
bigger production base in the UK.”
To achieve this Throop plans to restart
just because we’re great operators, it’s part-
ly because a lot of our competitors were
the acquisition drive he was forced to
abandon during the recession.
weakened by the recession and they didn’t
have the access to capital or the banking
“Up until 2008 I don’t think you could
have found a more acquisitive company.
relationship with JP Morgan that we did.
We were resilient and now we need to drive
We were involved in three or four big
deals a year. The recession and the impact
home that advantage.”
With dozens of movies due to premier
on equities stopped our acquisitive trajec-
tory. You can expect to see that getting
over the next three months, there will be
plenty of parties for Throop to attend.
back on course again now debt markets
are in good shape and equities have
With the company performing as it is,
there is a lot to celebrate.
 Investment
A SECOND QE
WILL COST
THE FED DEAR
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
T
he next Federal Open Market Committee
(FOMC) meeting is a month away. Judging
from the dollar, investors expect further
stimulus from the US Federal Reserve.
Equities began their current rally following the
Fed Chairman’s speech at the end of August.
Then, Ben Bernanke stated that the FOMC was
ready to step in again and provide further mon-
etary accommodation “especially if the outlook
were to deteriorate significantly”. Just a few
months earlier, talk focused on the best way for
the Fed to reduce its balance sheet. But follow-
ing a run of poor data, the odds on a strong US
recovery were lengthening. It was also apparent
that the private sector was in no state to drive
growth.
So now, every disappointing number sees
the dollar sell off and stocks head higher on an
increasing likelihood of further quantitative
easing (QE). There has been another shift in Fed
language which suggests that a second round
of QE could be launched even without an obvi-
ous weakening in data. Just over a week ago,
FOMC vice chairman William Dudley said that
given the Fed’s dual mandate of pursuing full
employment while maintaining price stability,
“the current situation is wholly unsatisfactory”.
St Louis Fed President James Bullard
attempted to play down market expectations
of QE2 in November. In an interview last Friday
he said that the risk of a double-dip had reced-
ed, that a decision over QE2 would be a “tough
call”, and that the first estimate of third quar-
ter GDP would be important.
Equity markets have soared on the prospect
of QE2, but investors have to ask themselves if
this is the right response. After all, the first
bout of QE was supposed to be the answer to
the economy’s ills and comes at an high cost.
Realistically, for the Fed to step in and plug the
hole left as the private sector deleverages and
pays down debt, it will take considerably more
than a couple of trillion dollars.
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21
Earnings season should
bring upside surprises
Low expectations
will be easy to beat,
writes Juliet Samuel
T
HIRD quarter earnings season is
already well underway in the US
with Alcoa last week reporting bet-
ter-than-expected figures. And with
the latest earnings reports being readied
for the laminator in Europe this week,
many analysts are anticipating a run of
consensus-beating results. In light of very
low company guidance, contracts for differ-
ence (CFD) traders could stand to benefit
from carefully targeting upside surprises.
The case for a lacklustre set of results
stems from the view that the year’s first-
half momentum cannot be maintained.
IHS Global Insight’s Howard Archer expects
sluggish investment limited by “apprecia-
ble excess capacity, relatively limited final
demand, and serious concerns and uncer-
tainties among companies over the longer-
term strength of the recovery,” he says. Not all surprises are scary Picture: GETTY
But despite official guidance staying on
the low side, many analysts are in fact revis- In addition to watching the bottom line, could move share prices around, particular-
ing their views upwards. it is worth keeping an eye on some addi- ly in sectors where consolidation is antici-
In a recent note, RBS’s Graham Bishop tional indicators. ETX Capital’s Manoj pated such as mining and pharmaceuticals.
and Ian Richards predict that earnings will Ladwa says traders should watch for “signs Caution is warranted because equities do
follow the same pattern as in previous of costs continuing to come down, rev- not always move in direct relation to earn-
quarters, delivering upside surprises due to enues going up – not just inventory restock- ings news – particularly with so many
having been overly restrained by company ing but demand – and the question of what macro-economic concerns still plaguing
guidance. Moreover, while beaten expecta- companies are going to do with their cash.” investors. But for careful traders, earnings
tions are then factored into revisions of In particular, it is worth looking out for any season should provide fertile ground for
past data, they are not fully reflected in intentions regarding acquisitions, which profit-seeking.
forecasts going forwards. Because results
are measured against previous quarters or TIMELINE | UK THIRD QUARTER EARNINGS
the equivalent quarter last year, Bishop says
that this is, in effect, “an indirect down-
grade, which doesn’t make any sense”. ● Today ● Thursday 21 October
Aside from this technical reason for bet- Punch Taverns, Flybe Debenhams, GlaxoSmithKline
ting on stocks with unduly low forecasts, ● Thursday 14 October ● Friday 22 October
the combination of at least some positive WH Smith, Playtech BSkyB, Clinton Cards
economic growth and cost-savings made ● Friday 16 October ● Thursday 28 October
during the recession should prop up profits Avanti Communications Group, John Lewis AstraZeneca, Royal Dutch Shell
– contrary to overall third quarter forecasts ● Tuesday 19 October ● Friday 29 October
in the US, for example, which aggregate to Whitbread Shire
around a 3 per cent quarter-on-quarter ● Wednesday 20 October ● Tuesday 2 November
decline in earnings per share (aggregate Home Retail Group BP, Imperial Tobacco
data in the UK is harder to come by because
not all firms report quarterly).
Get started at
gftuk.com.
 Who next?
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CITYA.M. 12 OCTOBER 2010 Investment | Contracts for Difference 23

Barking up the
wrong tree: a
spotty record
for Dow’s dogs
This contrarian tactic employing the Dogs of the Dow tactic has
had only limited success in outperforming
is not necessarily the either the Dow or the S&P 500 over the
past 15 years – see chart. It is also expensive
most profitable one, for contracts for difference (CFD) traders to
follow the contrarian Dogs of the Dow
writes Jessica Mead because the overnight financing charges
quickly mount up if you hold positions for
a year, warns City Index’s Joshua
Raymond. He adds that it is risky to bet

T
HERE is no such thing as the Holy
Grail of investing or trading; there is
no strategy that guarantees you an
endless stream of profits. But if you
are looking for an approach which doesn’t
require you to be a mathematical or tech-
nical genius, then there are some medium-
term strategies that have enjoyed some
degree of success.
The Dogs of the Dow is a famous invest-
ment strategy that was the brainchild of
American money manager Michael
O’Higgins in the early 1990s. His theory
involves buying – usually on the first day
of the year – an equal share in the 10 high-
est-yielding stocks of the Dow Jones
Industrial Average and then holding these
stocks for a year.
The rationale is simple: Dow con-
stituents are large cap, blue-chip stocks so
they are unlikely to go bankrupt and are
liquid. The highest yielding stocks have
fallen out of favour because investors
demand a higher-than-average dividend
payout to buy the stock. Assuming mean
reversion, these shares should, on average,
outperform.
But while it is a logical approach,
ANALYSIS l Dogs of the Dow
50 %
40
30
20
10
0
1995 1996 1997 1998 1999 2000
-10
-20
-30
-40
-50
Dogs
against an outperforming market: “There
is a reason why ‘the trend is your friend’ is
a well-known saying in the market.”
However, there are alternatives for CFD
traders, which are less expensive to
finance. One is Croatian investor Tomo
Helman’s Dogs of the Seasons strategy,
which recommends buying just four
stocks in mid-October and then selling
them in April or May. This particular strat-
egy capitalises on the seasonality of the US
stock market and picks four stocks from
the Barron’s 400 index that are fundamen-
tally under-priced. It uses technical analy-
sis to dictate the precise entry and exit
points.
Last year, his picks gained 18.72 per cent
as opposed to 10.99 per cent for the S&P
500. And in 2008-2009, when stock mar- Dogs don’t always
kets were particularly volatile, his portfo- behave the way
lio managed to rise 2.7 per cent compared you want
to a 9.6 per cent drop in the wider index. Picture: PA
Another option open to CFD traders is to
go long on the 10 worst-performing stocks
in the Dow Jones (or indeed any other mean, giving the underperformers a boost way to make money in the markets but all
index such as the FTSE 100) and sell the 10 and knocking back the top flight. This of these strategies have potential. Just
best-performing stocks. This strategy would give you the flexibility to hold the don’t be disappointed if the 2010 Dogs
assumes that investments revert to the stocks until you think they have reverted have more bark than bite.
to fair value. Nonetheless, there is the risk
that they are underperforming or overper- DOGS OF THE DOW | 2010 CANDIDATES
forming for good reason and that this
trend will continue at your expense. COMPANY YIELD (%)
For this reason, pairs trading is popular
among CFD traders. The strategy matches a AT&T 5.85
long position with a short position in two Verizon 5.73
stocks of the same sector, whose prices are DuPont 4.87
usually highly correlated but which have Kraft 4.27
2001 2002 2003 2004 2005 2006 2007 2008 2009 seen a recent divergence. For example, BP Merck 4.16
suffered a lot more in the wake of the oil Chevron 3.53
well disaster than Royal Dutch Shell. The McDonald's 3.52
two stocks are usually highly correlated so Pfizer 3.52
in the medium-term the two stocks ought Home Depot 3.11
to revert to the existing relationship.
S&P 500 DJIA There is certainly no easy or guaranteed Boeing 3.10

THE One of the world's largest providers of

engineering, design and information man-
agement solutions Aveva Group has its pre-
TIPSTER liminary report due on Wednesday. The
company has offered a stellar performance
GOOGLE SHARES so far this year, with its shares climbing 50
COULD PROVIDE per cent to a high of 1,504p just a week
ago. Since then profit taking has slipped to
AN EASY RALLY its 60 day moving average at 1,392p, but
look to buy around the 1,350p level for a
fresh assault on the all-time highs of
level around $41.50. Spread Co currently
offers is a spread of $39.80–$39.87.
Consolidation is underway for the travel
industry as it struggles its way out of the
recession. Thomas Cook’s announcement of
a merger with the Co-op Group could create
a formidable force in the sector, becoming
the UK’s largest travel agency. ETX Capital
is quoting 189.37p-189.53p for the CFD.
The UK’s largest pub and bar operator
Punch Taverns has its annual report due

T
HE search giant Google has seen its
share price rallying hard since the start
of September, helped somewhat by
recent broker upgrades. Google’s global
audience has the potential to be recession
proof. With this in mind there is something of
an expectation for the company to deliver the
goods on Thursday -- at least virtually -- when
third quarter earnings are announced. After
its recent gains there is a temptation to book
some quick profits. The current IG Markets
price on Google is $536.31-$536.35.
1,640p. Spread Co offers a spread on Aveva
Group of 1,391p-1,395p.
Across the water, the global financial
services giant JPMorgan Chase also
reports its third quarter earnings on
Wednesday and investors will be looking for
an update on the decline in loan losses and
whether the company will reveal a possible
timeframe for reinstating their dividend
payment. There is a very solid support level
around the $39 level, so now might be a
good time to buy for a run at the resistance
out on Tuesday. Its shares are trading at
their highest level for four months. The CMC
Markets spread is 91.281p-91.769p.
Burberry’s share price has had a storm-
ing year, outperforming almost every other
stock in the market. But the good times
cannot roll forever. With results due on
Wednesday and a winter of austerity
around the corner it might be time to take a
view on the downside of the stock price.
Capital CFDs is quoting 1,033.7p-1,038.3p.
Donata Huggins Google is so global it could be recession proof
 24 Markets & Investment CITYA.M. 12 OCTOBER 2010

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Aegis . . . . . . . . . . . . . . . . . . . . .125.70 +0.80 137.30 103.10 Debenhams . . . . . . . . . . . . . . . . .68.95 +1.15 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .345.00* –1.00 372.30 157.30
Afren . . . . . . . . . . . . . . . . . . . . . 118.40 +3.60 119.10 76.50 Derwent London . . . . . . . . . . . .1580.00* +5.00 1633.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .573.50* +3.00 579.50 416.70 Scottish Mortgage. . . . . . . . . . . .649.50 +9.50 656.00 475.00
African Barr Gold . . . . . . . . . . . .612.50 –4.00 685.00 520.50 Dexion Absolute . . . . . . . . . . . . .139.30 –0.10 148.00 131.20 Land Securities . . . . . . . . . . . . . .674.00* +3.00 743.50 543.00 SEGRO . . . . . . . . . . . . . . . . . . . .290.60* –1.40 389.90 244.00
Aggreko . . . . . . . . . . . . . . . . . .1601.00* +14.00 1639.00 715.00 Diageo . . . . . . . . . . . . . . . . . . . 1113.00* +6.00 1176.00 930.50 Legal & General . . . . . . . . . . . . .103.70 +0.10 106.60 69.05 Serco . . . . . . . . . . . . . . . . . . . . .610.50* +0.50 656.50 491.20
Alliance Trust . . . . . . . . . . . . . . .344.00* +4.30 352.70 292.80 Dimension Data . . . . . . . . . . . . . 119.80 +0.20 125.50 68.75 Lloyds Banking Gp . . . . . . . . . . . .73.80 +0.40 79.15 45.30 Severn Trent . . . . . . . . . . . . . . .1332.00 +5.00 1404.00 939.50
AMEC . . . . . . . . . . . . . . . . . . . . .996.50 –1.00 1024.00 728.00 Dixons Retail . . . . . . . . . . . . . . . .27.50 +0.07 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .130.70* –0.20 149.10 100.80 Shaftesbury . . . . . . . . . . . . . . . .455.80 –1.90 462.30 348.00
Amlin . . . . . . . . . . . . . . . . . . . . .406.50 +2.00 437.60 350.80 Domino’s Pizza . . . . . . . . . . . . . .467.90 +6.40 484.70 278.20 London Stk Exchange . . . . . . . . .681.50 +2.50 949.50 540.50 Shire. . . . . . . . . . . . . . . . . . . . .1437.00 –1.00 1532.00 999.00
Anglo American . . . . . . . . . . . .2732.50 +6.50 3015.50 2133.00 Drax . . . . . . . . . . . . . . . . . . . . . .385.90* +5.40 479.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1808.00 –11.00 2198.00 1344.00 Smith & Nephew . . . . . . . . . . . . .572.50 +1.00 700.50 525.50
Antofagasta . . . . . . . . . . . . . . .1268.00 –4.00 1344.00 755.50 Dunelm . . . . . . . . . . . . . . . . . . . .440.10 +19.60 447.30 305.00 Man . . . . . . . . . . . . . . . . . . . . . .257.00 +6.60 373.60 199.60 Smith(Ds) . . . . . . . . . . . . . . . . . .162.50 +0.10 164.50 103.00
Aquarius Platinum . . . . . . . . . . .377.00 +5.00 490.00 211.50 Easyjet . . . . . . . . . . . . . . . . . . . .454.30 +2.70 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .405.70 –5.30 415.00 321.90 Smiths . . . . . . . . . . . . . . . . . . .1255.00 +19.00 1280.00 885.00
ARM Holdings . . . . . . . . . . . . . . .381.20 –0.80 419.50 143.00 Edinburgh Inv Tst . . . . . . . . . . . .429.20 +4.10 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .304.80 +0.50 331.00 229.80 SOCO Intl . . . . . . . . . . . . . . . . . .454.70 +8.70 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .360.60 +11.20 361.10 215.00 Electrocomponents . . . . . . . . . . .244.80 +1.10 251.00 144.80 Melrose . . . . . . . . . . . . . . . . . . .290.90 +2.20 293.70 160.00 Spectris . . . . . . . . . . . . . . . . . . 1105.00 — 1125.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3294.50 +21.00 3389.50 2668.00 EnQuest . . . . . . . . . . . . . . . . . . .127.90 +2.10 128.00 87.35 Mercantile IT . . . . . . . . . . . . . . . .973.50* +7.50 1002.00 822.50
Atkins(Ws) . . . . . . . . . . . . . . . . .767.00 +16.00 801.00 532.50 Essar Energy . . . . . . . . . . . . . . .483.40 –1.80 510.00 358.50 Michael Page Intl. . . . . . . . . . . . .480.30* +14.00 481.40 316.70 Spirax-Sarco Eng . . . . . . . . . . .1819.00 +3.00 1859.00 1060.00
Autonomy Corp . . . . . . . . . . . .1485.00 –35.00 2012.00 1278.00 Eurasian Nat Res . . . . . . . . . . . .926.00 +19.00 1276.00 801.00 Micro Focus . . . . . . . . . . . . . . . .371.20 +3.20 550.00 272.20 Spirent Comms . . . . . . . . . . . . . .144.40 –0.30 146.30 86.50
Aveva . . . . . . . . . . . . . . . . . . . .1391.00 –12.00 1504.00 856.50 Euromoney Inst Inv . . . . . . . . . . .598.00 –7.00 630.00 371.80 Millen & Copthorne . . . . . . . . . . .538.50* +11.00 547.00 321.40 Sports Direct Intl . . . . . . . . . . . . .144.30 –0.70 148.00 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .399.50* –1.00 473.50 290.20 Experian . . . . . . . . . . . . . . . . . . .684.50 +13.00 698.50 527.00 Misys . . . . . . . . . . . . . . . . . . . . .290.20 +0.50 298.00 196.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1157.00 –2.00 1190.00 616.00
Babcock International . . . . . . . . .577.00 +3.50 660.50 489.00 Ferrexpo . . . . . . . . . . . . . . . . . . .334.00 +2.50 396.20 140.70 Mitchells & Butlers . . . . . . . . . . .301.60 +3.10 343.90 228.30 St James’s Place . . . . . . . . . . . . .276.30 +2.00 298.00 203.40
BAE Systems . . . . . . . . . . . . . . .355.80 +3.90 389.90 288.10 FirstGroup . . . . . . . . . . . . . . . . .372.70 +1.00 428.40 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .194.70 +2.20 257.00 187.60 Stagecoach. . . . . . . . . . . . . . . . .183.50 +1.40 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .264.20* +1.50 304.80 228.60 Foreign & Col Inv Tst. . . . . . . . . .291.60 +1.00 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .541.00 +4.50 545.50 304.70 Standard Chartered . . . . . . . . . .1870.00 +38.50 1946.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .298.30 +1.05 394.25 253.40 Fresnillo . . . . . . . . . . . . . . . . . .1242.00 –6.00 1333.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .328.90 +2.90 329.20 265.00 Standard Life . . . . . . . . . . . . . . .232.20* +2.30 237.00 170.00
Barratt Development . . . . . . . . . . .93.45 –0.50 178.75 89.10 G4S . . . . . . . . . . . . . . . . . . . . . .253.90* — 285.70 228.40 Morrison Wm . . . . . . . . . . . . . . .301.10* +3.90 307.10 255.00 SuperGrp . . . . . . . . . . . . . . . . .1090.00 –42.00 1312.00 499.00
BBA Aviation . . . . . . . . . . . . . . .194.50* +2.30 220.00 145.90 Genesis Emerging Mkts Fd . . . . .523.50 +5.00 527.00 370.00 Murray Intl Tst . . . . . . . . . . . . . . .914.50 +10.00 922.00 720.00 TalkTalk . . . . . . . . . . . . . . . . . . .141.50 +1.30 153.80 106.60
Bellway. . . . . . . . . . . . . . . . . . . .593.00 +12.00 842.50 510.00 GKN . . . . . . . . . . . . . . . . . . . . . .176.50 +0.70 178.30 100.40 National Express. . . . . . . . . . . . .234.00 –2.20 258.60 155.86 Talvivaara Mining . . . . . . . . . . . .532.50 +12.50 547.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .836.50 +14.50 949.50 735.00 GlaxoSmithKline . . . . . . . . . . . .1298.50 –5.00 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .570.00 +6.00 607.65 474.80 Tate & Lyle . . . . . . . . . . . . . . . . .492.80 +5.80 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . . 1157.00 +4.00 1248.00 966.90 Great Portland Estates . . . . . . . .353.80 –1.00 368.60 236.60 Next . . . . . . . . . . . . . . . . . . . . .2231.00 +12.00 2360.00 1733.00
BHP Billiton . . . . . . . . . . . . . . .2149.00 –11.50 2346.00 1618.50 Greene King . . . . . . . . . . . . . . . .421.30 –1.80 484.00 372.50 Northumbrian Water . . . . . . . . . .334.50 +0.30 353.00 225.20 Taylor Wimpey . . . . . . . . . . . . . . .26.68 +0.13 46.34 24.29
BlackRock Mining . . . . . . . . . . . .664.50 –3.50 672.50 475.00 Halfords . . . . . . . . . . . . . . . . . . .398.00 –2.00 562.50 370.10 Ocado Grp . . . . . . . . . . . . . . . . .128.90 –0.50 169.00 127.80 Telecity . . . . . . . . . . . . . . . . . . . .504.00 +4.80 546.00 322.40
BlueBay . . . . . . . . . . . . . . . . . . .353.70 +2.70 393.00 251.00 Halma . . . . . . . . . . . . . . . . . . . . .338.00 +12.20 340.60 218.40 Old Mutual . . . . . . . . . . . . . . . . .142.40 +1.60 143.40 95.30 Templeton Emrg Mkts . . . . . . . . .641.00 +8.00 648.00 455.00
Bluecrest Allblue GBP . . . . . . . . .169.50 +0.20 170.00 149.00 Hammerson . . . . . . . . . . . . . . . .414.70 –2.70 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .284.00 +3.00 339.70 205.80 Tesco . . . . . . . . . . . . . . . . . . . . .439.65 +3.25 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .50.35 — 51.60 37.50 Hargreaves Lansdown . . . . . . . .447.50 +1.50 478.00 259.40 Pearson . . . . . . . . . . . . . . . . . .1000.00 +5.00 1069.00 780.00 Thomas Cook . . . . . . . . . . . . . . .189.60* +3.90 277.20 167.50
BP . . . . . . . . . . . . . . . . . . . . . . .432.35 –3.50 658.20 296.00 Hays . . . . . . . . . . . . . . . . . . . . . .121.40 +3.50 121.70 82.50 Pennon . . . . . . . . . . . . . . . . . . . .587.00* +4.00 616.50 440.40 Travis Perkins . . . . . . . . . . . . . . .854.50 –9.50 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1033.00 — 1045.00 709.00 Henderson . . . . . . . . . . . . . . . . .133.20 +1.20 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .378.20 +3.80 520.00 335.90 TUI Travel . . . . . . . . . . . . . . . . . .223.30 +0.60 313.90 189.20
British Airways . . . . . . . . . . . . . .268.40 +4.20 268.50 172.40 Heritage Oil. . . . . . . . . . . . . . . . .352.20 +6.20 585.00 295.90 Petrofac . . . . . . . . . . . . . . . . . .1428.00* +35.00 1446.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .413.80 +14.70 436.20 261.20
British Amer. Tob . . . . . . . . . . .2388.50 +14.00 2439.00 1832.00 Hikma Pharma . . . . . . . . . . . . . .715.00* +8.50 813.00 452.20 Petropavlovsk . . . . . . . . . . . . . . .999.50* –20.50 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1300.00* +24.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .483.60 +2.60 485.50 338.50 Hiscox . . . . . . . . . . . . . . . . . . . .349.10 +1.60 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .677.00* –8.00 775.00 550.50 UK Commercial Prop. . . . . . . . . . .78.50 –0.10 84.90 70.60
British Land . . . . . . . . . . . . . . . .489.50* –2.60 515.00 416.00 Hochschild Mining . . . . . . . . . . .465.00 — 497.80 220.00 Premier Farnell . . . . . . . . . . . . . .281.10* +0.40 283.80 140.60 Ultra Electronics . . . . . . . . . . . .1747.00 +6.00 1774.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .457.50 +7.20 518.00 341.50 Home Retail . . . . . . . . . . . . . . . .215.50 +0.30 326.30 201.70 Premier Oil . . . . . . . . . . . . . . . .1706.00 +18.00 1717.00 984.00 Unilever . . . . . . . . . . . . . . . . . .1794.00 –20.00 2024.00 1662.00
BSkyB . . . . . . . . . . . . . . . . . . . .709.00 –1.00 732.00 521.00 Homeserve . . . . . . . . . . . . . . . . .466.00 +2.40 502.00 422.00 Provident Financial . . . . . . . . . . .827.50 +7.50 986.00 795.00
BT . . . . . . . . . . . . . . . . . . . . . . .146.90 –2.10 153.00 108.40 HSBC Hldgs . . . . . . . . . . . . . . . .661.90 +3.70 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .628.50 –8.00 665.00 475.70 United Utilities . . . . . . . . . . . . . .587.00 — 620.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .763.50 +2.50 784.50 614.00 Hunting . . . . . . . . . . . . . . . . . . .640.00 +5.00 661.00 429.10 PZ Cussons . . . . . . . . . . . . . . . .379.00 +2.30 383.00 231.70 Utd Business Media . . . . . . . . . .617.50* +4.50 656.50 408.30
Burberry . . . . . . . . . . . . . . . . . .1038.00 +22.00 1065.00 513.00 ICAP . . . . . . . . . . . . . . . . . . . . . .461.60 +6.70 478.30 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . .109.20 +2.20 179.10 103.50 Vedanta Resources . . . . . . . . . .2215.00 –1.00 2967.00 1795.00
Cable & Wire Comms . . . . . . . . . .56.30 +0.65 150.00 53.00 IG . . . . . . . . . . . . . . . . . . . . . . . .541.50* +8.50 546.50 291.00 Randgold Resources. . . . . . . . .6455.00 –60.00 6755.00 3930.00 Victrex . . . . . . . . . . . . . . . . . . .1302.00 +16.00 1347.00 726.50
Cable & Wire Wwide . . . . . . . . . . .75.80 –0.45 94.80 60.05 Imagination Tech Gp . . . . . . . . . .413.00 +12.10 415.90 179.90 Reckitt Benckiser . . . . . . . . . . .3403.00 –54.00 3667.00 2971.00 Vodafone . . . . . . . . . . . . . . . . . .162.55 +1.35 164.95 126.50
Cairn Energy. . . . . . . . . . . . . . . .441.20 +9.20 497.60 306.80 IMI . . . . . . . . . . . . . . . . . . . . . . .813.50* +19.00 819.00 410.00 Reed Elsevier . . . . . . . . . . . . . . .550.00 +7.00 566.00 454.60 Weir . . . . . . . . . . . . . . . . . . . . .1580.00* +37.00 1614.00 639.00
Caledonia Invs . . . . . . . . . . . . .1692.00 +25.00 1759.00 1496.00 Imperial Tobacco. . . . . . . . . . . .1905.00 +11.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .85.50* +1.05 125.50 64.05 Wellstream Hldgs . . . . . . . . . . . .760.00* +1.00 810.00 429.70
Capita . . . . . . . . . . . . . . . . . . . . .790.00* — 829.50 693.00 Inchcape. . . . . . . . . . . . . . . . . . .326.30 +1.50 347.00 235.00 Renishaw . . . . . . . . . . . . . . . . .1088.00* +3.00 1098.00 479.00 WH Smith . . . . . . . . . . . . . . . . . .463.60 +4.00 551.00 392.20
Capital & Counties . . . . . . . . . . .137.00* –1.50 139.50 99.60 Informa . . . . . . . . . . . . . . . . . . . .425.50 –0.10 439.40 263.30 Rentokil Initial . . . . . . . . . . . . . . .101.00 –1.70 140.20 91.15 Whitbread . . . . . . . . . . . . . . . . .1684.00 +26.00 1697.00 1215.00
Capital Shopping Centres . . . . . .386.40* –0.40 533.50 300.10 Inmarsat . . . . . . . . . . . . . . . . . . .644.00* +13.50 831.00 528.50 Resolution . . . . . . . . . . . . . . . . .248.20* +1.00 264.80 220.10 William Hill . . . . . . . . . . . . . . . . .171.50 +0.30 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .328.00* +0.20 361.90 272.00 Intercontl Hotels . . . . . . . . . . . . 1159.00 +5.00 1244.00 762.50 Rexam . . . . . . . . . . . . . . . . . . . .317.20 +0.30 348.80 271.40 Witan Inv Tst . . . . . . . . . . . . . . . .476.00 –0.50 487.00 396.30
Carnival . . . . . . . . . . . . . . . . . .2592.00 –8.00 2937.00 1876.00 Intermediate Capital . . . . . . . . . .314.50 +4.70 316.20 233.50 Rightmove . . . . . . . . . . . . . . . . .758.00 –4.00 796.50 456.90
Catlin . . . . . . . . . . . . . . . . . . . . .334.80 +5.80 394.60 303.20 Intertek . . . . . . . . . . . . . . . . . . .1844.00 +17.00 1863.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .3892.50 –43.50 4104.00 2631.00 Wolseley . . . . . . . . . . . . . . . . . .1565.00 –5.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .172.00 +5.60 194.40 103.50 Intl Personal Fin . . . . . . . . . . . . .288.30* +11.50 290.60 180.00 RIT Capital Partners . . . . . . . . .1144.00 +4.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .449.90 +20.50 450.90 279.60
Centrica . . . . . . . . . . . . . . . . . . .331.10* +3.50 347.00 236.30 Intl Power . . . . . . . . . . . . . . . . . .402.50* +3.00 407.70 248.20 Rolls Royce . . . . . . . . . . . . . . . .602.50 +2.50 631.50 434.50 WPP . . . . . . . . . . . . . . . . . . . . . .702.00* +5.00 744.00 528.00
Charter Intl . . . . . . . . . . . . . . . . .754.50 +3.50 855.50 563.50 Invensys . . . . . . . . . . . . . . . . . . .308.10 — 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1819.00 +7.00 1834.00 1101.00 Xstrata . . . . . . . . . . . . . . . . . . .1278.50* –17.50 1344.50 832.50
Chemring . . . . . . . . . . . . . . . . .3036.00 –17.00 3711.00 2551.00 Investec . . . . . . . . . . . . . . . . . . .512.50 +3.50 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .47.50 –0.11 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .750.00* — 803.50 657.00 ITV . . . . . . . . . . . . . . . . . . . . . . . .63.95 +0.55 71.75 41.04 Royal Dutch Shell A . . . . . . . . .1972.00 +7.00 2068.50 1621.00
Cobham . . . . . . . . . . . . . . . . . . .231.00 +3.10 278.60 205.50 Jardine Lloyd Thompson. . . . . . .579.50 +12.50 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1917.00 +19.00 1997.50 1550.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . . 119.10 +1.30 144.20 107.70 Johnson Matthey . . . . . . . . . . .1832.00 +16.00 1844.00 1354.00 RSA Insurance . . . . . . . . . . . . . .134.10* +1.00 142.00 114.10
Compass . . . . . . . . . . . . . . . . . .518.00 –2.50 574.50 382.00 JPMorgan Emerg Mkts . . . . . . . .600.00* +4.00 609.00 443.00 SABMiller . . . . . . . . . . . . . . . . .2020.50 +6.00 2090.00 1571.00 www.interactivedata.com

FTSE gains on hope of more Wall Street flat as

banking stimulus measures earnings awaited
double-dip recession is real or not,” bookmaker said third-quarter operat- per cent, to 1,165.32.
THELONDON Jimmy Yates, head of equities at CMC
Markets, said.
ing profit more than doubled, boost-
ed by betting on soccer’s World Cup THENEW YORK The Nasdaq Composite Index
gained 0.42 of a point, or 0.02 per

REPORT “Investors look to be pricing in fur-

ther QE, particularly in the US If that
doesn’t happen in November then we
and better win rates at its gambling
machines.
Smiths Group, rose 1.5 per cent to
REPORT cent, to 2,402.33.
The New York Stock Exchange said
about 160 stocks, including the New
could see a sharp retreat from cur- 1,255p, erasing two days of losses. UBS York-traded shares of London-based
In association with rent levels.”
The FTSE 100 is up almost 900
increased its price estimate on the
shares by 11 per cent to 1,550p.
In association with BP and China’s CNOOC, as well as
Ford and Sprint Nextel, did not close
points, or 19 per cent, since its 2010 BT Group, fell 1.4 per cent to until well after the official closing
closing low on 1 July. 146.9p, dropping for a second day. time of 4 pm EDT (2000 GMT), and the
Investors were also awaiting third- after Bernstein cut its rating to cause of the problem was under
quarter US corporate earnings, with “underperform” from “market per- investigation.

B U
ritain’s top shares rose yester- figures due among others this week form.” S stocks drifted in the lightest In an e-mail shortly before 5 p.m.
day as hopes that governments from Intel on Tuesday and JPMorgan Prudential slid 1.3 per cent to trading volume of the year yes- the exchange said all symbols had
around the world would take Chase on Wednesday. 628.5p for a second day. JPMorgan terday as few dared to place closed.
steps to bolster economic recov- “From the point of view of the equi- Chase cut its rating to “underweight” bets ahead of key companies' About 5.54 billion shares traded on
ery fuelled investor optimism. ty market, (quantitative easing) from “neutral,” saying “we don’t see results later this week. the New York Stock Exchange, the
Meanwhile, bullish broker com- would mean more stimulus ... and much upside in the current share Expectations the Federal Reserve American Stock Exchange and the
ment helped lift Petrofac and Weir the markets might just read that as price.” will flood markets with even more Nasdaq -- the lightest volume so far in
Group, while Prudential, Autonomy being good news for earnings or good BP slipped 0.8 per cent to 432.35p cash have been fully priced in to the 2010.
and BP were hit by broker down- news for growth,” Mike Lenhoff, chief as Royal Bank of Scotland cut its rec- market, so investors are now focused Advancing stocks outnumbered
grades. strategist at Brewin Dolphin, said. ommendation to “hold” from “buy.” on third-quarter earnings season, declining ones on the NYSE by a ratio
The FTSE 100 closed up 14.79 Petrofac rose 2.5 per cent, after the Autonomy slumped 2.3 per cent to with Intel scheduled for Tuesday. of about six to five.
points, or 0.3 per cent, at 5,672.40. It oil and gas services company won a 1,485p, dropping for a fourth day. The Last Friday’s unexpectedly weak The reverse trend took hold on the
closed 4.52 points or 0.1 per cent contract worth $250m with the gov- software company was cut to “hold” payroll report underlined the weak- Nasdaq, where about seven stocks fell
lower on Friday at 5,657.61. ernment of Sharjah in the UAE. from “buy” at Deutsche Bank . ness in some areas of the economy, for every six that rose.
In the US, economists overwhelm- The stock was also aided by a price and increased the expectation that Apple shares hit an all-time high of
ingly expect the Federal Reserve to target rise from Evolution Securities ANALYSIS l FTSE the US central bank will bolster the $297.24 in intraday trading before
embark on another round of quanti- following a Syrian site visit. 5,700 5,672.40 recovery with a second round of closing up 0.4 per cent at $295.36.
tative easing this year in an effort to Other broker comments were 11 Oct quantitative easing, or QE2. Chesapeake Energy rose 1.1 per
prop up a struggling economy behind a number of individual equi- Meanwhile, three Dow companies – cent to $23.30 after China’s top off-
plagued by high unemployment. ties moves, traders said. 5,500 Intel, JPMorgan Chase & Co and shore oil producer, CNOOC, agreed to
Late in September, economists Weir Group gained 2.4 per cent General Electric Co – are scheduled to pay $1.1bn for a stake in a US shale oil
polled by Reuters said the chances of after UBS upgraded its target for the 5,300 release quarterly results this week. and gas field, testing the US political
the Bank of England extending its engineering firm to 1,700p from The Dow Jones industrial average climate for the first time since its
quantitative easing scheme are on 1,400p, while repeating its “buy” rat- edged up 3.86 points, or 0.04 per cent, 2005 failed bid for Unocal.
the rise. ing. 5,100 to end at 11,010.34. The US-listed shares of CNOOC
“Governments need to be seen to Ladbrokes, rose for a seventh day, The Standard & Poor’s 500 Index advanced 1.7 per cent to end at
be proactive whether the threat of a increasing 2.3 per cent to 141.1p. The 12 Jul 30 Jul 19 Aug 9 Sep 29 Sep inched up just 0.17 of a point, or 0.01 $213.15 on the NYSE.
CITYA.M. 12 OCTOBER 2010
In association with Markets & Investment 25

Hunting growth on the frontiers as

the West sinks deep into solipsism
Plamen Monovski “I fear that
tells Juliet Samuel the West is
how the work-shy losing its
are ruining Britain’s historic
competitiveness ability to
adapt and
P
LAMEN Monovski doesn’t immedi-
ately come across as an aggressive
investor in some of the world’s least reinvent
explored markets. He sits almost
demurely at a table overlooking a sunny, itself”
12th-floor view of the City, sipping a cap-
puccino and speaking in genteel, accented
tones, often punctuated by a mild smile.
But don’t be fooled. Monovski has been
working as chief investment officer (CIO)
at Renaissance Asset Managers – the
wealth management arm of the Moscow-
based Renaissance Group – only since
February and has already overseen a bold
raft of fund launches. October’s lineup
includes two African equity funds and at
least two more to come in Eastern
European stocks and Russian debt.
“I was saying in 2004 that emerging
markets will be a better place to invest –
that they will be less risky,” he says. But
with the housing boom in full swing, few
wanted to hear about risks in the west. At
the time, this soft-spoken Bulgarian was
managing BlackRock’s emerging Europe
fund and I ask why he would have under-
stood the relative risks of different region-
al investments before others.
“I saw that in emerging markets, people
wanted to live better and were prepared to
do anything to get there,” he says, a note
of intensity entering his voice. “Here,
there is a sense of entitlement, that simply
because you’re born here, you’re better –
you’re more educated, you’re better
dressed, you deserve a living. But people
always underestimate the human factor: CV | PLAMEN MONOVSKI
you should invest in a place where people
will work hard.”
As we speak, it becomes clear that this is
part of a damning critique of western eco- Instead, he is convinced that the develop- Renaissance Asset mainstream as overly obsessed with polit- Age: 40
nomic vitality. Monovski laments that the ing world is the place to be – specifically, Managers’ CIO ical risk in the developing world: “There is Lives: London
financial crisis has shown how poor regula- areas like African “frontier” equities. But Plamen Monovski risk in every investment; emerging mar- Education: Masters in finance from the
tion is eroding the competitiveness of why is now the time to buy into these mar- kets are where it’s priced in,” he says. “And London School of Economics
advanced economies: “After the crisis, the kets, given ill-fated previous attempts like Picture: when people talk about political risk, they Career:
developed world went into widespread New Star’s “Heart of Africa” fund? Micha Theiner never talk about what Obama did to BP. 1997 – Mercury Asset Management,
Keynesian behaviour of dubious effective- “Then, prices were too high. But since /City A.M. They never talk about a 50 per cent tax Eastern European team
ness, flooding the markets with liquidity. the crisis in 2008, asset prices have stayed rate driving business offshore.” 1998 – continued at Merrill Lynch
The emerging market world responded low in Africa – they didn’t recover in 2009. He believes that there are some risks Investment Managers, which bought
with supply-side economics, measures that There has been growth in the mean time, worth taking, in other words, and others Mercury Asset Management in December
are long-term and capital-friendly. It under- but not in equity.” Instead, he says, African that speak to a long-term degeneration in 1997
stood that you need to earn more money, earners are putting their money into bank economic fundamentals. As advanced 2006 – BlackRock and Merrill Lynch
not redistribute what you do not have.” accounts and bonds, creating a fledgling economies struggle to jumpstart growth
And then there’s “the human factor”: credit market that will contribute to by firing up the printing presses,
Investment Managers merge. At
“Such a large part of the population here growth. And with infrastructure projects Monovski is not hopeful: “An economy is BlackRock, Monovski co-managed the
is dependent on the state. They have no already underway in dozens of countries, like a household: right now, the mum and BlackRock’s flagship Emerging Europe
aspiration and think they are entitled to including a huge modernisation drive in dad have lost their job and the kids are Fund, which peaked at $9bn in assets
be given a living.” Russia, Monovski is optimistic. wondering what to buy on the credit under management.
To his mind, it makes no sense to put Most investors would raise an eyebrow card,” he says, shaking his head. “I fear 2009 – left BlackRock
money in countries where the population at the idea of putting money into Nigerian that the ability of the West to adapt and 2010 – joined Renaissance Asset
is determined to tax and regulate large- power generation or quasi-state operations reinvent itself is being lost for a long Managers as CIO
scale wealth creation into the ground. in Russia, but Monovski dismisses the time.”

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 Lifestyle
26 CITYA.M. 12 OCTOBER 2010

| Restaurant WORDS BY
TIMOTHY BARBER

Fine dining at the Royal Exchange

The City’s historic
venue may lack buzz,
but adventurous food
is a good antidote
Sauterelle
Royal Exchange, Bank, EC3V 3LR
www.danddlondon.com 020 7618 2483

FOOD hhhii
SERVICE hhhhi
ATMOSPHERE hhhii
Cost per person without wine: £42

D
ESPITE the grandness of its architec-
ture, its lofty dimensions, the pres-
tige of its retail outlets and, above
all, its illustrious place at the heart
of the City’s history and culture, as a place
to socialise or entertain the Royal
Exchange is strangely uninspiring.
Perhaps there’s just no getting away from
the fact that, essentially, it’s now a shop-
ping centre, and shops – no matter how
high-end – are an atmosphere killer. The
Grand Café out on the courtyard floor has
all the cosy ambience of an airport bar sur-
rounded by duty free shops.
Up in Sauterelle, the restaurant on the
mezzanine level, you’re at least in the
Club Class lounge, sitting in tranquil com-
fort while looking out on those making
the most of their lot down below. It’s inti-
mate enough, even cosy in its soft blue
chaired, purple carpeted way, but still
feels a little dull and anonymous.
That isn’t stopping chef Robin Gill
doing boldly sophisticated things with an
elegant take on rustic European cooking.
Take, for instance, a plump slice of sea
bream fillet served with a leaf of greenest
savoy cabbage, a smudge of butternut
squash puree and pile of bulgur wheat
mixed with nuts and raisins. This was the
perfect seasonal dish: the wholesomeness
of the nutty bulgur wheat – lightened by
gentle hints of dill – and the splendid
orange and sweetness of the butternut
squash all seemed as nostalgically autum-
nal as kicking one’s feet through a pile of
crisp brown leaves. Meanwhile a scallop
served with a sliver of suckling pig and
toasted cauliflower puree was equally
accomplished, the moist pork almost as
light and smooth as the puree.
THREE OTHER RESTAURANTS NEAR THE ROYAL EXCHANGE
TIMOTHY BARBER
It’s all done with considerable finesse.
Gill falls over himself to go the extra visu-
al mile – funny-shaped plates with sepa-
rate elements of the dish dotted around in
complicated patterns – while coming up
with unconventional combinations.
It’s a cooking style that’s perhaps a little
insistent in its demand that you be
impressed – I couldn’t see the point of the
little tubular curls of toast stuffed with a
herby prawn concoction which came with
a sous vide-cooked lemon sole. Apparently
they were an “inversion” of prawn toast,
but their dull taste added little. Actually
I’m not very sure of the point of cooking
such a delicate fish as sole sous vide (vacu-
um-sealed and warmed in a water bath) –
the white filet was mushy and a bit tepid,
but tasted as sole should, with a dash of
silky beurre noisette.
My dining partner went for a plate of
different parts of Devonshire lamb – little
sections of rump, sweetbread and belly,
served in a bowl with tomatoes, olives, a
lorry-load of borlotti beans and a parsley-
infused salsa verde that was so glowingly
verde it seemed to hum with vitality. Every
supple, pink piece of lamb was sweet,
juicy and alive with gutsy flavour.
After that, the choices for dessert were a
little disappointing: just four options (plus
cheese), and unlike the other courses,
seemingly stuck in the previous season. It’s
all about fruit – poached white peach,
chilled watermelon soup, panna cotta with
strawberries, banana and walnut cake. My
companion went for the panna cotta,
which wobbled like a jelly and was too stur-
dy by half. My cheese selection was fine.
The service was friendly and assured,
and you can’t argue with the good value
of a three-course set menu for £23.
Above, the view from
Sauterelle into the FOOD & BOOZE
courtyard of the Royal
Exchange. NEWS
TIMOTHY BARBER
BAR BATTU OPENS ON GRESHAM STREET
The City’s latest bar and bistro to open is Bar
Battu on Gresham Street (it used to be
Molloy’s). For décor, think loft-style chic:
exposed brick walls, reclaimed wood flooring,
industrial lights and plenty of banquettes.
Chef Sydney Aldridge, an alumnus of Galvin
Bistrot de Luxe, is offering dishes like snail
and ox cheek ragout, crab and celeriac
remoulade and prune tart with Armagnac.
48 Gresham Street, EC2V 7AY
www.barbattu.com
CHOCOLATE MEETS WINE
In honour of the fact that this week is
National Chocolate Week, Covent Garden’s
exceedingly romantic gem of a restaurant,
Clos Maggiore, is running a menu pairing
chocolate and wine (£95 including wine). The
six-course menu includes roasted foie gras
with poached rhubarb and dark chocolate,
pan roasted halibut with white chocolate and
caviar beurre blanc, and roasted veni-
son fillet with a bitter chocolate
sauce, all matched with particular
vintages from Clos Maggiore’s rather
fabulous cellar. 3 King Street, WC2E
8JD www.closmaggiore.com

OXO TOWER’S NEW BAR

RELAIS DE VENISE L’ENTRECOTE
The formula that’s made the Relais de Venise
restauarants a French institution could have been
made for the City – salad starter followed by a large,
perfectly-cooked steak and delicious frites.
Accordingly, L’Entrecote has become a Square Mile
institution in no time. 5 Throgmorton Street, EC2N
2AD. www.relaisdevenise.com
GREENS RESTAURANT AND OYSTER BAR
In the one-time HQ of Lloyds Bank on Cornhill, Greens
was opened by Simon Parker Bowles a year ago and
has brought back a sense of the Square Mile old school.
The Runner Bar – all neo-classical columns and luxuri-
ous crustacean bar – is ineffably grand, and the restau-
rant’s booths overlook the Bank of England itself.
14 Cornhill, EC3V 3ND. www.greens.org.uk,
IMPERIAL CITY
Arguably the Square Mile’s leading Chinese dining
room, Imperial City sits beneath the Royal Exchange
occupying its brick-vaulted cellars. A dramatically
atmospheric place to visit, its restaurant includes
influences from Japan and Malaysia as well as well-
made, classy Chinese staples. 1a Royal Exchange,
EC3V 3LL www.orientalrestaurantgroup.co.uk
Over on Southbank, those who
enjoy a stunning view while
downing cocktails will be able to
make the most of a new bar
opening in the OXO Tower next
month. The place will have an
interior in the style of classic
cruise liners, and a cocktail list
apparently inspired by Victorian
pleasure boats. OXO Tower
Wharf, Barge House Street, SE1
9PH www.harveynichols.com
CITYA.M. 12 OCTOBER 2010 Lifestyle 27

All aboard...a £10m private yacht

Last month’s Cannes of Princess – the LMVH-owned British boat-
maker – which was launching its new V52.
yacht show proved Times are good for the company, which
will next year be launching its biggest
that the super-luxe is boat to date, a long range, 105 ft cruising
yacht.
still in hot demand, Indeed, in a place like this, financial
concerns and recessions feel like a differ-
ent world. Champagne and foie gras
says Zoe Strimpel canapés carve a path through models
relaxing after their catwalk show, and the
crowd is the type that is able to afford not
dynamic Sunseeker is reminiscent),
Princess has always stuck to seaworthiness
The classic design of a
Princess yacht
set ripple with the finest woods and soft
furnishings; glossy mahogany tables,
and classic design instead of flashiness or
showy innovation. In fact, it’s positively
continues to appeal to
City suits and
linen loungers, spiral staircases and luxu-
rious beds. Each ship houses staff includ-
muted next to some of the other boats we
see, which have seahorse frescoes, trans-
entrepreneurs. ing maids, butlers, skipper and chef – in
addition to the weekly charter cost, tips
parent spiral staircases, multiple balconies
and seriously expensive art on board.
are around £6,000. There is no affordable
way to cruise in private on a super-yacht.
Despite stories of yacht-dumping as peo- What is it, then, that makes this
ple sought to cull their most indulgent superbly opulent market tick? Is there any
assets during the downturn, prices for lux- chance of making money off a yacht? Not
ury yachts have stayed high and demand really. What with the running costs of at

C
ANNES is just the place for a yacht
show – where else do azure waters
and extreme wealth collide in such
an exquisite feast of bling? Other
expos take place in Fort Lauderdale,
Miami and Dusseldorf, but only in Cannes
do glass cases full of De Beers diamonds
and Fendi trunk shows feel so natural
alongside the Ferretti, Pershun and Riva
yachts which cost from £65,000 per week
to charter and between £5m and £15m to
buy.
No yacht owner myself, I was the guest
only multi million pound boats, but also
bracelets that cost £40,000.
Princess itself is going from strength to
strength and has proven a British success
story in a world dominated by Italian
superyachts. Simon Clare, head of market-
ing at Princess, says: “Even in the down-
turn we’ve kept growing and investing.
We made a profit last year and we put it
straight back into people and investment.
No one else in the industry can say that.”
The Bentley of boats (versus the Ferrari,
of which the super-sleek, aggressively aero-
is very robust indeed. “People just want
the boats bigger and bigger,” says the beau-
tifully blond, tanned skipper showing us
around, who has been steering the super-
rich round the Med for seven years. Clare
adds: “The market for 90 ft-plus boats is
our strongest after the downturn. Owning
a yacht is the ultimate status symbol and
the bigger the better.” He says, predictably,
that the fastest growing customer base is
coming out of Asia, but Europe remains a
strong market too.
The new V52s on which we pass the sun-
least £800,000 per year, the charter costs
and the initial purchase price, you don’t
buy a boat to become rich. You’re rich
already.
But it’s a uniquely exclusive asset – not
only uniquely expensive, but parked at the
marina, not the driveway, so you can keep
a low profile about your multi-million
pound toy. “Yachts are always a good
time,” says Clare. “It’s a fantastic lifestyle –
I can’t think of anything better than to sit
in the middle of the sea in a boat like
ours.” www.princessyachts.com

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Liberty), with plum oil and apple
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down. Also great for a morning
skin-boost is the ultra-light Sjal
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anti-ageing and hidden oils for
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including kojic and azelaic. (£45, www.
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 28 Lifestyle | TV& Games CITYA.M. 12 OCTOBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm EastEnders; BBC News
8pm Holby City
9pm Traffic Cops
10pm BBC News
10.25pm Regional News
10.35pm CHOICE Tom Daley:
The Diver and His Dad
11.35pm FILM The Love
Letter: Comedy drama, starring
Kate Capshaw and Tom Selleck
1999; Weatherview
1.05am Sign Zone: See Hear 1.35am
Sign Zone: Digging for Britain
2.35am Sign Zone: Natural World
3.35am Sign Zone: The Big School
Lottery 4.35am-6am BBC News
6pm Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm Games Today: The ninth
day of the Commonwealth
Games in Delhi.
8pm MasterChef: The
Professionals: The competitors
prepare scallops and a souffle.
9pm CHOICE Whites
9.30pm Harry & Paul
10pm Later Live – with Jools
Holland
10.30pm Newsnight; Weather
11.20pm TOTP2
11.50pm Wonders of the Solar
System
12.50am BBC News
4am-6am BBC Learning Zone
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Emmerdale: Jimmy warns 7pm Channel 4 News 7pm Five News at 7
Carl to end his fling with Eve. 7.55pm 4thought.tv 7.30pm How to Take Stunning
7.30pm Live International 8pm Wedding House Pictures; Five News Update
Football: England v Montenegro 9pm CHOICE Ramsay’s 8pm Jack the Ripper: The First
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10.10pm ITV News 10pm Seven Days 9pm CSI: Miami
10.40pm London News 11.05pm 3 Minute Wonder: Frieze 10pm CSI: NY;
10.45pm International Football 11.10pm Trinny & Susannah: From Five News Update
Highlights: England v Boom to Bust 12.15am Late Night
11pm CSI: Crime Scene TOM DALEY: THE DIVER AND HIS
Poker 1.10am Beach Volleyball DAD BBC1, 10.35PM
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2.05am KOTV Boxing Weekly
11.45pm Swingtown 2.30am Superbike World 12am NCIS Jane Treays provides an intimate
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Powerboating 4.30am Show 5.30am-6am Home 4.20am The Hills 4.40am-

7pm Sky Sports News at
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International Football
10.30pm Football Asia 11pm
Masters Tennis 1am Football
Asia 1.30am Poker Million
3.30am Football Asia 4am-
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SKY SPORTS 2
7pm Challenge Series Golf
7.25pm Live International
Football 9.30pm Poker Million
11.30pm Polocrosse 12.00am
Wild Spirits 1am Polo
2am-6am Close
SKY SPORTS 3
6.30pm World Pool Masters
7.25pm Live International
Football 9.30pm The Ultimate
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2.30am Challenge Series Golf
Mountain Bike World 4.55am-
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BRITISH EUROSPORT
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5.30pm NFL: Monday Night
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International Football 10pm
International Football 1.30am
Press Pass 2010 2am Pardon
the Interruption UK 2.30am
UFC Unleashed 3.30am-6am
Live NHL Ice Hockey
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9pm Drop Dead Diva 10pm
Teen Mom 11pm Criminal
Minds 12am CSI: Crime Scene
Investigation 2am Charmed
3am Nothing to Declare
3.50am Pete Burns’ PA
Shopping
BBC THREE
7pm Total Wipeout 8pm Snog,
Marry, Avoid? 9pm Don’t Tell
the Bride: A Newquay surfing
enthusiast plans his
wedding. 10pm EastEnders
10.30pm Lip Service 11.30pm
Family Guy 12.15am Don’t Tell
the Bride 1.15am Lip Service
2.15am Bizarre ER 3.15am
Total Wipeout 4.15am-5.15am
Snog, Marry, Avoid?
E4
7pm Hollyoaks 7.30pm Friends
9pm Smallville 10pm The
Cleveland Show 11pm The
Ricky Gervais Show 11.30pm
King of the Hill 12am Scrubs
1am The Cleveland Show
1.50am The Ricky Gervais
Show 2.15am King of the Hill
2.35am Life Unexpected
3.15am What About Brian
6am Switched HEALTH
7pm Deliver Me 8pm Shrinking
HISTORY the World’s Heaviest Man:
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the Ancients 9pm Ancient a Hoarder 10pm Monsters WHITES
Discoveries 10pm Decoding the Inside Me 11pm I’m Pregnant BBC2, 9PM
and 55-Years-Old 11.30pm I’m
Past 11pm The Nostradamus Roland is besotted with a beautiful
Effect 12am Ancient Pregnant and Addicted 12am visitor, and tries to impress her with
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Detectives 2am Egypt 3am Monsters Inside Me 2am I’m Alan Davies and Darren Boyd.
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4am-5am The True Story 2.30am I’m Pregnant and
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8pm How Do They Do It? Story 4am Student Midwives
8.30pm How It’s Made 9pm 5am-6am Bringing Home Baby
Trawler Wars 10pm Deadliest
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COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
QUICK CROSSWORD
    

SUDOKU KAKURO
17 11 8 12 9 8  
22 23
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row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 7
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from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 28
   
above or to the left of it. 11 20
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8 Bring up (5)
9 Derive, evoke (5)
3 In that place (5)
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Using only the letters in the Wordwheel, you have final drops of a liquid (5)
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D M 10 Fireside mat (3)
5 Entertain (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters O 11 Gangway (5)
13 Perspiration (5)
6 Cause to become

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
O E 15 Engraving or
widely known (9)
7 Small shelter with an
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
G T carving in relief (5)
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18 Of imposing a guardsman (6,3)
QUICK CROSSWORD 9 3 5 9 1 8 height (5)
& + $ 1 7 6 & $ 1 7
9 8 6 1 6 3 2 4 SUDOKU         
20 Beverage (3)
12 Be prostrate (3)
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8 2 1 3 8 6 4 9          14 United Nations
4 2 8 9 7 5 21 Ermine in its brown agency (inits) (3)
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 Sport
29
BILLIONAIRE LIM EMERGES
AS RIVAL LIVERPOOL BIDDER
BUT REDS ADAMANT HIGH COURT
WILL OK NESV DEAL: PAGE 30

Westwood and Kaymer, men of the moment

C
ONGRATULATIONS are due to
Lee Westwood, who is set to
replace Tiger Woods as world
No1 later this month. It’s fantas-
tic news for a player who has been at
the top of his game for some time
now.
Westwood might not have finished
GOLF COMMENT high enough at the Alfred Dunhill
Links Championship at the weekend
SAM TORRANCE to overtake Woods immediately, but I
love the fact that he had a go, despite
struggling with an injury. He’s got a
great attitude.
All that remains for the
Englishman now is to win that elu-
sive first Major, but I’m sure that will
only be a matter of time.
Will losing top spot bother Tiger? I
don’t think so. He knew this was
going to happen months ago and if
he had wanted to avoid it he would
have played in more tournaments.
Another man I really want to pay
tribute to is Martin Kaymer, who
became the first player since Woods
in 2006 to win three tournaments in
a row with victory in the Dunhill at St
Andrews.
The boy is young – he’s still just 25
– but he has shown he has got class.
He demonstrated his huge quality in
the USPGA in August with some of
the birdies he achieved at Whistling
Straits.
I have played that course myself
and some of the shots he pulled off
were very, very hard indeed.
Kaymer, like his fellow German
Bernhard Langer, is also extremely
cool under pressure, as he showed in
wrapping up his first Major title.
He has developed into a superb
player even quicker than I expected.
With players like him and Rory
McIlroy coming through, the
European Tour looks in fine shape for
the future.

Oyepitan joy GAMES | IN BRIEF

100m champion tests positive
ATHLETICS: England’s Katherine
Endacott could be handed the 100m sil-

at winning ver medal after gold medallist Damola

Osayemi of Nigeria failed a doping test.
Osayemi, who was only promoted to
first after Australia’s Sally Pearson was
disqualified for a false start, tested posi-
tive for the banned stimulant methyl-

200m silver hexaneamine.

She has been provisionally suspended
until her B sample results are known
tomorrow, but if she too is excluded
Endacott will be in line for silver.
Endacott finished Thursday’s final in
fourth place but was promoted one spot
training I’ve had since 2004. I need a and given bronze following Pearson’s
▲

COMMONWEALTH GAMES
BY FRANK DALLERES few winters behind me. Hopefully expulsion.
next year and 2012 will be good for Natasha Mayers of St Vincent and the
ENGLAND’S Abi Oyepitan is targeting me.” Grenadines stands to take the gold if the
glory at the London Olympics in 2012 Silver was Oyepitan’s first major first major doping controversy of the
after finally cracking the big time by medal since the 2002 competition is confirmed.
winning 200m Commonwealth silver. Commonwealth Games in
Londoner Oyepitan, 30, has seen Manchester, where she was part of England into quarter-finals
her progress hampered by nagging the 4x100m relay team that won RUGBY SEVENS: England will play
injuries since reaching the final of bronze. Maduaka was narrowly beat- Samoa in the quarter-finals today after
the Athens Games in 2004. en into fourth place yesterday by seeing off Australia 21-19 to claim top
But she returned to form in style Canada’s Adrienne Power. spot in Group D.
yesterday in Delhi, outshining England’s second athletics silver of Former Saracens winger Dan Caprice
England team-mate Joice Maduaka the day went to pole vaulter Steve scored two tries as Ben Ryan’s men
and finishing second only to Cydonie Lewis, with team-mate Max Eaves clung on for a hard-fought and unex-
Mothersill of the Cayman Islands. claiming the bronze. pected victory.
Oyepitan put her improvement The win looked set to see them face
down to a sound preparation and C’WEALTH GAMES | MEDALS TABLE Kenya in the last eight but instead they
immediately set her sights on chal- will face the more daunting prospect of
lenging for medals on home soil in G S B Total Londoner Oyepitan No1 seeds Samoa, who lost 12-10 to the
two years’ time. 1. Australia 64 40 39 143 had not won a East Africans in their final group fixture.
“It’s amazing to get silver, but I 2. India 30 23 28 81 medal since the Scotland and Wales also made the
wanted to have go at Cydonie. She’s 3. England 27 49 35 111 2002 Games. quarter-finals and will take on South
got legs but I haven’t. Maybe next Africa and New Zealand respectively.
year,” said the Shaftsbury Barnet 4. Canada 23 15 28 66 Picture: GETTY The semi-finals and final are also sched-
Harrier. “This is the first winter’s 5. South Africa 12 11 9 32 uled to be played today.
 30 Sport | Football CITYA.M. 12 OCTOBER 2010

Results
INTERNATIONAL MATCH
Ukraine ..........................(0) 0 Brazil......................................(1) 2
Dani Alves 24
Reds expect
legal win to
Alexandre Pato 63
NPOWER LEAGUE 1
Swindon.........................(1) 2 Bristol Rovers.................(0) 1
Morrison 45 Hughes 90 (pen)
Pericard 57 Att: 9,065
COMMONWEALTH GAMES
SELECTED MEDAL EVENTS— Athletics, Men, 3000m

end Lim hope

Steeplechase Final: 1 R Kipkemboi Mateelong (Ken) 8mins
16.39secs, 2 E Kemboi Cheboi (Ken) 8:18.47, 3 B Kiprop
Kipruto (Ken) 8:19.65, 5 S Stokes (Eng) 8:32.24, 7 L Gunn
(Eng) 8:40.44. Pole Vault Final: 1 S Hooker (A) 5.6m, 2 S
Lewis (Eng) 5.6, 3 M Eaves (Eng) 5.4, 6 P Walker (Wal) 5.25,
8 A Strange (Sco) 4.95. 10,000m Final: 1 M Kipsiro (Uga)
27mins 57.39secs, 2 D Lemashon Salel (Ken) 27:57.57, 3 J
Kiptoo Birech (Ken) 27:58.58, 8 Ch Thompson (Eng)
28:50.47, 10 Andy Vernon (Eng) 29:44.91. Women, 200m
Final: 1 C Mothersill (Cay) 22.89secs, 2 A Oyepitan (Eng)
23.26, 3 A Power (Can) 23.52, 4 J Maduaka (Eng) 23.57, 5 L challenges to their authority: one
▲

Mcconnell (Sco) 23.68, 8 E O’neill (Wal) 23.88. 100m

FOOTBALL FINANCE
Hurdles Final: 1 S Pearson (A) 12.67secs, 2 A Whyte (Can) BY FRANK DALLERES from their main creditors, Royal Bank
12.98, 3 A Miller (Nzl) 13.25. Discus Final: 1 K Poonia (Ind) of Scotland, and another from the
61.51m, 2 H Kaur (Ind) 60.16, 3 S Antil (Ind) 58.46, 4 P LIVERPOOL will stride into today’s Liverpool board.
Roles (Wal) 57.99, 6 J Nicholls (Eng) 57.62. 800m Final: 1 N
Jebet Langat (Ken) 2:00.01, 2 N Hamblin (Nzl) 2:00.05, 3 D potentially seismic High Court hear- Today’s hearing sees RBS argue that
Cummins (Can) 2:00.13, 4 E Jackson (Eng) 2:00.46, 5 H ing confident their £300m deal with Hicks and Gillett have breached a
England (Eng) 2:00.47. New England Sports Ventures is contract signed with them in April,
CRICKET watertight, despite talk of a rival bid when a refinancing arrangement for
SECOND TEST MATCH: Australia v India (Bangalore); Australia from Asian billionaire Peter Lim. their holding companies was agreed.
478 (M J North 128, R T Ponting 77, T D Paine 59, S R Watson
57, Harbhajan Singh 4-148) v India 435-5 (122.0 overs) (S R Singapore-based Lim, whose initial RBS say Hicks and Gillett are not enti-
Tendulkar 191no, M K Vijay 139). bid was snubbed in favour of NESV’s tled to change the composition of the
THIRD ONE DAY INTERNATIONAL: New Zealand v offer, made it known yesterday that board and was granted an injunction
Bangladesh (Mirpur); New Zealand 173 (L R P L Taylor 62no) he has not given up on buying the to that effect on Friday.
v Bangladesh 177-3 (Shahriar Nafees 73, Imrul Kayes 50).
Bangladesh beat New Zealand by 7 wickets. beleaguered Premier League club and Hicks and Gillett sought to remove
THIRD ONE DAY INTERNATIONAL: Afghanistan v Kenya
could return with a better offer. managing director Christian Purslow
(Nairobi); Afghanistan 188 (Mohammad Nabi 60) v Kenya But City A.M. understands that and commercial director Ian Ayre last
189-2 (C O C O Obuya 86no, A Obanda 77). Kenya beat Liverpool’s board fully expects that week as the board discussed NESV’s
Afghanistan by 8 wickets. the legal case due to begin today at bid. That move would have given
the Royal Courts of Justice will result them a majority in opposing the sale;
TODAY’S DIARY in their right to sell the club being with Purslow and Ayre in situ they
(Football 7.45pm unless stated)
European Championship Qualifying Group A upheld, despite opposition from are outnumbered. Hicks and Gillett
Azerbaijan v Turkey (4pm)...................................................................................... embattled owners Tom Hicks and will lose £140m if Liverpool are sold
Belgium v Austria........................................................................................................ George Gillett. to NESV, but face administration if
Kazakhstan v Germany (6pm) .............................................................................. And that scenario would mean they do not repay their £237m debt, Liverpool’s
Group B
Armenia v Andorra (4pm) ...................................................................................... NESV, owners of baseball’s Boston Red plus fees, to RBS by Friday. board is at
FYR Macedonia v Russia (7.30) ............................................................................ Sox, completing a purchase for which Aside from the RBS case, war with the
Slovakia v Rep of Ireland (7.30)............................................................................ they have already signed a legally Liverpool’s board is also seeking a club’s owners.
Group C binding agreement – leaving Lim out declaratory judgement in the High
Estonia v Slovenia (7.30)..........................................................................................
Faroe Islands v Northern Ireland (4pm) .......................................................... in the cold. Court that would formally endorse its Picture: GETTY
Italy v Serbia (7.50) .................................................................................................. Matters are complicated by the fact right to sell the club. No hearing has
Group D Hicks and Gillett are facing two legal yet been scheduled.
Belarus v Albania (6.30)..........................................................................................
France v Luxembourg (8pm)..................................................................................
Group E

Liverpool saga could run into next week

Finland v Hungary (4.30) ........................................................................................
Holland v Sweden (7.30) ..........................................................................................
San Marino v Moldova (7.30) ................................................................................
Group F
Greece v Israel ............................................................................................................
Latvia v Georgia (6pm) ............................................................................................
Group G
England v Montenegro (8pm)................................................................................
Switzerland v Wales (7.30) ....................................................................................
week. Even if Royal Bank of Scotland’s Sources close to Liverpool accept but there are six other applications to
▲

Group H FOOTBALL FINANCE

Denmark v Cyprus (7.15)..........................................................................................
Iceland v Portugal (8.45) ........................................................................................ BY FRANK DALLERES
Group I LEGAL sources close to Liverpool’s
Liechtenstein v Czech Republic (7pm)................................................................
Scotland v Spain (8pm)............................................................................................ ownership battle have told City A.M.
European Under-21 Ch’ship Play-Off Second Leg that today’s hearing is likely to be
Romania (1) v England (2) (12.30) ...................................................................... only the beginning of a lengthy
process.
A quick verdict is not expected and,
SPORTS EDITOR JON COUCH after a discussion about timings, the
email sport@cityam.com case is thought likely to be adjourned
until later this week or early next
argument that Liverpool’s board is
entitled to sell the club without the
consent of Tom Hicks and George
Gillett is upheld, the owners are
almost certain to appeal.
It means Liverpool seem destined
to go into this weekend’s Merseyside
derby with Everton mired in uncer-
tainty and with the threat of a nine-
point deduction for entering
administration hanging over them.
that the saga is likely to last into next
week and possibly beyond.
In favour of Liverpool and New
England Sports Ventures is that the
Premier League has also approved the
deal and ratified the American suit-
ors as so-called fit and proper owners.
Mr Justice Floyd will begin the
hearing today in Court 16 of the Royal
Courts of Justice on the Strand. The
timing is at the judge’s discretion,
be heard so it will not necessarily be
first on the list when hearings begin
at 10:30am.
Liverpool fans’ group Spirit of
Shankly told City A.M. on Sunday that
they expected several hundred Reds
supporters to gather outside the
courts for the case. They are keen to
vent their anger at Hicks and Gillett,
who they blame for the club’s slide
from top four to bottom three.

Ferdinand fit and relieved to

regain England captaincy
him lose the honour at his club
ENGLAND Manchester United. In his absence
Liverpool skipper Steven Gerrard,
many observers’ preferred candidate,
MONTENEGRO has excelled in the role, earning
praise from Fabio Capello, a man sel-
dom given to lavish acclaim.
But Ferdinand is fit to feature in
▲
importance attached to the role of
captain in England, insisted
Ferdinand’s reinstatement was auto-
matic.
“When Rio played, Stevie was
always vice-captain,” he said. “Rio is
back. He will start as captain. These
are the rules. I told Stevie he was a

INTERNATIONALS
BY FRANK DALLERES
ENGLAND captain Rio Ferdinand
admits he feared he had lost the arm-
Ferdinand has band forever, as he prepares to lead
captained out the side again in tonight’s Euro
England just 2012 qualifier against Montenegro.
twice this year. Injuries have meant Ferdinand has
only skippered England twice since
Picture: GETTY being appointed captain earlier this
year, while fitness struggles have seen
his first competitive international for
12 months at Wembley this evening,
and Capello has handed the armband
back to the relieved centre-back.
“With all the hype that surrounds
these kinds of situations, it does
bring an element of doubt into your
mind,” said Ferdinand. “You end up
thinking, ‘Will I or won’t I?’.”
Capello, who has previously
expressed his bemusement at the
fantastic captain but he will have to
play like a captain without the arm-
band. He has to be a leader.”
Ferdinand’s availability has
become even more important after
Chelsea captain John Terry withdrew
from the squad with injury. Everton’s
Phil Jagielka is also out, so
Manchester City’s Joleon Lescott is
tipped to partner Ferdinand at the
centre of defence.
CITYA.M. 12 OCTOBER 2010 Sport | Football 31

Lim: Billionaire with a

chain of Man Utd bars
West Ham gain edge over Tottenham
WHO IS HE?
Lim, 57, is a former
after UK Athletics support stadium bid
stockbroker who
has grown his for- PREMIER LEAGUE chiefs made a cornerstone of their elite end, but with the retention of

tune to around
£1bn thanks to a
hugely successful
investment in palm
oil producer Wilmar. He also owns 14
Manchester United-themed bars
across Asia.
WHAT IS HE PROMISING?
To pay off Hicks and Gillett’s debt to
RBS, pay a greater proportion of the
fees owed than New England Sports
Ventures and to hand manager Roy
Hodgson tens of millions to spend in
January.
▲
WEST HAM have received a signifi-
cant boost after UK Athletics (UKA)
backed their bid to move into
London’s Olympic Stadium follow-
ing the 2012 Games.
The Hammers are among the lead-
ing candidates to take over the
80,000-seater venue and, unlike rival
bidders Tottenham, are committed
to retaining the running track.
The track is key to delivering the
athletics legacy that London 2012
successful campaign to stage the
Games.
And Ed Warner, UKA’s chairman,
revealed it was a major factor in
their decision to endorse West
Ham’s proposal, made in partner-
ship with Newham Council, above
all others.
“What has impressed me so much
about the joint bid from West Ham
and Newham is their clear commit-
ment to the spirit of the Olympic
legacy and not just athletics at the
the community track, our future
champions and club runners too,”
said Warner.
Warner added that West Ham
would support UKA’s attempts to
host the athletics World
Championship at the stadium in
2015.
West Ham vice-chairman Karren
Brady called UKA’s support “a power-
ful and highly-valued testament” to
their ability to realise the legacy
pledge.

IS HE STILL IN THE RACE?

Unless the NESV deal collapses, it
seems not, as Liverpool are adamant
their deal with the Boston Red Sox
owners is legally binding. But if Hicks
and Gillett win in court, he could be
back in.

How they line up: The backroom

teams in the legal fight for Anfield
PAUL GIROLAMI LORD GRABINER
QC QC

PAUL GIROLAMI QC of Maitland LIVERPOOL’S board has instructed

Chambers has been instructed to rep-
resent Tom Hicks and George Gillett,
alongside junior counsel from Brick
Court Chambers. City firm Peters and
Peters is also advising the owners. The
firm’s team is led by partner Jonathan
Tickner. US firm Weil Gotshal &
Manges is advising on transactional
elements. Nicola Howson of Freud
Communications is media adviser.
legal heavyweight Lord Grabiner QC to
represent the club. Grabiner, one of
the biggest names in the commercial
Bar, is joined by Jamie Goldsmith, also
of barristers One Essex Court. Magic
circle firm Slaughter and May, led by
partner Nigel Boardman, is also part of
the legal team, while Brunswick is
handling communications for Reds
chairman Martin Broughton.

Capello backs Rooney to

put club woes to one side
INTERNATIONALS “He is in a good moment. I spoke
▲

with him about different things and

ENGLAND head coach Fabio Capello
insists out-of-sorts striker Wayne
Rooney is fully fit and “in a good
moment” ahead of tonight’s clash
with Montenegro.
Rooney has not scored from open
play for Manchester United this sea-
son, and missed his club’s last two
games with an ankle injury.
The 24-year-old’s slump has also
coincided with intense scrutiny of his
private life, but Capello is expecting
Rooney to put his troubles behind
him at Wembley.
“Rooney will play. He is feeling
good. I spoke with Wayne and he told
me his ankle is okay. He trained fan-
tastically and without pain,” said the
Italian.
he is happy. Rooney will play tomor-
row in the same style as he played
against Switzerland.”
Rooney will play in a withdrawn
forward role behind Tottenham tar-
get man Peter Crouch, whose starting
place was guaranteed after injury
ruled out Sunderland’s Darren Bent
yesterday.
The United talisman may have
struggled for his club but has found
sanctuary in an England shirt, scor-
ing in last month’s 3-1 victory in
Switzerland and impressing in the
home win over Bulgaria.
Montenegro arrive in London top
of Group G with a 100 per cent record
from their three fixtures and without
having conceded a goal.
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