Issue 1,240 Thursday 14 October 2010
BUSINESS WITH PERSONALITY
BANKS IN BID TO
BOOST LENDING ATHOUR11THBY
SALE HALTED
▲
BANKING
BY DAVID CROW
BRITAIN’S biggest banks have outlined a raft
of measures to boost lending to small busi-
nesses, including a £1.5bn growth fund, in a
bid to counter suggestions they are not doing
enough to nurture the recovery.
HSBC, Barclays, Royal Bank of Scotland,
Lloyds Banking Group, Standard Chartered
and the UK operations of Santander will con-
tribute to the fund, which will offer support
to firms with average revenues between £10m
and £100m and a funding requirement of
between £2m and £10m.
The fund will take an equity stake of at
least ten per cent in its investments, while the
participating banks will complement this by
helping medium-sized businesses gain access
to syndicated debt markets and trade finance.
The average duration of each investment is
expected to be around five years.
In a foreword to the report, the six bank
bosses and British Bankers’ Association chief
executive Angela Knight say they are “deter-
mined to change” the way that trust between
banks and firms has suffered in the wake of
the financial crisis.
As well as the growth fund, the report rec-
ommends 16 ways to improve the flow of
credit to small firms. From now on, all com-
panies seeking to renew their credit facilities
should be able to begin negotiations with
their banks at least 12 months before the date
of refinancing, the report says.
The six banks will sign up to a new code of
practice that will lay out the principles gov-
erning fair lending, and the report recom-
mends an independent appeals process for
those firms that think a bank’s decision
breaches these rules.
A high-level business finance roundtable,
bringing together representatives of banks
and business groups, should also be created,
the report says.
However, the banks involved in the report
insisted that subdued demand is one of the
main reasons lending is so depressed, and
warned that higher capital requirements will
JPMORGAN’S PROFIT JUMPS
BANKING
▲
BY MARION DAKERS
JPMORGAN Chase kicked off the third quar-
ter earnings season on a high note yesterday,
announcing quarterly profit up 22 per cent
thanks to lower loan losses.
New York-based JPMorgan, the first of the
banks to report third-quarter earnings, has
like its peers struggled to make new loans
this year, even as losses on bad mortgages and
credit cards have eased.
JPMorgan said third-quarter net income
rose to $4.4bn (£2.8bn), or $1.01 a share, from
$3.6bn, or 82 cents a share a year earlier.
Analysts expected a profit of 90 cents a share.
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LIVERPOOL
BID DRAMA
HICKS
SPORT P31
Top row: Barclays chief
executive John Varley,
HSBC UK chief executive
Paul Thurston, Lloyds
Banking Group chief
executive Eric Daniels
and Santander UK chief
executive Antonio Horta-
Osorio
Bottom row: Standard
Chartered chief executive
Peter Sands, RBS chief
executive Stephen Hester
and British Bankers’
Association chief execu-
tive Angela Knight
Pictures: REUTERS/
Micha Theiner/ CITY
A.M
push the cost of borrowing higher still. ters agreed the banks would need to do more
They said that for every one per cent to stem the government’s criticisms.
increase in capital requirements, the price of Meanwhile, the Federation of Small
credit will rise by 13 basis points, for example. Businesses said the £1.5bn growth fund
Chancellor George Osborne and business would do little to help its members, who are
secretary Vince Cable gave the report a cau- normally looking for tens of thousands of
tious welcome and said it “was an important pounds of credit – not millions.
first step”, although advisers to both minis- ALLISTER HEATH: P2
JPMorgan’s card services arm reported a measures passed by President Obama in the
profit of $735m against a year-earlier loss of summer.
$700m and its retail unit reported a profit of Worries that regulatory changes will trim
$907m, compared to just $7m a year earlier. some of the bank’s most profitable business
Profit in its mortgage banking and other have weighed on JPMorgan shares. The bank
consumer lending business slipped to $207m, is working with regulators and devoting sub-
down 50 per cent on the previous year, even stantial resources to implementing reforms,
as the bank set aside less money against loan Dimon said.
losses in the unit. As a result of financial reform, the bank
Chief executive Jamie Dimon expects mort- said last month it is moving about 45 traders
gage losses to remain high for the next sever- that previously traded for its own account
al quarters. “If economic conditions worsen, into a new unit within its asset management
mortgage credit losses could trend higher,” he business.
said.
Like its peers, JPMorgan is facing changes Certified Distribution
to its business after the US financial reform 02/08/10 – 29/08/10 is 93,782
 2 News
At last, the banks are reaching out to UK Plc
EDITOR’S LETTER
ALLISTER HEATH
THERE are two possible ways forward
for the banking industry. The first is to
do nothing and try and brave out the
storm, chucking the occasional insult
at detractors. The second is to show
some humility, reach out, make sensi-
ble reforms – and invest some of its
own cash – to improve matters and
fight its opponents with genuine
facts, arguments and economic analy-
sis. After prevaricating for ages, the
industry has now adopted the second
strategy, responding at last to those
who argue that it is unfairly limiting
credit and charging too much.
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Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
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Lifestyle Editor Zoe Strimpel
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WHAT THE OTHER PAPERS SAY THIS MORNING
F&C OPPOSES US POLITICAL
DONATIONS BY NEWS CORPORATION
F&C, the UK asset manager, will
vote against the re-election of News
Corp’s audit committee chairman
at its upcoming annual meeting on
Friday over the media group’s mil-
lion-dollar political donations to
the Republican Governors
Association and the US Chamber of
Commerce.“We are concerned to
see the company deploy sharehold-
er funds for activities that are best
left to the individuals whose views
they reflect and are not obviously a
business matter for the company,”
said Karina Litvack, head of gover-
nance and sustainable investment
at F&C.
TOP OIL TRADER SAYS PRICE WILL
FALL SHORT OF $100
Oil prices will rise modestly
towards $85 a barrel next year
There are lots of good suggestions –
and a few dud ones – in last night’s
Business Lending Taskforce report,
organized by the British Bankers’
Association and co-signed by the CEOs
of Barclays, HSBC, Lloyds, RBS,
Santander and Standard Chartered. A
new £1.5bn growth fund will provide
capital for viable businesses, a great
move; if managed properly, this could
pave the way for a new, 21st century
tide of venture capitalism. It is right
that this fund won’t be co-financed by
the taxpayer. It will specialise in long
term equity growth capital for firms
requiring between £2m and £10m.
Other good ideas include helping mid-
sized firms gain access to syndicated
debt and trade finance, largely by
improving information. Other moves
that may help include pre re-financ-
ing dialogues 12 months’ ahead of any
term loan coming to an end, and bet-
ter appeals processes for declined loan
applications. We shall obviously have
to wait to see how effective these
measures turn out to be – and
Labour slams
benefit plans
POLITICS
▲
BY DAVID CROW
ED Miliband yesterday hit out at plans
to axe child benefit for higher rate tax-
payers, in a round of Prime Minister’s
Questions that saw the Labour leader
emerge as a clear victor.
Facing David Cameron at the dis-
patch box for the first time since
becoming Labour leader, Miliband
said hundreds of thousands of fami-
lies with one stay at home parent
would be unfairly affected by the
plans.
He said: “Hundreds of thousands of
families... are asking this: why should
a family on £45,000 where one person
stays at home lose their child benefit...
but a family on £80,000 where both
partners in a couple are working
should keep their child benefit?”
Miliband, who had been expected
despite market expectations they
will return to over $100 a barrel,
the world’s largest oil trading
house has forecast. Ian Taylor, chief
executive of Swiss-based Vitol, said
a price band between $70 and $85 a
barrel was “widely viewed as meet-
ing producers’ needs while being
‘acceptable’ to consumers”.
NORWEGIANS CONVICTED FOR
OUTWITTING ALGO
Two Norwegian day traders have
been handed suspended prison sen-
tences for market manipulation
after outwitting the automated
trading system of a big US broker.
The two men worked out how the
computerised system would react
to certain trading patterns – allow-
ing them to influence the price of
low-volume stocks.The case, involv-
ing Timber Hill, a unit of US-based
Interactive Brokers, comes amid
growing scrutiny of automated
trading systems after the so-called
“flash crash” in May.
whether the £1.5bn is enough.
The report is pretty balanced when
it comes to lending and borrowing fig-
ures. The arguments confirm my sus-
picion that the biggest problem is the
decline in the demand for credit, com-
bined with the demise of foreign bank
supply – but it also points out that
some firms may have given up and are
therefore not approaching their
banks. Overall business credit facili-
ties (including overdrafts) are only 75
per cent utilised. Undrawn, commit-
ted facilities from banks exceed
£85bn, with a further £70bn of com-
mitted, undrawn facilities available
from other lenders.
Loan applications by small firms
across the main high street banks are
20 per cent lower than at the start of
2008, either because demand is lower
or because small firms are so sure
they will be turned down that they
are not applying. Overdraft applica-
tions for firms with a turnover of less
than £1m are 50 per cent down. Yet
most applications are given the green
to perform badly by some Tory strate-
gists, said the changes would amount
to a 6p rise in income tax for a family
with three children on a post-tax
income of £33,000, who would lose
£2,500 under the plans.
Cameron retorted that Miliband
had “suddenly discovered” middle-
income families, who he said were
hammered by Gordon Brown, and
claimed that “Red Ed” owed his job to
the trade unions. However, the Prime
Minister was visibly rattled by
Miliband and put in a much less
assured performance than normal.
Ed Miliband was
expected to put in a
poor performance at
PMQs, but confounded
his detractors
BRITAIN GOES RETRO IN
CHRISTMAS RUN-UP
The gradual encroachment of
Christmas into autumn has been a
perennial bugbear of Scrooges for
years. But this month a cold spell real-
ly has triggered an unusually early
start to Christmas spending, accord-
ing to John Lewis. Britain’s biggest
department store group said sales of
seasonal products have risen 16 per
cent on last October, with sales of
Christmas trees more than doubling.
PETROPAV CUTS BACK ON HK LISTING
Petropavlovsk has been forced to cut
the amount it will raise from the list-
ing of its iron ore subsidiary in Hong
Kong for a second time. The goldmin-
er said today that it will offer 1.04 bil-
lion shares in an initial public
offering of its loss-making IRC divi-
sion. This is 30 million fewer shares
than announced last week.
light: approval rates for the £1m-£25m
turnover band have held up, at 97 per
cent for overdrafts and 90 per cent for
loans. For small firms as a whole, 80
per cent of overdrafts are approved,
up from 67 per cent in late 2009; loan
approval rates are 70 per cent, up
from to 63 per cent.
Perhaps the most worrying part of
the report is that which deals with
funding costs – and how this will push
up rates charged to borrowers.
Wholesale funding accounts for 19
per cent of the total – and costs have
permanently risen (rightly so, given
how underpriced everything was pre-
2007). Five-year credit default swap
spreads are currently 1.4 per cent,
compared to a pre-crisis figure of 0.1
per cent. Vast amounts of debt matur-
ing over the next few years will have to
be refinanced at these higher costs;
the industry faces serious financing
challenges. Higher capital require-
ments will also increase the cost of
lending, as expensive equity replaces
cheaper debt. Every one per cent
Sir Menzies Campell said he would vote against the plans
Lib Dem revolt on uni fees
POLITICS
▲
BY DAVID CROW
SIR Menzies Campbell, the former
leader of the Liberal Democrats, yes-
terday joined a chorus of Lib Dem MPs
and said he would vote against any
rise in university tuition fees.
The government is expected to back
Lord Browne’s report on university
funding, which recommends that the
£3,290 cap on tuition fees should be
scrapped, even though all Lib Dem
ministers said they would vote against
LOVEFILM TO STREAM MOVIES ON
SONY’S PLAYSTATION
Film-rental service LoveFilm has
teamed up with Sony to offer movie
streaming directly through the
PlayStation 3 console. Subscribers to
LoveFilm, of which there are current-
ly 1.4m, will be able to choose from
its collection of movies and watch
them on their televisions.
DP WORLD RESUSCITATES
LONDON FLOAT PLANS
DP World, the container terminals
group controlled by the debt-laden
Dubai World, plans to make another
attempt next spring at a dual listing
on the London Stock Exchange. The
world’s fourth-biggest container
ports group, which acquired UK
operator P&O for £3.92bn in 2006,
postponed its plans in June, blam-
ing technical difficulties and sub-
dued capital markets
CITYA.M. 14 OCTOBER 2010
increase in the capital requirement
will boost the price of credit by 0.13
per cent. Lending to small firms is
more risky than average, and banks
are required to hold more capital
against an equivalently sized loan as a
result. This magnifying effect means
that interest rates on loans to small
business will increase by even more
than other loans. Basel III could also
lift trade finance prices by 20 per cent
to 40 per cent. The FSA’s new liquidity
rules will also add a further 0.1 per
cent to margins. Finally, banks will
need to re-price credit to take account
of a more realistic default risk. Write-
offs for business lending were just 0.3
per cent in 2007 and were wrongly
(and naively) expected to remain low,
but subsequently peaked at 1.3 per
cent during 2010. Again, this will push
up the cost of credit for all firms.
All in all, a sensible and frank
report from the banks. It is a shame
we had to wait so long before the
industry finally got its act together.
allister.heath@cityam.com
Picture: GETTY
a hike in student contributions.
But yesterday Campbell said he
would vote against the plans in the
Commons. “My credibility would be
shot to pieces if I did anything other
than stick to the promise I made,” he
added.
Campbell will be joined in the “No”
lobby by Charles Kennedy, also a for-
mer leader, who has signalled that he
is unhappy with the plans. And Simon
Hughes, deputy leader, said the coali-
tion should try to “improve” Browne’s
plans.
UK SEEKS PRIVATE INDUSTRY HELP IN
AVERTING CYBER ATTACKS
The head of Britain's communica-
tions intelligence agency said it may
need to receive direct feeds of infor-
mation from private companies in
key economic sectors to better pro-
tect the UK economy from the
threat from cyber attacks. In a rare
speech, Iain Lobban, GCHQ’s direc-
tor since 2008, said the risks from
cyber attacks were expanding along
with the rise in the Internet, which
was growing 60 per cent a year.
UBS PLANS TRANSPARENCY REPORT
UBS will give shareholders more
insight into how it nearly collapsed
under the weight of billions in toxic
securities in 2008, but the Zurich-
based bank’s efforts to quell fury
with former managers may fall
short of some investors' expecta-
tions.
CITYA.M. 14 OCTOBER 2010
Ex-JPM Caz
chief Kheraj
joins Lazard
▲
BANKING
BY VICTORIA BATES
FORMER JP Morgan Cazenove chief
executive Naguib Kheraj has agreed to
join Lazard as chief executive of its
international business, which is
chaired by Ken Costa.
The surprise move came after wide-
spread speculation in the City that
Kheraj, who also held the finance
director role at Barclays in the past,
was among the top candidates to
replace Eric Daniels as chief executive
of Lloyds Banking Group.
At Lazard International, Kheraj will
be part of an elite team tasked with
providing cross-border advice to the
biggest corporates, financial institu-
Naguib Kheraj, the
former chief executive
of JP Morgan Caz, is
no longer in the race to
run Lloyds Bank
tions and sovereign wealth funds. The
business sits alongside the bank’s UK
arm, led by chief executive William
Rucker.
Kheraj is one of the City’s most
respected senior bankers, who
stepped down from his former role
earlier this year when JP Morgan
acquired the remaining 50 per cent of
Cazenove it did not already own.
As well as being linked to the
Lloyds role, he had also been touted
as a potential successor to Stuart
Gulliver, who was recently appointed
as chief executive of HSBC, at the
helm of the firm’s investment bank.
The news of his appointment came
as it emerged that Costa, who has
chaired Lazard International for
three years, had registered a new ven-
ture at Companies House in August.
Costa and his wife Fiona are the only
listed directors at the new firm, K J
Costa Advisory, which is not expected
to encroach upon his duties at Lazard.
It has not been registered with the
Financial Services Authority.
Francis Maude will announce the fate of 700 quangos today
Government sets light
to its bonfire of quangos
POLITICS
▲
BY DAVID CROW
THE government will this morning
announce which quangos it plans to
scrap or merge, as it seeks to cut the
deficit and improve democratic
accountability.
Francis Maude, the cabinet office
minister, will tell Parliament at
9.30am which of the 700 agencies has
been spared.
A merger of the Office of Fair
Picture: REUTERS
Trading and the Competition
Commission, which are both charged
with promoting competition, is
thought to be on the cards, as minis-
ters believe they have several overlap-
ping functions.
However, the Prime Minister’s
spokesman yesterday played down
earlier claims that the quangos are
being scrapped to cut the public sec-
tor payroll and deficit, as many of the
agencies’ responsibilities will simply
be taken over by central government.
News 3
BoE’s Sentance
reiterates call
for higher rates
UK ECONOMY
▲
BANK OF ENGLAND hawk Andrew
Sentance yesterday repeated his call
for a gradual increase in interest rates
and argued that such a policy would
support rather than threaten the
recovery and bolster the central
bank’s inflation-fighting credibility.
In a speech in London, Sentance
said: “It is the right response to an
economy which is growing but experi-
encing persistent above-target infla-
tion. It would reduce the risk of a
future shock to confidence if current
above-target inflation does become
more deeply embedded and interest
rates then need to rise more sharply to
combat it,” he said.
At a time when many economists
and policymakers are debating the
need for further quantitative easing,
and downplaying the UK’s high infla-
tion, Sentance’s continued hawkish
tone sets him even further apart from
his fellow Monetary Policy Committee
(MPC) members.
He also warned that the risk of a
loss of both confidence in the infla-
tion target and the MPC’s credibility
appeared to be increasing. “We have
seen two major spikes in inflation in
the last two years. These repeated
episodes risk eroding confidence that
UK policymakers remain committed
to low and stable inflation.”
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CITYA.M. 14 OCTOBER 2010 News 5

StanChart boss
Peter Sands insists JONATHAN
the money being WILCOX
raised is to help the
bank maintain its JP MORGAN
organic growth
Picture: REUTERS
High-flying equities banker Jonathan
Wilcox is heading up the team advis-
ing on the rights issue at JP Morgan.
It is perhaps easier to spot the
deals he hasn’t advised on over the
last two years. He is no stranger to
rights issues. Earlier this year he
advised Prudential on its failed plan
raise £13bn in new funds from its
shareholders, as part of its bid to buy
AIA from its US owners in a $35.5bn
deal.
He had more success working
alongside fellow JP Morgan bankers
Edmund Byers and Charles Pretzlik
advising Balfour Beatty in its share
placement last year.
Also in 2009 he advised Rio Tinto,
Great Portland Estates and Lonmin
on their rights issues.
Wilcox has also worked on a num-
ber of big IPOs, advising Jupiter on
its pricing in the lead up to its
£750m flotation this summer. Also
working on the float for JP Morgan
were Tim Wise and Edward Squire.
Before this he advised New Look
on its flotation, which was later
pulled.
Legal adviser on the deal was
Nilufer von Bismarck from
Slaughter & May. She advises on a
host of corporate deals including
mergers and acquisitions, joint ven-
tures and IPOs.

StanChart to
raise £3bn in
rights issue
tional 2.5 per cent.
▲

BANKING
BY STEVE DINNEEN
STANDARD Chartered yesterday con-
firmed it will launch a £3.3bn rights
issue, with major investor Temasek
already saying it will take up its full
allotment of shares.
Existing shareholders will be
offered the chance to buy one new
share at £12.80 for every eight shares
they hold – a 33 per cent discount to
the pre-announcement price.
The bank denied suggestions the
rights issue will create a war chest
which will be spent on a major Asian
acquisition.
It said it is instead preparing for new
Basel III rules that will increase banks’
capital requirements. They will need
to have a core Tier 1 capital ratio – the
ratio between capital equity and risk
weighted assets – of at least seven per
cent.
Standard Chartered already has a
ratio of nine per cent, which will rise
to 11 per cent after the rights issue.
However, the bank says new rules will
re-weight of some of its assets, slashing
a percentage point from this and local
jurisdictions could require an addi-
Chief executive Peter Sands said the
new funds will allow the bank to “con-
tinue to seize opportunities across
Asia, Africa and the Middle East.”
He added it will “safeguard the
bank’s ability to take advantage of the
opportunities in our markets while
meeting the anticipated changes in
the regulatory world.” He said the new
capital rules could have constrained
its asset growth unless new cash was
raised. A source close to the bank dis-
missed suggestions it was responding
to a possible bid by JP Morgan.
Standard Chartered recently posted
record first half profits of $3.12bn
(£1.97bn).
ANALYSIS l Standard Chartered
1,875.00
1950 p 13 Oct
1850
1750
1650
19 Jul 6 Aug 26 Aug 16 Sep 6 Oct

Acquisition spree on the cards

THERE’S something that doesn’t
ring quite true about Standard
Chartered’s insistence that it is tap-
ping shareholders for £3bn to boost
its capital buffers. Management is
adamant that cash won’t be used for
acquisitions, but we’re not so sure.
With a core Tier 1 capital ratio of
nine per cent at the end of June, its
capital levels are pretty solid.
It’s true that some local private
sector banks in Hong Kong, India
and Singapore are better prepared
for Basel III (which calls for a Tier 1
of seven), with capital ratios nearer
the 11 or 12 mark. But even if it does
want to improve its capital position,
this is an overly cautious move: it
has three years to comply with the
new regulations from the Bank of
International Settlements, and
could easily limit the dividend
slightly or marginally scale back
investment.
Then there’s the timing: just as
rumours that JP Morgan is about to
buy Standard Chartered start to take
on a life of their own, the latter
announces a shock rights issue.
Coincidence? Perhaps. But £3bn
would enable Standard Chartered to
bulk up with a series of bolt-on
acquisitions, employing the so-
called “fat man” defence and
repelling any unwanted advances.
We expect Standard Chartered to hit
the acquisition trail in the near
future. Watch this space.
BOTTOMLINE
Analysis by David Crow
The UK’s number financial spread
betting provider.*
CITYA.M. 14 OCTOBER 2010 News 7

Sale of Royal Mail to include

Royal Mail

biggest ever staff share plan

Royal Mail will be the biggest employee share scheme with 10% of the
of whom would have the right to buy ket. Its 100,000 employees were able

business being held by 150,000 staff
Over 100,000 employees
BT privatised in 1984, 5% to employees
Railtrack, privatised in 1996, 0.6% to employees
50 to 100,000 employees
British Aerospace, privatised in 1982, 3.3% to employees
British Gas, privatised in 1986, 5% to employees
British Steel, privatised in 1988, 6.2% to employees
Regional Electricity, privatised in 1990, 4% to employees
Under 50,000 employees
Rolls Royce, privatised in 1987, 10% to employees
British Airways, privatised in 1987, 9.5% to employees
Water companies privatised in 1989, 3% to employees
▲
POLITICS
BY MATTHEW WEST into the business. to buy five per cent of the new compa-
It would be the “largest share own- ny.
THE plan to privatise the Royal Mail ership scheme within a privatised If it is carried out in the same way
will see the largest employee share company in history” said Ed Davey, as previous schemes, staff will be
scheme in history, Vince Cable said the minister for employment rela- offered shares at a preferential price
yesterday as he published the Postal tions, consumer and postal affairs, through pay-as-you-earn schemes.
Services Bill. who will oversee the bill’s passage The employee share scheme will be admin-
Cable said a guaranteed ten per through parliament. istered separately by the government
cent of the newly-privatised Royal The largest employee share scheme before the business is sold to a buyer or
Mail would ultimately be reserved for to date was in 1984 when British floated on the London stock exchange.
the service’s current 150,000 staff, all Telecom was listed on the stock mar-
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the coalition expected to sell Royal
▲

POLITICS
BY MATTHEW WEST
THE government unveiled its plans to
privatise the Royal Mail yesterday, but
independent valuations suggest the
business could fetch just £700m.
Royal Mail will now almost certain-
ly be swallowed up by a competitor
like Deutsche Post or TNT, or bought
by a private equity-led consortium.
A stockmarket flotation is also
being considered, while at least ten
per cent of the business will go to
workers through an employee share
scheme.
The government is not expected to
keep a stake in the business.
Vince Cable, the business secretary,
also said the Post Office network –
which is separate from Royal Mail –
would likely be mutualised, with
ownership transferring to staff or
local communities.
Cable declined to say how much
honda.co.uk/affordablehonda
Mail for, although a private study
done by Trova Consulting for the gov-
ernment estimates it could fetch as
little as £700m.
Buyers are likely to be deterred by
the decision to enshrine Royal Mail’s
“universal service obligation” into
law, meaning the business must deliv-
er any letter anywhere for a single
price from Monday to Saturday.
The government hopes the bill will
receive Royal Assent by next summer,
making a sale in the second half of
next year or early in 2012 most likely.
The government will take responsi-
bility for the Royal Mail’s pension
fund deficit currently estimated at
£8bn.
Cable attempted to avert a show-
down with the Communication
Workers Union (CWU) over the pro-
posals, insisting that unionised work-
ers knew there was no other viable
alternative for the business.

Appointment of new boss proves

government is serious about sale
▲

POLITICS included cutting absenteeism,

THE appointment of Moya Greene as
the Royal Mail’s new chief executive
reveals the government’s hard-nosed
approach to privatising the business,
whatever the objections of the
Communication Workers Union.
Greene has a great deal of experi-
ence in such matters overseeing the
privatisation of Canada’s national rail
network and the deregulation of its
airline industry as a civil servant in
the 1990s before moving into the pri-
vate sector.
She was appointed chief executive
of Canada Post in 2005, beginning a
programme of cost cutting that
increasing automation and improv-
ing industrial relations.
Canada Post’s profits trebled to
C$281m (£183m) during her four
years in charge, despite a 5.1 per cent
drop in revenues. But the Canadian
Union of Postal Workers said injuries
went up 15.4 per cent and grievances
increased 59.3 per cent.
Moya Greene was named
one of Canada’s top
female executives in
2004, a year before she
took over Canada Post
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 8 Economics CITYA.M. 14 OCTOBER 2010

US announces
state probe of
ASIA CRANKS UP CURRENCY RHETORIC
Industrial output
practices among across EU sees an
mortgage firms
upswing in August
▲

WORLD ECONOMY
ALL 50 US states yesterday launched a UK ECONOMY ,grew by three per cent in the

joint investigation of the mortgage
industry, a move some experts fear
will cause uncertainty and threaten
the recovery of the fragile housing
market.
The state attorneys general are look-
ing at allegations some banks used
shoddy or fraudulent paperwork to
remove struggling borrowers from
their homes during a foreclosure crisis
that is one of the most visible wounds
of the 2007-2009 recession.
Industry experts warn the investiga-
tion could put the brakes on foreclo-
sure proceedings. One of every four
homes sold in the second quarter was
a foreclosed property and any slowing
could have an impact on the broader
economy, as the housing market tradi-
tionally drives recoveries after a down-
turn. The US has an $11 trillion (£6.9
trillion) residential mortgage market.
▲
BY MATTHEW WEST
INDUSTRIAL output in the 16-member
euro area grew by one per cent in
August fuelled by an increase in the
production of capital goods, official
figures revealed yesterday.
European statistics agency Eurostat
said industrial output in the wider
27-member European Union (EU) also
grew by 0.8 per cent.
The figures showed the highest rise
in industrial output since May and
were a significant improvement on
the previous month, which saw
industrial output grow by an anaemic
0.1 per cent in both zones.
Industrial output on an annual
CHINA is trying to avoid a currency war, but issues concerning any specific currency basis rose 7.9 per cent in the euro area
should not be treated as part of an agenda at G20 meetings, a Chinese G20 negotiator and by 7.5 per cent in the EU.
said yesterday. Japanese finance minister Yoshihiko Noda (above) said currency devalua- Production of capital goods, includ-
tion was a key issue for the meeting. Picture: REUTERS ing factories, machinery and tools
Eurozone and by 2.6 per cent in the
EU. The output of consumer durable
goods, including home appliances,
jewellery and car production, rose by
1.8 per cent and 1.4 per cent respec-
tively. But production of energy
dropped by 0.7 per cent and 0.3 per
cent. Eurostat said Greece saw the
biggest rise in industrial output at 5.6
per cent while Ireland saw output fall
dramatically by 13.6 per cent.
While the figures suggested a
strong recovery in August, econo-
mists raised fears of a slowdown in
the third quarter.
“With the business surveys suggest-
ing that the industrial recovery will
soon start to slow, domestic spending
will need to pick up to prevent the
Eurozone recovery from fizzling out,”
said Ben May, European economist at
Capital Economics.

NOW OPEN!
British jobs market
Your 600th
Moorgate store
still deteriorating
is now open! UK ECONOMY ly drop since January and was driv- the planned public spending cuts
▲

BY JESSICA MEAD
FURTHER signs of a deteriorating
jobs market emerged yesterday,
intensifying fears of a second wave
en by fewer unemployed 16 and 17-
year-olds.
While the August decrease saw
the jobless rate edge down to 7.7
per cent, many City economists
have been implemented. Business
survey data continues to suggest
that the private sector is wary of
hiring in the current climate of
uncertainty,” said Andrew

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forecast that the rate could head
back up to more than eight per
cent over the next year as public
sector cuts begin to really bite. The
Office for Budgetary Responsibility
(OBR) has estimated that 600,000
public sector jobs could be lost as a
result of government cuts.
Economists think it unlikely
that the private sector will be able
to offset rising public sector unem-
ployment. “These increases in
unemployment come before any of
Interviews by Marion Dakers
GAEL MEAGHER |
RETAIL CONSULTANT
“The country is in deep
trouble and the
public sector needs
to be cut. It’s never
going to be the
right time to cut
but it’s best to do
it quickly, like
ripping
off a
band
aid.”
Goodwin at the Ernst & Young Item
Club.
A report yesterday from
PricewaterhouseCoopers (PwC) said
that austerity measures could also
hurt the private sector, as firms
supplying the government will cut
jobs and output. The report said
the private sector could lose almost
half a million jobs and £46bn in
annual gross output by 2014-2015
as efforts to slash a budget deficit
hit the supply chain.
CHRIS THOMPSON |
SYBASE
“It’s not the right time to cut,
but the only right time was dur-
ing the last government, who
would never have
allowed it. The
coalition has come
across a financial
black hole, and
it’s best to
cut as soon
as possi-
ble.”
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 The Capitalist
10
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
Above: Patsy Langridge, David Geear, Jenny
Williams and Genevieve White from M&G, the UK
asset management firm of the year.
Above: Jupiter’s Edward Bonham Carter, chief executive of the year
Right: Helena Morrissey of Newton Investment Management, the most influ-
ential woman in asset management
A PAT ON THE BACK
:USKZOSKYTGZ[XK FOR YEAR’S BEST
TKKJYGNKRVOTMNGTJ ASSET MANAGERS
.O\K_U[XYKRLZNKHKYZINGTIK TO THE glamorous surroundings of the
Banqueting House on Whitehall last night
for the annual Financial News asset man-
agement awards, where the most success-
N ;NOTQOTMUL ful industry players of the year lined up to
collect their respective gongs.
NG\OTMGHGH_& Taking the top spot in the European
asset management firm of the year catego-
N -OTJOTMOZ ry, one of the most coveted awards of the
JOLÀI[RZZU evening, was (for the second year running)
MKZVXKMTGTZ& Brevan Howard. The firm also added a
hedge fund manager of the year award to
N >GTZZU its haul for good measure, though the
QTU]NU] double whammy didn’t manage to lure
founder Alan Howard to show his face for
LKXZORK_U[GXK& the event. Then again, it’s a bit of a trek to
Westminster from Geneva, where he relo-
N *UTYOJKXOTM cated for tax reasons earlier this year.
0=-& Also scoring double points last night
was Jupiter’s diminutive but ebullient
N 3UUQOTMLUX boss Edward Bonham
YUSKGTY]KXY& Carter, who took both
the chief executive of the
year award and the gong
-OTJU[Z for deal of the year, after
]NGZ_U[TKKJ successfully pulling off a
ZUQTU]GZ flotation of his business on
the London Stock Exchange
;NK-KXZOROZ_:NU] earlier in the year.
CHILD’S PLAY
No sooner had the awards fin-
ished than Bonham Carter
was off over to a table on the
other side of the room to con-
ŠK^NOHOZUXY gratulate one of the only other
individuals to be recognised at
ŠZGRQY the ceremony – Newton
Š6\KX Investment Management’s chief
\OYOZUXYRGYZ_KGX executive Helena Morrissey, who
5-6 November 2010 was named the year’s most influ-
Olympia, London ential woman in asset manage-
ment.
<OLL_OPIP[PVUMVYL]LY`VUL^OV^HU[ZHIHI` Morrissey is famed in the City
both for her marked success at the
helm of Newton and for manag-
0TGYYUIOGZOUT]OZN
ing to raise no less than nine chil-
dren at the same time as holding
]]]LKXZOROZ_YNU]IU[Q down a demanding career.
Last night, having
CITYA.M. 14 OCTOBER 2010
Left: Brevan Howard partner Danny Bernheim
Above: Peter Ball and Francois Davin from JP
Morgan Asset Management
Above right: Ben Fox
of Goodhart Partners,
Stephen Holt of
Principle Global
Investors, Vincent
Chailley of H20 Asset Helen Smith and Glyn Jones of P-Solve with Chris
Management and Yiannakou and Caitriona Ni Chochlain of UBS
Nicole Wesch and
Terry Mellish from brought a tableful of female clients and
Natixis colleagues along to celebrate her nomina-
tion “whatever the outcome”, Morrissey
Pictures: had a message of encouragement to other
Micha Theiner women in the profession.
/City A.M. “I’m living proof that it is possible to
combine the two – and fund management
is a great career for women,” she told The
Capitalist.
“I’m also evangelical about encouraging
other women, and I’d always tell them
that if you want to achieve something and
believe that you can, just go for it. As long
as you still enjoy what you’re doing and
you can put your hand on your heart and
say you’re doing it for yourself, keep perse-
vering.”
Inspiring stuff.
STAR TURN
Among the other names collecting awards
for their performance over the year were
M&G, which won the UK asset manage-
ment firm award; Partners Group, which
was named the best fund of funds group
of the year; Rockspring, the property man-
ager of the year; Aberdeen Asset
Management, which won the emerging
markets manager of the year gong; and
Mercer, which took the investment con-
sultant of the year award. Mercer’s Boris
Mikhailov was also honoured with the
most promising rising star gong, though
he’s clearly already too busy raking in cash
for the firm to take time out to attend an
evening of entertainment.
BlackRock took two separate awards for
Nordic asset manager of the year and best
ETF provider for its iShares business, as a
consolation for boss Larry Fink losing his
chief executive of the year crown to
Jupiter’s Bonham Carter after holding it
for the past three years.
CITYA.M. 14 OCTOBER 2010 News 11

BAA to sell two airports

after losing court ruling
grounds of “apparent bias” in the lies,” he said. “But by and large the air-
▲

AVIATION
BY VICTORIA BATES
AIRPORT operator BAA is set to take
its battle with the Competition
Commission to the Supreme Court,
after the regulator won a High Court
ruling forcing it to sell off two more
airports to satisfy competition con-
cerns in the industry.
BAA’s Spanish owner Ferrovial will
now have to sell off Stansted and
either Glasgow or Edinburgh air-
ports, a year after offloading Gatwick
to the Global Infrastructure Partners
(GIP) consortium for £1.51bn.
The news comes as the latest devel-
opment in a long tussle between the
firm and the Competition
Commission, which produced its
original report into BAA’s dominance
of the UK’s major airports in March
last year, recommending the sale of
two more airports in addition to
Gatwick.
BAA took the case to the
Competition Appeal Tribunal (CAT),
where its appeal was upheld on the
original report. The airport operator lines would welcome increased com-
argued successfully that a member of petition, as airport charges are such a
the Commission’s advisory panel, large part of the cost base.”
Professor Peter Moizer, was potential- Ryanair, which has slimmed down
ly compromised, as he also acted as its operations at Stansted drastically
an adviser to the pension fund which in recent years, supported the
owns Manchester Airport Group, a Competition Commission in its case.
possible bidder for BAA’s assets. Chief executive Michael O’Leary
But the appeal was overturned yes- said the Court of Appeal ruling was “a
terday by Lord Justice Maurice Kay, great result for competition, con-
who agreed with the Commission sumer choice and passengers”. Ryanair boss Michael O’Leary was on hand to celebrate the ruling. Picture: PA
that Moizer’s connection was too
remote to have materially influenced
the outcome of the report.
BAA said it was “disappointed” by
the decision and would seek permis-
sion to appeal to the Supreme Court.
Charles Stanley aviation analyst
Douglas McNeill said the decision
would be broadly welcomed by the
airlines operating out of BAA’s air-
ports. “There is a desire to see BAA’s
dominance challenged, though many
would argue that regulatory changes
need to be introduced as well in order
to prevent a national monopoly being
replaced by several regional monopo-

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 12 News CITYA.M. 14 OCTOBER 2010

Tourism boosts Burberry

▲
RETAIL
BY HARRY BANKS
LUXURY group Burberry expects full-
year profit to reach the top half of ana-
lysts’ forecasts, after a 21 per cent rise
in first-half revenue boosted by strong
sales of coats and leather goods in
China and Europe.
The 154-year-old maker of raincoats
and handbags, shortlisted in this
year’s CityA.M’s inaugural awards, said
its expansion in stronger growing
emerging markets, coupled with a
surge in tourism from countries such
as China, would help it cope with aus-
Burberry boss Angela Ahrendts is bullish on the group’s outlook Picture: GETTY terity cuts being implemented in
developing economies. strong demand in China, Hong Kong,
Burberry shares, up around 75 per Britain, Italy and France, with many
cent this year, fell 3 per cent as some of these markets benefiting from a
analysts questioned whether the rise in tourist travel.
small profit upgrade was enough to
sustain recent gains. “While we see ANALYSIS l Burberry
upside risks from a long-term, growth
1050
1,006.00
p 13 Oct
story, we believe the short-term posi-
tive newsflow is largely priced in,”
said Citi analyst Thomas Chauvet. 950
Burberry said revenue rose 12 per
cent at constant exchange rates to
£359m in the three months to 30 850
September, excluding its restructur-
ing Spanish business.
That was up from £282m in the 750
first quarter. Growth was driven by 19 Jul 6 Aug 26 Aug 16 Sep 6 Oct

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CITYA.M. 14 OCTOBER 2010
Crossrail faces government pressure to trim its £15.9bn budget
Overhaul
for Crest
Nicholson
▲
PROPERTY
BY MARION DAKERS
TROUBLED housebuilder Crest
Nicholson faces another financial
restructuring as new majority share-
holder Varde examines the company’s
finances, people close to the business
said yesterday.
US-based Varde is working with
advisers Lazard and Bingham
McCutchen on the options for Crest,
which became 90 per cent owned by
its lenders following a £648m debt for
equity swap in January 2009.
Varde bought 30 per cent of Crest’s
equity and around a quarter of its
debt in September for an undisclosed
sum, when Lloyds Banking Group
sold its exposure to the company.
Varde has also acquired a small stake
from Royal Bank of Scotland.
Crest still has around £350m of sen-
ior debt and £150m of payment in
kind notes, which carry an interest
margin of 250 basis points. Varde,
which specialises in distressed real
estate assets, is understood to be
working with advisers to improve the
standing of the debt.
Crest made a loss of £50.7m in the
ten months to October 2009, the most
recent figures available, though the
non-listed firm has insisted it is per-
forming strongly this year. The com-
pany, like many property firms, was
hit badly by the slump in construc-
tion in the wake of the recession.
Crest was also targeted by the invest-
ment vehicle owned by Pizza Express
founder Hugh Osmond, but rejected a
£350m takeover offer in July.
A spokesperson for Crest Nicholson
declined to comment yesterday. Rick
Crossrail facing delays
▲
TRANSPORT
BY PHILIP WALLER
LONDON’S flagship Crossrail scheme
could be delayed by a year in the face
of government pressure to cut costs
on the £15.9bn project.
The new rail link across the capital
was due to open in 2017, but could
now be delayed to 2018, it emerged
yesterday.
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It is understood that officials have
told engineers to find major cost sav-
ings by reviewing the design of sta-
tions and identifying other efficiency
improvements.
Project bosses are facing pressure
from the Department for Transport
to cut costs as ministers finalise trans-
port’s settlement this week in next
week’s spending review, although the
DfT has said Crossrail should be a pri-
In cinemas Wednesday 6th October
News 13
ority.
A Crossrail spokesman declined to
comment. “As far as we’re concerned,
the process of the spending review is
still going through and we don’t have
anything to say about it,” he said.
Crossrail will run from
Maidenhead and Heathrow airport in
the west through central London to
Shenfield and Abbey Wood in the
east.
Profit jump
lifts shares
in Bodycote
▲
ENGINEERING
BY MARION DAKERS
SHARES in Bodycote shot up more
than nine per cent yesterday after the
engineer revealed that full-year prof-
it would come in at the top of ana-
lysts’ expectations.
Bodycote said renewed demand
from heavy truck customers such as
Scania and Volvo has helped push
revenue in the nine months to 30
September up 13 per cent.
Sales to the aerospace and defence
sectors saw some pick-up towards the
end of the third quarter, while gas
turbine revenues stabilised but
remained at low levels. Oil and gas
sales continued to be solid.
Turnover during the summer was
stronger than expected, as the com-
pany suffered less than feared from
customer summer shut-downs.
Analysts expect full-year operating
profit of £38.5m to £49m on the back
of sales of around £473.5m, said a
Thomson Reuters poll.
Bodycote said cost savings from its
restructuring were in line with the
£44.5m per year it predicted earlier
in 2010. The company said in
February it expected the economic
recovery to take place over a number
of years, as it posted pre-tax profit of
£3.7m for the year compared to
£67.6m in 2009.
Shares in the FTSE 250 firm closed
9.06 per cent up at 301p yesterday.
ANALYSIS l Bodycote
290 p
301.00
13 Oct
270
Noel, a partner at Varde, told City A.M.  
 





  
 


  

 
 

by e-mail: “We have spoke to Crest 250



 
 








  


Nicholson and other debt holders
about many things,” but could not
confirm a restructuring was in the
works.
Record gold and silver output at Fresnillo Decorator is back in black
▲
MINING
BY MARION DAKERS
A RECORD boom in gold and silver
output at miner Fresnillo caused
investors to rush to buy the stock yes-
terday.
The Mexico-focused miner said pro-
duction will be slightly above its full-
year targets thanks to a record third
quarter.
Gold output jumped 44.4 per cent
on the year-earlier quarter to nearly
92,000 ounces in the three months to
the end of September, while silver
rose 1.2 per cent to reach a record out-
put high of 10.69m ounces, the com-
pany said in an interim statement.
Analysts at Numis had expected
9.6m ounces of silver, or 10.4m includ-
ing the proceeds of Fresnillo’s
Silverstream contract, and 81,000
ounces of gold.
“This operational performance was
enhanced by the significant increase
in metal prices over the period,” said
chief executive Jaime Lomelin.
“These factors contributed to a
strong overall result in the third quar-
ter and give us confidence that the
year as a whole will be one of the
most successful in Fresnillo’s history.”
Shares shot up more than four per
cent following the announcement
yesterday, before closing up 3.3 per
cent at £12.82 in heavy trading.
CONSUMER
UPMARKET decorating firm Walker
Greenbank’s first-half pre-tax profit
has more than quadrupled, driven by
the strong sales of its mid-market
wallpaper and fabrics, the company
said yesterday.
The company declared its first
interim dividend payment in 13
years, of 0.15p a share.
Walker Greenbank said it was con-
230
210
19 Jul 6 Aug 26 Aug 16 Sep 6 Oct
fident of delivering a strong full-year
performance as it sees growth
momentum continuing.
Pre-tax profit for the six months to
the end of July was £2.3m, compared
with £600,000 a year ago.
Revenue was up 16 per cent at
£33.7m, with sales of the company’s
mid-market brands, Sanderson and
Harlequin, particularly strong.
Shares were up 5.9 per cent to 40.5p
on the Aim market yesterday.
 14 News
Terry Smith stands aside
to focus on fund business
▲
FINANCIAL SERVICES
BY BEN GRIFFITHS
CITY veteran Terry Smith is retiring as
a director and deputy chairman of
stockbroker Collins Stewart to focus
on his new asset management ven-
ture Fundsmith.
Smith, one of the UK’s best-known
investment bankers who led the man-
agement buyout of Collins Stewart
Terry Smith has been involved with Collins Stewart for the past 18 years after becoming chief executive in
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2000, will remain chief executive of
inter-dealer broker Tullett Prebon.
Smith will leave on 6 December after
almost two decades at the firm. He
was its chairman from 2006-2010.
“I have enjoyed my 18 years at
Collins Stewart. However, all good
things must come to an end and I will
now focus on Tullett Prebon and new
challenges, in particular my new fund
management venture Fundsmith. I
wish the management and staff of
Collins Stewart well and hope to see
the business continue to succeed in
the years to come,” Smith said.
The move into fund management
will open another chapter in Smith’s
varied 35-year career. He shot to fame
when the top-rated banking analyst in
the late 1980s, famously issuing a
TERRY SMITH
DEPUTY CHAIRMAN
COLLINS STEWART
Terry Smith grew up in East London,
attending Stratford Grammar School
before graduating with a first in History
from University College Cardiff in 1974.
He worked for Barclays Bank from
1974 to 1983, becoming an Associate of
the Chartered Institute of Bankers and
obtaining an MBA at The Management
College, Henley. Smith became a stock-
broker with W Greenwell & Co in 1984
and was the top-rated bank analyst in
London from 1984 to 1989. In 1990 he
was appointed head of UK company
research at UBS Phillips & Drew, a posi-
tion from which he was dismissed in
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“sell” recommendation on Barclays
while working for the bank’s own
investment banking arm BZW.
He was sacked from UBS Phillips &
Drew in 1992 after publishing
“Accounting for Growth”, a best-sell-
ing book that criticised the account-
ing practices used by some of the
biggest companies – including clients
of UBS.
Collins Stewart chairman Tim
Ingram said: “Terry Smith has been
synonymous with Collins Stewart for
many years and has been hugely influ-
ential in the development of the com-
pany and the creation of shareholder
value. On behalf of the board, I would
like to thank Terry for his contribu-
tion to the company and wish him
well for the future.”
1992 following the publication of the
best-selling book “Accounting for
Growth”. Smith joined Collins Stewart
shortly thereafter, and became a direc-
tor in 1996 and chief executive in
2000, leading the management buy-
out of the company, which was floated
on the London Stock Exchange five
months later. In 2003, Collins Stewart
acquired Tullett Liberty, and then in
2004 acquired Prebon Group, creating
the world’s second largest inter-dealer
broker. Collins Stewart and Tullett
Prebon were demerged in 2006.
Smith remains chief executive of Tullett
Prebon and has launched a new fund
management venture, Fundsmith.
A flying, sailing and shooting enthusi-
ast, Smith is passionate about history
and participates in competitive cycling
and boxing. www.terrysmithblog.com
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 16 News
Lloyds slashes
4,500 posts
from IT team
BANKING
▲
BY STEVE DINNEEN
LLOYDS Banking Group yesterday
announced it will shed 4,500 jobs
from its IT team as part of an ongoing
integration plan.
The bank said it will lose 1,600 per-
manent staff across the UK, 1,150 tem-
porary UK workers and 1,750 offshore
contractors. The redundancies will be
made by 2012.
Mark Fisher, director of group oper-
ations at Lloyds said: “We have miti-
gated the impact on permanent staff
with a significant release of tempo-
rary and contract staff.
“We will work closely with the col-
leagues affected by today’s announce-
ment to help them through these
changes.
“The changes we are putting in
Microsoft looks
to deepen ties
with Facebook
▲
RETAIL
MICROSOFT deepened its ties with
social networking company Facebook
yesterday, bolstering its fledgling
Bing search engine to catch up with
Google.
Starting yesterday, Bing will inte-
grate content from the world’s lead-
ing social network, tailoring search
results to users’ preferences based on
information from their network of
Facebook friends -- which Google does
not do. Microsoft invested $240m
(£151m) in Facebook in 2007, giving it
a 1.6 per cent stake in the site.
NOW SERVING FULL BEAN ESPRESSO.
© 2010 McDonald’s. FOR PEOPLE WHO LOVE GOOD COFFEE.
place will give us a world-class IT oper-
ation that will benefit our customers
and all our other stakeholders.”
Union Unite reacted with fury to
the announcement, calling on the
government to step in.
National officer, Cath Speight said:
“It is an absolute disgrace that Lloyds,
which is being kept alive by the tax-
payer, is cutting more jobs and mov-
ing other jobs out of the UK.
“It is now time for the government
step in and demand answers on
behalf of taxpayers and staff.
“Since the taxpayer stepped in to
keep this bank afloat the manage-
ment have shown no acknowledge-
ment for the dedication of their staff
who have ensured it can continue to
service their customers, instead
rewarding them with over 20,000
job cuts.”
Drinks sales see
faltering recovery
LEISURE
NEW figures show that the alcohol
industry in the UK is experiencing an
“unsteady and uneven” recovery.
Latest HMRC figures show beer
sales fell in July, adding to publicans’
woes. The volume of beer released
for UK consumption was down 1.7
per cent compared to the figure in
June and 5.1 per cent year-on-year.
The amount of beer consumed in
licenced premises has now fallen 25
per cent since 2002.
The volume of wine released for UK
consumption was up by 0.82 per cent
GEKKO IS GOOD FOR BOX OFFICE
CINEMA-goers have proved high finance is still a firm favourite by sending financial
drama “Wall Street: Money Never Sleeps” to the top of the UK box office. The movie, star-
ring Michael Douglas in a reprise of his role as corporate raider Gordon Gekko, took
£1.8m, easily beating romantic comedy “Life As We Know It”.
compared to June and 2.88 per cent
year-on-year.
Spirits were down 0.4 per cent on
June but were up 0.98 per cent year-
on-year.
Total alcohol volumes are up 2.8
per cent year-on-year.
In value terms alcohol consump-
tion is still well down on the peak
level of £43.4bn sold in the UK in
2007.
In terms of market share, wines
and ciders are increasing at the
expense of beer, which fell to 41.6
per cent of all sales.
TM
EU plans to tighten rules
on offshore oil drilling
▲
ENERGY
THE European Commission will pro-
pose tougher rules on offshore oil and
gas drilling in the first half of 2011, but
will not demand a temporary halt to
new drilling operations, the EU’s ener-
gy chief said yesterday.
The plans are intended to guard
against a repeat of BP’s Deepwater
Horizon disaster in the Gulf of Mexico,
which killed 11 workers and led to the
worst oil spill in US history.
After BP’s spill, the Commission
floated the idea of a moratorium on
new deep water drilling operations
until the exact causes of the disaster
had been fully investigated, but has
CITYA.M. 14 OCTOBER 2010
NEWS | IN BRIEF
State cuts to hit 50,000 firms
More than 100,000 companies in
Britain are in financial distress, with a
combined debt pile of £58bn, according
to insolvency group Begbies Traynor.
The company’s Red Flag Alert report on
troubled companies said around 50,000
business are likely to be hit by the gov-
ernment’s looming spending cuts. The
report said construction, IT, recruitment
and advertising sectors were most vul-
nerable as the austerity measures start
to bite.
SocGen to fight price-fixing fine
Société Générale will challenge a fine by
the French competition regulator for fix-
ing the price of clearing cheques elec-
tronically. L'Autorite de la Concurrence
fined the bank and 10 others a total of
€384.9m (£338m) last month for collud-
ing to charge unjustified fees on cheques
and other interbank services when they
switched to a new digital clearing sys-
tem between January 2002 and July
2007.
Lone Star eyes IKB bank sale
Lone Star is getting ready to sell
German bank IKB and could strike a
deal in the first quarter of 2011, provid-
ing an opportunity for lenders to gain a
foothold in Europe's largest economy.
Lone Star's European head Bruno
Scherrer told a German newspaper the
US-based private equity house is getting
ready to shop around the German
lender.
since softened its stance.
The new rules would introduce
stricter licensing regimes and require
drilling companies to prove they can
cover the full cost of any future acci-
dents, possibly through insurance
schemes, the Commission said.
“We will hopefully in spring of next
year be able to make the relevant pro-
posals for legislation,” said EU energy
commissioner Guenther Oettinger,
adding that any plans would need to
be approved by EU governments and
lawmakers. The new rules could
require companies to build up cash
reserves to cover at least part of the
cost of future clean-up operations.
 CITYA.M. 14 OCTOBER 2010 News 17

Rivals circle Turkey’s Dogan Liberia seeks trial of UK

MEDIA being “too rich”. A senior Dogan Yayin executive,
national over carbon deal
▲

BY HARRY BANKS Several big media conglomerates Vuslat Dogan Sabanci, who is chair-
such as Time Warner and News Corp woman of unit Hurriyet Gazetecilik,

GERMANY’S RTL Group and US-based
Time Warner are believed to have sub-
mitted bids for assets belonging to
Turkey’s largest media company
Dogan Yayin.
Dogan Yayin, which owns Turkey’s
largest broadcasting network as well
as several newspapers and magazines,
is valued at around $2bn (£1.25bn).
News Corp had submitted a bid but
pulled out yesterday because it regard-
ed the value of the media assets as
are seeking to expand their holdings
in emerging regions like India, central
Europe and Latin America.
The company, which is embroiled in
a dispute with the government over
record tax fines that exceed its market
value, is seeking to sell its partnerships
and assets.
Private-equity companies are
thought to be interested in Dogan’s
newspapers, which include mass-cir-
culation Hurriyet and Milliyet dailies.
told CNBC-e television that Dogan
Yayin had received non-binding offers.
The company, however, said in a fil-
ing with the stock exchange it had pre-
viously announced its plan to sell
assets and that there were no new
developments. Goldman Sachs is
thought to be running talks with
potential buyers. News Corp already
part-owns a Fox channel in Turkey, but
declined to comment further on the
sale of Dogan Yayin.
▲
COMMODITIES
LIBERIA is seeking to prosecute a
British citizen for bribery in a pro-
posed carbon deal that would have
given him control of a fifth of the
West African country’s rainforests,
the government said yesterday.
Liberia began investigating the
accord to grant 400,000 hectares of
rainforest to British firm Carbon
Harvesting Corporation in July after
governance watchdog Global
Witness said the deal involved
fraud.
The accord would have allowed
CHC to sell carbon credits from the
vast area of forest to companies
seeking to offset their emissions on
international carbon markets.
CHC’s chief executive Michael
Foster was arrested by British police
in June and was released without
charge.

Hedge fund
EU proposals
THE GLOBAL BILLION DOLLAR CLUB Source: HedgeFund Intelligence

Location

New York, USA

Assets ($bn) No. of Firms % Total Assets % Total Funds

706.44 124 46.03% 39.49%

growth begins
target radical London, UK

Connecticut, USA
238.82

168.1
52

25
15.56%

10.95%
16.56%

7.96%
to slow in 2010

audit revamp

▲
HEDGE FUNDS
GROWTH in hedge fund assets slowed
California, USA 70.03 16 4.56% 5.10% during the first half of 2010, climbing
two per cent to reach $1.87 trillion
(£1.18 trillion).
Massachusetts, USA 89.148 12 5.83% 3.82% This was a marked slowdown from
the second half of 2009, when the
PROFESSIONAL SERVICES marketplace,” Barnier said yesterday, industry bounced back 10 per cent
▲

calling for a “frank and open” discus-

BY VICTORIA BATES
“BIG FOUR” accountancy firms could
be forced to scale back their audit
activities in the future, if a European
Commission consultation on shaking
up the industry finds that the scale of
individual players poses a systemic
risk.
The EU’s internal markets commis-
sioner Michel Barnier yesterday
launched the wide-ranging consulta-
tion to examine whether the role of
auditors can be altered to reduce the
likelihood of future shocks to the
financial system.
Barnier highlighted a number of
areas to be explored in addition to the
impact of having a number of domi-
nant audit firms – including the inde-
pendence of firms also providing
non-audit services to clients, the relia-
bility of audited financial statements,
EU-level supervision and the specific
audit needs of the SME market.
“The veracity of financial state-
ments is central to confidence in the
Hong Kong 13.47 10 0.88% 3.18% following the financial meltdown,
sion of the issues facing the industry according to data by HedgeFund
where “no subject should be taboo”. Texas, USA 25.59 8 1.67% 2.55% Intelligence
But the suggestion of a possible The incremental growth means the
enforced scaling-back of larger audi- industry is still well below its historic
tors’ remits left the “Big Four” reel- New Jersey, USA 25.32 5 1.65% 1.59% high of $2.65 trillion, set during 2007
ing, with industry participants before the global financial crisis took
warning that size can be an impor- hold. As in previous years, the lion’s
tant factor in improving the quality Sydney, Australia 19.67 5 128 1.59% share of global assets are managed in
of service provided to clients. the United States, with the 217 mem-
“Modern business is complex and bers of the Absolute Return Billion
demands auditors to have geographic Minnesota, USA 16.53% 5 1.08% 1.59% Dollar Club alone accounting for
scale and access to many areas of combined assets of over $1.2 trillion.
expertise which is available in a multi New York remains the biggest sin-
disciplinary environment,” cautioned Singapore 6.15% 5 0.40% 1.59% gle centre of the industry, followed by
KPMG. “We believe that market inter- London which is still in second place.
ventions, such as reducing the scale Assets in standard European hedge
of the existing firms, would be preju-
Illinois, USA 22.05 4 1.44&% 1.27% funds did not rise at all in the first
dicial to audit quality.” half.
Paris, France 15.39 4 1.00% 1.27% The rising centres include places in
The EU’s internal markets Asia such as Hong Kong, where the
number of firms in the Billion Dollar
commissioner Michel
Hamilton, Bermuda 11.22 4 0.73% 1.27% Club jumped from six to 10 in the
Barnier has launched a first half of the year; and in Latin
consultation to radically America, where there are now five
shake up the audit sector Stockholm, Sweden 14.34 3 0.93% 0.96% firms with $1bn or more in either Sao
Paulo or Rio de Janeiro.

THE FULL BEAN RANGE.

TM

© 2010 McDonald’s. FOR PEOPLE WHO LOVE GOOD COFFEE.

 18 News
FinnCap hires finance director Autonomy wins contract
FINANCIAL SERVICES
▲
BY VICTORIA BATES
SMALL CAP broker finnCap has
appointed former fund manager Tom
Hayward as its new finance director,
as the next step in its development as
an independent firm.
FinnCap, led by chief executive
Sam Smith and chaired by private
equity veteran Jon Moulton, hired
Hayward from Herald Investment
Management, a fund management
group specialising in the technology,
media and telecoms sectors. He
SEC sets limits
on derivatives
industry in US
REGULATION
▲
BY HARRY BANKS
THE top US securities regulator last
night took its first stab at policing the
$615 trillion (£387 trillion) over-the-
counter derivatives market with a
plan to mitigate conflicts of interests
at venues that will handle the swaps.
The Securities and Exchange
Commission voted 5-0 to propose
ownership limits on the swaps trad-
ing venues and clearinghouses,
which will assume the risk if one
party defaults.
The derivatives -- financial instru-
ments companies use to hedge risk
such as interest rates -- have been fin-
gered for contributing to the worst
financial crisis since the Great
Depression.
“This proposed rule is intended to
make these entities less susceptible to
promoting the interests of a few par-
ticipants to the potential detriment
of others,” said SEC chairman Mary
Schapiro.
The SEC and fellow market regula-
worked there for almost a decade, lat-
terly as one of two managers responsi-
ble for Herald’s £50m venture capital
funds.
The appointment leaves Smith free
to focus on the ongoing development
of the business, which earlier this
Tom Hayward has joined
finnCap as its new
finance director, from
fund manager Herald
Investment Management
tor the Commodity Futures Trading
Commission are crafting dozens of
rules to regulate the opaque market
under the Dodd-Frank financial
reform bill.
The SEC proposed two plans to
crack down on potential conflicts at
clearinghouses whose members
could try to limit which products
could be cleared.
Under the SEC’s first plan, a clear-
inghouse member could only hold up
to 20 per cent of a clearinghouse.
Members collectively could only be
allowed to hold up to 40 per cent of a
clearinghouse, and a third of the
clearinghouse’s board of directors
must be independent.
Under the alternative plan, a clear-
inghouse member would only be
allowed to own a five per cent voting
stake and the majority of the venue’s
board would have to be independent
directors. The SEC’s proposal is simi-
lar to a plan the CFTC floated earlier
in October, though the securities reg-
ulator is pushing for more independ-
ent board directors.
NETWORKING.
SOCIALISING.
CELEBRATING.
You, too, can be a part of the inaugural City A.M. Awards dinner and ceremony on Thursday 28 October 2010
at the Grange St Paul’s Hotel. Meet the City’s personalities, join in the applause of some of the finest companies
and individuals in the business and financial community, enjoy an excellent dinner and leading entertainment,
renew old acquaintances and make new friends. Tables are limited, so book your places early.
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If you have any questions, please contact Jo Pead on 020 8267 4043 / jo.pead@cityamawards.com
year completed a £2.5m management
from UK finance regulator
buy-out of the remaining 50 per cent
stake held by its former parent JM
Finn. TECHNOLOGY
▲
It is set to move out of JM Finn’s
Coleman Street offices at the end of SOFTWARE group Autonomy said yes-
the month, into new premises of its terday it had signed a major deal with
own on New Broad Street. a UK regulator, believed to be the
“It is the right time to enlarge our Financial Services Authority.
management team as we continue to The group, whose share price fell
gain market share in the smaller after it revised its sales estimates
company space,” said Smith. “We feel down by three per cent last week, said
that Tom has the right experience it had entered into “a multi-million
and understanding of our market to dollar agreement with a UK regulato-
help us do this.” ry authority responsible for financial
BEST OF THE BROKERS
ANALYSIS l Atkins ATKINS
800 p 774.50 Brewin Dolphin has downgraded the design
13 Oct and engineering firm to “reduce” from
760
720
“hold” with an unchanged target price of
675p, ahead of the government spending
review this month. The broker believes that
any upside from the firm’s recent acquisi-
tion of American peer PBSJ will be offset
680
19 Jul 6 Aug
ANALYSIS l Whitbread
26 Aug
1,679.00
16 Sep 6 Oct
by spending cuts. Brewin sees scope for a
better upside from Hyder and RPS.
WHITBREAD
1700 p
13 Oct Numis has downgraded the stock to “add”
from “buy” following its recent strong trad-
1600
ing performance, but has increased its tar-
get price by £1 to £19. The broker expects
another upbeat update in next Tuesday’s
1500
interim results, with particularly strong
sales at Premier Inn and coffee chain
1400 Costa. In the longer term, Numis predicts
sales growth in all areas to accelerate.
19 Jul 6 Aug 26 Aug 16 Sep 6 Oct
ANALYSIS l Provident Financial PROVIDENT FINANCIAL
Arden Partners has upgraded the specialist
900 p
lender to “neutral” from “sell” with an
819.00 unchanged target price of 800p. The bro-
13 Oct ker believes Provident’s 7.8 per cent divi-
860
dend yield will support the price, but warns
its dividend policy puts strain on the bal-
ance sheet that could be battered further
820
by the austerity measures. Arden predicts
a pre-tax profit of £136.5m this year.
12 Jul 6 Aug 26 Aug 16 Sep 6 Oct
To appear in Best of the Brokers email your research to notes@cityam.com
CITYA.M. 14 OCTOBER 2010
industry oversight”, although it
declined to give further details.
The contract is understood to
involve Autonomy’s technology used
by government agencies and compa-
nies to organise and analyse data in
the area of compliance. Cambridge-
based Autonomy has more than
20,000 customers including BAE
Systems, the BBC, and Deutsche Bank.
Despite the deal shares in the firm
ended 1.4 per cent down at 1,424p.
NEWS | IN BRIEF
Hochschild ups Peru stake £10m
South American precious metals pro-
ducer Hochschild has doubled its inter-
est in a gold and silver mining project in
Peru, it said yesterday, paying $15m
(£10m) for a 60 per cent controlling
interest to joint venture partner
International Minerals Corporation
(IMZ). The London-listed firm also
acquired a 3.2 per cent stake in IMZ
through a private placing of shares for
$20m. Hochschild has agreed to fund
the first $100m of development costs in
the Inmaculada project in Peru.
ISA allowance to rise from April
The Individual Savings Account (ISA)
limit will be increased by £470 in April
next year, the government has con-
firmed. The increase is in line with the
rate of inflation of 3.1 per cent in
September as previously announced in
the Budget. The increase means the
amount savers can put into a stocks and
shares ISA will rise from £10,200 to
£10,670 in April 201 and, from £4,865
to £5,335 in the case of a cash-only ISA.
More than 20m UK residents are esti-
mated to have a tax-free ISA.
UK start-ups at record high
The number of new UK business start-
ups reached 204,361 in the first half of
2010, the largest number for well over a
decade, a report said yesterday.
Business support group Yoodoo, which
analysed Companies House data said
there was a 51 per cent increase in the
number of new businesses being creat-
ed, compared to the same period two
years ago at the height of the global
economic downturn. The research also
showed that only 0.6 per cent of firms
founded in 2009 had since gone bust.
CITYA.M. 14 OCTOBER 2010 News 19

Intel will finally

Tech firms get
ANALYSIS l How Intel’s results stack up

Revenue $11.1bn enter tablet and

finance boost Gross Margin
phone markets
66%

▲
TECHNOLOGY
BY STEVE DINNEEN
from 17.5 per cent to 20 per cent in
Operating Income $4.1bn INTEL is “in talks” with manufactur-
▲

TECHNOLOGY
BY STEVE DINNEEN
FINANCE firms replacing their com-
puting infrastructure is driving a
surge in the technology industry,
according to Intel’s European boss
Tristan Wilkinson.
January, as a major problem. ers and will soon belatedly enter the
Wilkinson added: “We don’t think smartphone and tablet markets.
it will have an explicit impact on our The chip maker has been left
business. Computers are part of
everybody’s lives now. It isn’t some-
thing people will stop buying. People
Net Income $3bn behind in the market for mobile
devices, which has grown exponen-
tially since the launch of Apple’s iPad
want to be up to date, with the latest and the growing range of next-gener-

Earnings per share 52 cents

A number of major UK finance
firms have updated their systems to
cope with increasing demand for
high speed transactions, after a two-
year lag caused by the recession.
Intel on Tuesday reported a third
successsive quarter of record results,
56 per cent ahead of comparative pre-
recession levels.
However, Wilkinson told City A.M.
the firm is still “cautious” about the
UK due to macroeconomic condi-
tions, especially in the consumer sec-
tor, which saw a dip in profits.
But he said: “We are not worried
about a double dip recession – we see
continued growth – but there is still
pressure on consumer demand.”
He added he does not see the
impending hike in the rate of VAT,
technology.”
He also called for the technology
sector to engage with the govern-
ment in its austerity drive, saying
investment in the right technology
can be the difference between spend-
ing pennies and spending pounds.
Intel’s results raised hopes that the
technology sector could end 2010 on
a strong note. However, analysts
warned not all chip makers would
fare as well as Intel.
Intel said that by early 2011 it
should close its acquisitions of the
wireless unit of German chipmaker
Infineon for $1.4bn (£880m) and secu-
rity software specialist McAfee for
$7.7bn. Both deals are seen as step-
ping stones into the growing mobile
market.
ation smartphones.
Intel’s European boss Tristan
Wilkinson told City A.M. the impact of
tablet computers remains to be seen
but admitted it will transform the PC
market.
He said chips similar to Intel’s power
saving Atom range were the “logical
next step” for the mobile market. He
also said the firm will soon release its
new range of graphics-oriented chips,
codenamed Sandy Bridge.
Intel’s European boss
Tristan Wilkinson says
the firm is in talks
with mobile device
manufacturers
Source: Intel

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

vice president and held the role of divi- Paragon SWIP

PwC
The accountancy firm has appointed three new
senior managers to its business continuity
team, part of the risk assurance practice.
Tom Buchanan, who previously worked at
Barclays and Tesco, joins the crisis manage-
ment team. James Cooke joins from Deloitte to
focus on IT disaster and service recovery plan-
ning, while James Crask (pictured) will develop
business continuity services aimed at the public
sector, moving across from the Cabinet Office.
Barclays Wealth client services, a new role within the
The wealth management arm of business.
Barclays has appointed Anne Grim as a Grim joins from Wells Fargo
managing director and head of global Financial, where she was an executive
sional marketing, eBusiness and strate-
gic partnership leader. She has also
previously worked for American
Express and Mastercard.
Matrix
The financial services group has
appointed Tom Plinston, Kapilan Pillai
and Antoine Hnein to the equity
research team within its investment
banking business.
Plinston will cover new energy and
cleantech and joins from Collins
Stewart; Pillai will cover financials and
was previously at FBR Capital Markets;
and Hnein moves over from Goldman
Sachs to cover the leisure sector.
The buy-to-let mortgage lending spe-
cialist has hired Peter Shorthouse as
director of treasury and structured
finance.
Shorthouse joins from UBS, where he
was head of European securitisation. In
his new role, he will report to Paragon’s
finance director Nick Keen and will
spearhead the group’s residential mort-
gage-backed securities (MBS) strategy.
The appointment comes after
Paragon last month announced its
return to new lending in the buy-to-let
mortgage market, with plans to
arrange term funding in the MBS mar-
kets once it has aggregated a suitable
loan portfolio.
The Scottish Widows Investment
Partnership has hired Ian Clifton as
commercial director in its fixed income
team.
Clifton, who will be based in London,
has over 25 years of experience in the
capital markets, most recently as a sen-
ior investment consultant with Mercer.
He was also previously head of deriva-
tives trading and head of FX trading in
London for Nomura.
RBC Capital Markets
The investment banking firm has hired
Guy Mullin-Henderson as head of busi-
ness support services.
He joins from NM Rothschild.

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
Blood on the beach as Apprentices get nasty
APPRENTICE REVIEW
GRAEME ALLISTER
T
HE great mystery of The
Apprentice is when everyone
actually sleeps. After last week’s
midnight challenge, they were
this time woken at 5.30am.
NEWS | IN BRIEF
Wal-Mart sees US sales improve
Wal-Mart should see improvement in sales at
its US discount stores in the fourth quarter as
the company returns items to shelves and
focuses anew on low prices, the company’s
chief executive said yesterday. “I expect to see
positive sales results in this fourth quarter,”
Mike Duke said of the unit at the world’s
largest retailer’s annual meeting with analysts
and investors. The US unit has seen sales at
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Summoned to Heathrow, it was an
elaborately cruel way to announce
their new task: to create and pitch a
new beach accessory.
In the ever-inspiring confines of
Terminal 5, the teams had a few prob-
lems coming up with ideas. “We
haven’t solidified our product choice,”
said Paloma, euphemising as only an
Apprentice candidate can. After much
squabbling (project manager Laura’s
leadership style is best described as
“incompetent supply teacher”) the
girls unhappily settled on Joanna’s
idea of a book stand. “It just makes
reading that bit much more easier,”
she explained. One wonders what
stores open at least a year fall in each of the
past five quarters. Wal-Mart has faced
increased competition from cut-price stores
that have attracted customers hit hardest by
the recession. At the same time, customers
feeling more secure have traded up to rivals.
Wal-Mart has been hit by a poorly executed
attempt to cut down on the products in its
stores and a failed attempt to increase traffic
with thousands of temporary price “rollbacks”.
of the largest Business Schools
based in the heart of London.
Meet this challenge today by
submitting your CV and 1000 word
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books Joanna has been reading.
The boys did slightly better, thanks
to City banker Stella being catapulted
into their team. As team leader she
got to showcase many talents: negotia-
tor, peacekeeper, babysitter. She even
got to be a model as the boys gallantly
volunteered her services to flog their
product. Going shopping, they
assured her they would choose some-
thing classy. “Do you have any bikinis
with tassels?” they enquired.
Their new invention was a hybrid of
a cool box and beach towel: the cüüli.
Why the umlauts? “It makes it trendy,
it makes it cool” insisted Alex. Alex is
currently unemployed.
CINVEN POISED TO CUT JOST STAKE
PRIVATE equity firm Cinven is understood to be close to ceding part of its stake
in German truck and trailer parts maker Jost to creditors to cut debt. Jost’s man-
agement, its private equity backer, and holders of just under €400m of loans are
finalising a debt-for-equity swap after an earnings slump.
Aer Lingus profit to
hit top of forecasts
AVIATION
▲
BY HARRY BANKS
IRISH airline Aer Lingus yesterday
said it expected to report full year
underlying operating profit at the
top end of market forecasts provid-
ed industrial action by cabin crew
and pilots doesn’t disrupt opera-
tions.
Earlier cabin crew at the former
flag carrier started “work to rule”
action against management plans
for increased working hours at the
airline by sticking to original ros-
ters. The airline also faces a ballot by
its pilots over possible industrial
action.
Aer Lingus said trading in the
third quarter, and in the month of
September in particular, had been
With prototypes produced, it was
time to pitch to three retailers, includ-
ing World Duty Free and Boots. The
boys, rather dramatically, announced
that the “age of the beach towel was
over”. Not to be outdone, the girls baf-
fled the experts with talk of “comfort-
ability” and giving the customer
“consumer happiness”.
Alas, the customer will never get to
experience this, as all three retailers
declined to place orders for the Book
Eeze, a first in the history of The
Apprentice. At this point the bitching
and bickering went nuclear, as accusa-
tions and recriminations bounced
round the boardroom.
stronger than expected, primarily as
a result of improved yields. Forward
revenues suggest that October and
November will also be ahead of
expectations, the company said.
However, bookings for December
and the first quarter of 2011 appear
much weaker than hoped.
“The group is not yet able to deter-
mine whether this reflects the
recent trend towards later bookings
or an underlying softness in
demand,” Aer Lingus said.
Looking ahead to 2011, Aer Lingus
said it shared concerns recently
expressed by the International Air
Transport Association that the dura-
bility of the current aviation sector
upturn is in increasing doubt in
both Europe and North America
and that growth will slow in 2011.
CITYA.M. 14 OCTOBER 2010
Laura blamed Joanna for forcing
through a bad idea, Joanna claimed
Laura had scuppered their chances by
denying Boots exclusivity while Lord
Sugar’s new sidekick Karren Brady
wondered whatever happened to sis-
terhood.
Joining Laura and Joanna in the fir-
ing line was Joy. Rarely has someone
been less appropriately named but her
major crime seemed to be not shout-
ing as loudly as the rest of them. It
was enough for Lord Sugar though; he
accused her of contributing nothing
to the team and hailed her a black cab.
Perhaps time for a relaxing beach hol-
iday.
Petronas IPO to
raise $4.2bn at
$1.69 a share
▲
ENERGY
BY HARRY BANKS
MALAYSIA’S Petronas Chemicals is
likely to raise $4.2bn (£2.6bn) in
Southeast Asia’s biggest ever IPO after
setting an indicative price range for
the float, analysts said.
The unit of Malaysian state oil giant
Petronas indicated at a briefing it is
likely to price its IPO at 5.05 ringgit for
retail investors and 5.20 ringgit ($1.69)
for institutions, analysts said. However,
a spokesman said the price range for
the IPO has not been set.
“A price range has not yet been
determined and the information will
be distributed through the proper
channels when it has been set,” the
spokesman said, adding the process
was still very much in “its early days”.
The IPO comes as Asian capital mar-
kets are seeing a flurry of multi-billion
deals, helped by a flood of liquidity,
low interest rates and strong economic
growth. Petronas Chemicals’ IPO is set
to exceed Maxis’ $3.3bn IPO last year
and also raise more capital than the
proposed listing of another Petronas-
linked vehicle, Malaysia Marine and
Heavy Engineering.
It added that weakness in North
America and Europe would be fur-
ther compounded by the weakness
of the Irish economy.
Market expectations for Aer
Lingus’ full year operating profit
range between €25m (£22m) and
€29m, with the consensus at €27m.
ANALYSIS l Aer Lingus
1.13
1.15 € 13 Oct
1.05
0.95
0.85
19 Jul 6 Aug 26 Aug 16 Sep 6 Oct
 Markets&Investment
21

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .300.40 +5.70 310.00 246.90 Compass . . . . . . . . . . . . . . . . . .531.00 +6.00 574.50 382.00 JPMorgan Emerg Mkts . . . . . . . .612.00* +16.50 612.00 443.00 SABMiller . . . . . . . . . . . . . . . . .2081.50 +41.50 2090.00 1571.00
3i Infrastructure . . . . . . . . . . . . . 113.90 –0.10 115.00 97.00 Cookson . . . . . . . . . . . . . . . . . . .575.00 +17.00 616.00 347.60 Jupiter Fnd Mgmt . . . . . . . . . . . .260.40 +4.10 264.00 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .276.30 +4.70 286.80 208.20
A.B. Foods . . . . . . . . . . . . . . . .1053.00 +5.00 1096.00 790.00 Croda Intl . . . . . . . . . . . . . . . . .1497.00 — 1540.00 692.00 Kazakhmys . . . . . . . . . . . . . . . .1405.00 +30.00 1634.00 955.50 Sainsbury(J) . . . . . . . . . . . . . . . .388.10 –1.30 397.00 307.60
Aberdeen Asset Man . . . . . . . . . .170.60 +0.80 172.20 111.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .525.00 +3.00 539.00 381.00 Kesa Electricals . . . . . . . . . . . . .165.30 +14.40 172.40 98.45 Schroders . . . . . . . . . . . . . . . . .1487.00 +8.00 1500.00 1056.00
Admiral. . . . . . . . . . . . . . . . . . .1634.00* +26.00 1695.00 1003.00 Dana Petroleum . . . . . . . . . . . .1801.00 +2.00 1817.00 968.50 .LQJÀVKHU . . . . . . . . . . . . . . . . . .238.30* +6.60 255.00 196.50 Schroders N/V. . . . . . . . . . . . . . 1196.00 +11.00 1200.00 864.00
Aegis . . . . . . . . . . . . . . . . . . . . .128.60 +2.30 137.30 103.10 Davis Service . . . . . . . . . . . . . . .415.20* +2.10 442.30 356.00 Ladbrokes . . . . . . . . . . . . . . . . .135.60* –1.00 164.60 114.60
Afren . . . . . . . . . . . . . . . . . . . . .120.00 +2.30 121.80 76.50 Debenhams . . . . . . . . . . . . . . . . .71.85 +1.20 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .357.70* +1.60 372.30 157.30 Scot. & Sthrn Energy. . . . . . . . . 1119.00 –17.00 1206.00 1006.00
African Barr Gold . . . . . . . . . . . .623.50 +14.50 685.00 520.50 Derwent London . . . . . . . . . . . .1586.00* +21.00 1633.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .579.50* +9.50 579.50 416.70 Scottish Mortgage. . . . . . . . . . . .659.00 +15.00 659.00 475.00
Aggreko . . . . . . . . . . . . . . . . . .1660.00* +53.00 1661.00 719.00 Dexion Absolute . . . . . . . . . . . . .138.80 — 148.00 131.20 Land Securities . . . . . . . . . . . . . .679.50* +7.00 743.50 543.00 SEGRO . . . . . . . . . . . . . . . . . . . .299.60 +7.60 389.90 244.00
Alliance Trust . . . . . . . . . . . . . . .348.20* +5.80 352.70 292.80 Diageo . . . . . . . . . . . . . . . . . . . 1143.00* +19.00 1176.00 930.50 Legal & General . . . . . . . . . . . . .106.20 +2.90 106.70 69.05 Serco . . . . . . . . . . . . . . . . . . . . .619.50* +5.50 656.50 491.20
AMEC . . . . . . . . . . . . . . . . . . . .1031.00 +36.00 1039.00 728.00 Dimension Data . . . . . . . . . . . . .120.00 +0.30 125.50 68.75 Lloyds Banking Gp . . . . . . . . . . . .72.60 –0.05 79.15 45.30 Severn Trent . . . . . . . . . . . . . . .1344.00 –1.00 1404.00 939.50
Amlin . . . . . . . . . . . . . . . . . . . . .405.10 +0.10 437.60 350.80 Dixons Retail . . . . . . . . . . . . . . . .28.00 +0.70 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .131.90* +1.80 149.10 100.80 Shaftesbury . . . . . . . . . . . . . . . .460.00 +6.90 465.00 348.00
Anglo American . . . . . . . . . . . .2884.00 +147.50 3015.50 2153.00 Domino’s Pizza . . . . . . . . . . . . . .462.00 +2.20 484.70 278.20 London Stk Exchange . . . . . . . . .704.00 +23.00 949.50 540.50 Shire. . . . . . . . . . . . . . . . . . . . .1482.00 +34.00 1532.00 999.00
Antofagasta . . . . . . . . . . . . . . .1301.00 +52.00 1344.00 755.50 Drax . . . . . . . . . . . . . . . . . . . . . .380.70* +2.40 479.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1829.00 +59.00 2198.00 1344.00 Smith & Nephew . . . . . . . . . . . . .555.00 –14.00 700.50 525.50
Aquarius Platinum . . . . . . . . . . .390.00 +25.90 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .460.00 +11.20 463.10 319.40 Man . . . . . . . . . . . . . . . . . . . . . .269.00 +12.20 373.60 199.60 Smith(Ds) . . . . . . . . . . . . . . . . . .164.00 +2.30 164.50 103.00
ARM Holdings . . . . . . . . . . . . . . .382.30 +6.60 419.50 143.00 Easyjet . . . . . . . . . . . . . . . . . . . .454.50 +9.60 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .418.90 +9.50 418.90 321.90 Smiths . . . . . . . . . . . . . . . . . . .1285.00 +25.00 1297.00 885.00
Ashmore . . . . . . . . . . . . . . . . . . .361.70 +5.50 366.90 215.00 Edinburgh Inv Tst . . . . . . . . . . . .435.50 +6.50 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .315.30 +6.30 331.00 229.80 SOCO Intl . . . . . . . . . . . . . . . . . .346.70 –22.70 510.00 340.00
Astrazeneca . . . . . . . . . . . . . . .3340.00 +19.50 3389.50 2668.00 Electrocomponents . . . . . . . . . . .244.50 +1.50 251.00 144.80 Melrose . . . . . . . . . . . . . . . . . . .300.40 +8.30 301.50 160.00
Atkins(Ws) . . . . . . . . . . . . . . . . .774.50 +9.50 801.00 532.50 EnQuest . . . . . . . . . . . . . . . . . . .131.80 +0.80 132.50 87.35 Mercantile IT . . . . . . . . . . . . . . . .985.50* +10.50 1002.00 822.50 Spectris . . . . . . . . . . . . . . . . . . 1110.00 +5.00 1125.00 653.00
Autonomy Corp . . . . . . . . . . . .1424.00 –20.00 2012.00 1278.00 Essar Energy . . . . . . . . . . . . . . .503.50 +4.40 510.00 358.50 Michael Page Intl. . . . . . . . . . . . .490.80 +8.00 490.80 316.70 Spirax-Sarco Eng . . . . . . . . . . .1815.00 –4.00 1859.00 1060.00
Aveva . . . . . . . . . . . . . . . . . . . . 1411.00 +10.00 1504.00 856.50 Eurasian Nat Res . . . . . . . . . . . .930.00 +16.00 1276.00 801.00 Micro Focus . . . . . . . . . . . . . . . .395.50 +9.50 550.00 272.20 Spirent Comms . . . . . . . . . . . . . .146.80 +3.80 148.20 86.50
Aviva . . . . . . . . . . . . . . . . . . . . .399.00* +4.00 469.90 290.20 Euromoney Inst Inv . . . . . . . . . . .598.50 –6.50 630.00 371.80 Millen & Copthorne . . . . . . . . . . .555.00 +15.50 556.50 321.40 Sports Direct Intl . . . . . . . . . . . . .152.80 +5.90 154.30 89.85
Babcock International . . . . . . . . .589.00 +9.00 660.50 489.00 Experian . . . . . . . . . . . . . . . . . . .700.00 +19.50 700.50 527.00 Misys . . . . . . . . . . . . . . . . . . . . .289.40 — 298.00 196.60 SSL Intl . . . . . . . . . . . . . . . . . . . 1159.00 +2.00 1190.00 616.00
BAE Systems . . . . . . . . . . . . . . .365.00 +10.00 389.90 288.10 Ferrexpo . . . . . . . . . . . . . . . . . . .349.00 +11.80 396.20 140.70 Mitchells & Butlers . . . . . . . . . . .304.30 +3.20 343.90 228.30 St James’s Place . . . . . . . . . . . . .276.00 +0.70 298.00 203.40
Balfour Beatty . . . . . . . . . . . . . . .263.90* +0.30 304.80 228.60 FirstGroup . . . . . . . . . . . . . . . . .373.80 +4.10 428.40 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .196.70 +2.80 257.00 187.60 Stagecoach. . . . . . . . . . . . . . . . .183.80 +1.30 204.90 137.00
Barclays . . . . . . . . . . . . . . . . . . .292.00 –2.75 394.25 253.40 Foreign & Col Inv Tst. . . . . . . . . .296.00 +3.90 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .545.50 +7.00 546.00 304.70 Standard Chartered . . . . . . . . . .1876.00 –32.50 1946.00 1366.50
Barratt Development . . . . . . . . . . .89.90 –0.90 172.50 89.10 Fresnillo . . . . . . . . . . . . . . . . . .1282.00 +41.00 1333.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .332.50 +4.60 333.80 265.00 Standard Life . . . . . . . . . . . . . . .236.10* +5.10 237.00 170.00
BBA Aviation . . . . . . . . . . . . . . .191.40* — 220.00 145.90 G4S . . . . . . . . . . . . . . . . . . . . . .263.10* +6.50 285.70 228.40 Morrison Wm . . . . . . . . . . . . . . .295.90* –1.00 307.10 255.00 SuperGrp . . . . . . . . . . . . . . . . . 1129.00 +11.00 1312.00 499.00
Bellway. . . . . . . . . . . . . . . . . . . .581.00 +1.50 842.50 510.00 Genesis Emerging Mkts Fd . . . . .532.00 +11.00 532.00 370.00 Murray Intl Tst . . . . . . . . . . . . . . .924.50 +10.50 930.00 720.00 TalkTalk . . . . . . . . . . . . . . . . . . .140.00 +1.90 153.80 106.60
Berkeley . . . . . . . . . . . . . . . . . . .833.50 +8.00 949.50 735.00 GKN . . . . . . . . . . . . . . . . . . . . . .180.50 +3.60 181.70 100.40 National Express. . . . . . . . . . . . .235.00 +1.30 258.60 155.86 Talvivaara Mining . . . . . . . . . . . .529.50 +5.50 547.50 341.40
BG . . . . . . . . . . . . . . . . . . . . . . 1171.50 +27.50 1248.00 966.90 GlaxoSmithKline . . . . . . . . . . . .1318.50 +12.50 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .578.00 +5.50 607.65 474.80
BHP Billiton . . . . . . . . . . . . . . .2216.00 +88.50 2346.00 1618.50 Great Portland Estates . . . . . . . .352.00 –0.30 368.60 236.60 Next . . . . . . . . . . . . . . . . . . . . .2256.00 +37.00 2360.00 1733.00 Tate & Lyle . . . . . . . . . . . . . . . . .495.40 +6.30 509.00 388.00
BlackRock Mining . . . . . . . . . . . .685.00 +26.00 687.00 475.00 Greene King . . . . . . . . . . . . . . . .418.00 –3.60 484.00 372.50 Northumbrian Water . . . . . . . . . .339.60 +2.70 353.00 225.20 Taylor Wimpey . . . . . . . . . . . . . . .26.56 +0.38 46.34 24.29
BlueBay . . . . . . . . . . . . . . . . . . .364.40 +11.90 393.00 251.00 Halfords . . . . . . . . . . . . . . . . . . .419.10 +19.10 562.50 370.10 Ocado Grp . . . . . . . . . . . . . . . . .127.00 –1.40 169.00 126.60 Telecity . . . . . . . . . . . . . . . . . . . .501.50 +1.50 546.00 323.50
Bluecrest Allblue GBP . . . . . . . . .171.00 +1.30 171.00 150.10 Halma . . . . . . . . . . . . . . . . . . . . .343.00 +10.70 345.50 218.40 Old Mutual . . . . . . . . . . . . . . . . .145.10 +2.80 146.20 95.30 Templeton Emrg Mkts . . . . . . . . .655.50 +15.00 655.50 455.00
Booker . . . . . . . . . . . . . . . . . . . . .49.74 –0.05 51.60 37.50 Hammerson . . . . . . . . . . . . . . . .423.80 +8.60 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .284.00 –1.20 339.70 205.80 Tesco . . . . . . . . . . . . . . . . . . . . .433.90 –3.20 454.90 368.40
BP . . . . . . . . . . . . . . . . . . . . . . .436.95 +7.80 658.20 296.00 Hargreaves Lansdown . . . . . . . .449.70 –0.30 478.00 259.40 Pearson . . . . . . . . . . . . . . . . . .1009.00 +4.00 1069.00 790.00 Thomas Cook . . . . . . . . . . . . . . .190.40 +0.30 277.20 167.50
Brit Insurance . . . . . . . . . . . . . .1028.00 +3.00 1045.00 709.00 Hays . . . . . . . . . . . . . . . . . . . . . .123.40 +2.20 125.30 82.50 Pennon . . . . . . . . . . . . . . . . . . . .600.00 +0.50 616.50 440.40 Travis Perkins . . . . . . . . . . . . . . .875.50 +30.50 915.00 647.50
British Airways . . . . . . . . . . . . . .275.00 +4.20 280.00 172.40 Henderson . . . . . . . . . . . . . . . . .133.90 +3.30 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .381.70 +12.30 520.00 335.90 TUI Travel . . . . . . . . . . . . . . . . . .223.70 –0.50 313.90 189.20
British Amer. Tob . . . . . . . . . . .2434.00 +23.00 2446.50 1832.00 Heritage Oil. . . . . . . . . . . . . . . . .351.00 +5.70 585.00 295.90 Petrofac . . . . . . . . . . . . . . . . . .1474.00* +60.00 1492.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .417.20 +7.10 436.20 261.20
British Empire Tst . . . . . . . . . . . .486.60 +2.60 487.50 338.50 Hikma Pharma . . . . . . . . . . . . . .732.00* +11.50 813.00 452.20 Petropavlovsk . . . . . . . . . . . . . .1034.00* +35.00 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1290.00* +5.00 1375.00 979.50
British Land . . . . . . . . . . . . . . . .502.50* +10.90 515.00 416.00 Hiscox . . . . . . . . . . . . . . . . . . . .346.70 –0.60 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .670.00* +4.00 775.00 550.50 UK Commercial Prop. . . . . . . . . . .77.30 –0.50 84.90 71.00
Britvic. . . . . . . . . . . . . . . . . . . . .464.50 +5.20 518.00 341.50 Hochschild Mining . . . . . . . . . . .487.80 +14.70 497.80 220.00 Premier Farnell . . . . . . . . . . . . . .280.00* — 283.80 140.60 Ultra Electronics . . . . . . . . . . . .1807.00 +43.00 1814.00 1198.00
Brown(N.) . . . . . . . . . . . . . . . . . .272.00 +19.00 284.30 204.80 Home Retail . . . . . . . . . . . . . . . .219.20 +4.20 326.30 201.70 Premier Oil . . . . . . . . . . . . . . . .1672.00 +8.00 1717.00 984.00
BSkyB . . . . . . . . . . . . . . . . . . . .706.00 — 732.00 521.00 Homeserve . . . . . . . . . . . . . . . . .480.00 +15.00 502.00 422.00 Provident Financial . . . . . . . . . . .819.00 +1.00 986.00 795.00 Unilever . . . . . . . . . . . . . . . . . .1814.00 +16.00 2024.00 1662.00
BT . . . . . . . . . . . . . . . . . . . . . . .143.50 +0.60 153.00 108.40 HSBC Hldgs . . . . . . . . . . . . . . . .671.10 +7.90 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .623.00 +4.50 665.00 475.70 United Utilities . . . . . . . . . . . . . .588.00 +1.50 620.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .776.50 +9.50 784.50 614.00 Hunting . . . . . . . . . . . . . . . . . . .634.50 +6.00 661.00 429.10 PZ Cussons . . . . . . . . . . . . . . . .375.00 –3.00 383.00 231.70 Utd Business Media . . . . . . . . . .620.50* +6.50 656.50 408.30
Burberry . . . . . . . . . . . . . . . . . .1008.00 –31.00 1065.00 513.00 ICAP . . . . . . . . . . . . . . . . . . . . . .478.90 +21.30 480.20 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . . 110.00 +1.00 179.10 103.50 Vedanta Resources . . . . . . . . . .2347.00 +131.00 2967.00 1795.00
Cable & Wire Comms . . . . . . . . . .54.95 –0.30 150.00 53.00 IG . . . . . . . . . . . . . . . . . . . . . . . .547.50* +1.50 549.00 291.00 Randgold Resources. . . . . . . . .6540.00 +105.00 6755.00 3930.00 Victrex . . . . . . . . . . . . . . . . . . .1322.00 +22.00 1350.00 726.50
Cable & Wire Wwide . . . . . . . . . . .73.95 +0.30 94.80 60.05 Imagination Tech Gp . . . . . . . . . .429.00 +17.00 429.00 190.50 Reckitt Benckiser . . . . . . . . . . .3462.00 +26.00 3667.00 2971.00 Vodafone . . . . . . . . . . . . . . . . . .163.90 +1.80 165.55 126.50
Cairn Energy. . . . . . . . . . . . . . . .440.80 +11.50 497.60 306.80 IMI . . . . . . . . . . . . . . . . . . . . . . .835.00* +24.50 836.50 410.00 Reed Elsevier . . . . . . . . . . . . . . .563.00 +13.50 566.00 454.60 Weir . . . . . . . . . . . . . . . . . . . . .1589.00* +26.00 1614.00 639.00
Caledonia Invs . . . . . . . . . . . . .1749.00 +59.00 1759.00 1496.00 Imperial Tobacco. . . . . . . . . . . .1948.00 +30.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .86.00 +1.00 125.50 64.05 Wellstream Hldgs . . . . . . . . . . . .759.00* +4.00 810.00 429.70
Capita . . . . . . . . . . . . . . . . . . . . .794.00* +7.00 829.50 693.00 Inchcape. . . . . . . . . . . . . . . . . . .337.00 +7.70 347.00 235.00 Renishaw . . . . . . . . . . . . . . . . . 1122.00* +38.00 1133.00 479.00 Whitbread . . . . . . . . . . . . . . . . .1679.00 +5.00 1697.00 1215.00
Capital & Counties . . . . . . . . . . .143.00* +2.30 143.00 99.60 Informa . . . . . . . . . . . . . . . . . . . .430.00 +7.00 439.40 263.30 Rentokil Initial . . . . . . . . . . . . . . .100.70 –0.10 140.20 91.15 William Hill . . . . . . . . . . . . . . . . .165.90 –1.00 217.80 160.50
Capital Shopping Centres . . . . . .392.10* +7.10 533.50 300.10 Inmarsat . . . . . . . . . . . . . . . . . . .636.00* +1.50 831.00 528.50 Resolution . . . . . . . . . . . . . . . . .251.90 +3.70 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .482.50 +8.70 487.00 396.30
Carillion . . . . . . . . . . . . . . . . . . .338.00* +8.30 361.90 272.00 Intercontl Hotels . . . . . . . . . . . . 1163.00 +5.00 1244.00 762.50 Rexam . . . . . . . . . . . . . . . . . . . .322.90 +2.40 348.80 271.40
Carnival . . . . . . . . . . . . . . . . . .2616.00 +11.00 2937.00 1876.00 Intermediate Capital . . . . . . . . . .327.40 +11.70 327.50 233.50 Rightmove . . . . . . . . . . . . . . . . .765.00 +5.00 796.50 456.90 Wolseley . . . . . . . . . . . . . . . . . .1630.00 +73.00 1742.00 1155.00
Catlin . . . . . . . . . . . . . . . . . . . . .336.60 +4.40 394.60 303.20 Intertek . . . . . . . . . . . . . . . . . . .1872.00 +16.00 1881.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .4038.00 +176.00 4104.00 2631.00 Wood Group (John). . . . . . . . . . .445.10 +4.50 452.90 279.60
Centamin Egypt . . . . . . . . . . . . .182.90 +11.10 194.40 103.50 Intl Personal Fin . . . . . . . . . . . . .298.00 +8.70 310.00 181.40 RIT Capital Partners . . . . . . . . . 1152.00 +5.00 1215.00 940.00 WPP . . . . . . . . . . . . . . . . . . . . . .713.00* +8.00 744.00 528.00
Centrica . . . . . . . . . . . . . . . . . . .329.00* –1.00 347.00 236.30 Intl Power . . . . . . . . . . . . . . . . . .405.00* +3.00 407.70 248.20 Rolls Royce . . . . . . . . . . . . . . . .627.50 +21.00 631.50 434.50 Xstrata . . . . . . . . . . . . . . . . . . .1300.00 +55.00 1344.50 832.50
Charter Intl . . . . . . . . . . . . . . . . .778.50 +28.50 855.50 563.50 Invensys . . . . . . . . . . . . . . . . . . . 311.70 +5.80 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1895.00 +57.00 1906.00 1101.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .3052.00 +44.00 3711.00 2551.00 Investec . . . . . . . . . . . . . . . . . . .518.50 +10.00 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .47.53 –0.07 58.95 28.25
Close Bros . . . . . . . . . . . . . . . . .758.00* +4.50 803.50 657.00 ITV . . . . . . . . . . . . . . . . . . . . . . . .63.60 –0.10 71.75 41.04 Royal Dutch Shell A . . . . . . . . .1996.00 +37.00 2068.50 1621.00 * Ex-Dividend † Suspended
Cobham . . . . . . . . . . . . . . . . . . .235.40 +4.90 278.60 205.50 Jardine Lloyd Thompson. . . . . . .575.00 +9.00 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1941.00 +28.00 1997.50 1550.00
COLT Group . . . . . . . . . . . . . . . .120.90 +1.90 144.20 107.70 Johnson Matthey . . . . . . . . . . .1842.00 +28.00 1854.00 1387.00 RSA Insurance . . . . . . . . . . . . . .135.90* +2.70 142.00 114.10 www.interactivedata.com

Miners and hopes of more easing in Wall St rises on strong

US push London to a five month high earnings and weak dollar
Miners led the charge, with beating expectations, and reiterated barrier and triggered more buying of

THELONDON Vedanta Resources and Anglo

American up 5.9 per cent and 5.4 per
it is on track to meet full-year targets.
Announcements from China also THENEW YORK stocks as money managers chased
performance. The S&P 500 is up 12.3

REPORT
cent respectively, as the weak dollar
encouraged demand for dollar-
denominated commodities, with cop-
per at a 27-month high.
helped, with the government in
Beijing saying it will promote sales of
construction material in rural areas,
and as the world’s fastest-growing
REPORT per cent since 1 September.
“There’s three months left in the
year and a lot of fund managers are
watching the clock,” said Richard

S U
trong miners helped drive “We’re mainly being charged high- economy reported soaring crude S stock indexes hit their highest Ross, global technical strategist at
Britain’s top share index to a er by the miners. It's all about the fact imports. in five months yesterday as Auerbach Grayson in New York.
more than five-month closing traders are now pricing in extra stim- Gas exploration company BG stronger-than-expected earn- Industrials and materials were the
high yesterday, boosted by ulus from the Fed after the FOMC Group led integrated oil stocks high- ings and lingering US dollar S&P 500’s leading sectors. Caterpillar
firmer metals prices and hopes for [minutes] last night, so we’re expect- er, up 2.4 per cent, on talk of a possi- weakness increased demand for equi- rose 1.2 per cent to $80.29 and
fresh economic stimulus in the ing it to happen early next month,” ble bid from China’s CNOOC, traders ties. Freeport-McMoRan Copper & Gold
United States. Joshua Raymond, market strategist at said. Shares in industrials and materials jumped 4.2 per cent to $99.08.
The FTSE 100 index ended up 85.76 City Index, said. And oil services firms AMEC and led the way while commodity prices The Dow Jones industrial average
points, or 1.5 per cent, at 5,747.35, its Mexican precious metals miner Petrofac added 3.6 and 4.2 per cent soared as China’s month-on-month gained 75.68 points to 11,096.08. The
highest closing level since April 26, Fresnillo added 3.3 per cent after it respectively after Washington lifted import growth hit a record high. Standard & Poor’s 500 added 8.33
and its biggest one-day percentage said its silver and gold production its ban on deepwater drilling seven Completing a bullish trifecta, the points to 1,178.1. Nasdaq rose 23.31
rise since 20 September. rose to a record in the third quarter, weeks ahead of schedule. S&P 500 broke a short-term technical points, or 0.96 per cent, to 2,441.23.
 22 Investment | Listed Products
Look under the
bonnet before
buying the car
Investors should examine the underlying
index of their ETF, writes Juliet Samuel
W
ITH so many exchange-traded
funds (ETF) on offer, it’s hard to
know what difference it makes
which one you choose. But one
way to narrow it down is to examine the
underlying benchmark the fund is track-
ing. In fact, it makes very little sense to
choose an ETF without at least glancing
over the structure of the benchmark it
uses: alongside the fee structure, track-
ing error and counterparty risk, the qual-
ity of the index should be top of the list
for scrutiny.
This is all the more important when it
comes to investing in an emerging mar-
kets ETF, where there can be greater varia-
tion in the construction of the indices
because of the huge variation in the struc-
ture of the underlying markets they are
trying to capture. That is why this week’s
page provides a breakdown of several
The FTSE RAFI Emerging Index is weighted
according to four fundamentals: dividends, cash
flow, sales and book value. According to FTSE,
fundamental-weighted indices do not increase
exposure to stocks with high price-to-earnings
(p/e) ratios during episodes of unsustainable p/e
expansion and therefore avoid over-exposure to
the more overvalued stocks.
This has translated into better performance
than the FTSE Emerging All Cap Index: over the
past three years, the RAFI index has fallen 8.7
per cent compared to a 21.6 per cent drop for
the cap-weighted index. It has 362 constituents
with a net market cap of $30.9m.
The biggest weighting is South Korea, fol-
lowed by China, Taiwan and Brazil. In the cap-
weighted index, Brazil is the largest weighting
followed by China.
The index’s constituents are reviewed annual-
ly in March.
Europe’s largest
ETF Securities gold
– World’s exchange
largest
Exchangecommodities
traded Traded Currency platform
• ETFS Physical Gold (PHAU) – AUM $5.2bn*
• ETFS Gold Bullion Securities (GBS) – AUM $5bn*
*AUM figures as at 29th June 2010
major emerging market (EM) benchmarks.
One of the major determinants of a
benchmark’s structure is what kind of
weighting it uses. The norm (two of the
four examples displayed) is that the
benchmark is weighted purely by market
capitalisation (subject to certain require-
ments), but this skews the index heavily
in favour of countries with highly liquid
and developed equity markets and away
from those that actually account for a
larger proportion of EM wealth but have
more restricted or limited stock offer-
ings. Fundamentals weighting is another
method, explained in the box below
(FTSE RAFI emerging index).
Other factors to take into account
include whether or not the index has a
minimum market cap size requirement
and what kind of liquidity rules are
applied. These can vary significantly,
ANALYSIS l FTSE RAFI Emerging Markets Index
11..49%
10.29 %
6.37%
% %
21.21%
6.25%
5.17%
4.26%
26.66%
Others
Korea Taiwan Russia Mexico
China Brazil South Africa India
CITYA.M. 14 OCTOBER 2010
with some index-providers, such as MSCI, year – as well as the frequency of trades
monitoring a firm’s liquidity both in the in order to decide whether to include it
short- (one month) and long-term (one in an index.
year). MSCI’s analysts look at a compa- Whatever your choice, it makes sense to
ny’s trade value ratio – how much of its check out the engine before loading any
stock is traded during the course of a valuable possessions into the car.
The Standard & Poor’s Emerging Markets ANALYSIS l S&P Emerging Markets Index
Plus BMI is a market cap-weighted index and
is float-adjusted so it only includes those shares
publicly available to investors. The index is 3.96%
annually reconstituted in September and this 17.43%
year Israel was promoted to developed status
6.15 %
effective from 20 September.
Unsurprisingly for a cap-weighted emerging 6.81%
market index, the biggest weighting is China,
followed by Brazil, South Korea and Taiwan. 14.66%
There are 503 constituents with an average 9.42%
market cap of $29.4bn.
In terms of sector weighting, a fifth of the
index is held in financials followed by 16.9 per 14.14%
11.97%
cent in energy. For those investors looking to
get exposure to the spending power of the
Others
growing middle class in emerging markets, they
should note that only 14 per cent of holdings of China South Korea India Russia
the S&P Emerging Markets index are in con- Brazil Taiwan South Africa Mexico
sumer stocks.
• Brought by the management team who invented Gold ETFs/ETCs
•
•
100% LBMA ‘Good Delivery’1 investment grade bars
Traded and settled as a share through your stock broker or bank2
•
•
Open ended and can be created and redeemed to demand
Multiple market makers and traded in USD, EUR and GBP on
all major Exchanges
• Physical delivery available
• Part of the ‘Exchange Traded Gold’ stable a World Gold Council initiative
For more information T: +44 (0) 20 7448 4330
www.etfsecurities.com
The advertisement is issued by ETF Securities Marketing LLP (“ETFSM”) and is intended for and directed towards
persons who are considered professional investors (as defined in the UK Financial Services and Markets Act or its
equivalent under applicable law or regulation in the relevant jurisdiction) and have professional experience in investing.
It has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 (“the Act”)
by Flow Traders B.V.PHAU is issued by ETFS Metals Securities Ltd (MSL). GBS is issued by Gold Bullion Securities
Ltd (GBS). MSL and GBS are each regulated by the Jersey Financial Services Commission. The United Kingdom
Listing Authority (UKLA) is the ‘home regulator’ for purposes of listing and passporting the prospectus under the
Prospectus Directive.
The products in this advertisement may or may not be suitable for a particular investor.
You should obtain your own independent financial, taxation and legal advice before making
any decisions about any investment. Investment in the products discussed carry with it
certain risks, including those set out in the relevant prospectus, which can be obtained from
the ETFSM at +44 (0)20 7448 4330 or info@etfsecurities.com. All codes listed above are
for the London Stock Exchange.
1 ‘Good Delivery’ as defined by the LBMA in relation to the standard of gold bars.
Please see prospectus for more information.
2 Brokerage fees may apply.
CITYA.M. 14 OCTOBER 2010 Investment | Listed Products 23

Instead of using market cap, the MSCI GDP- ANALYSIS l MSCI Emerging Markets GDP-weighted
weighted Emerging Market Index is made up
of national indices (which are weighted by mar-
ket cap) in proportion to the size of the country’s
total GDP versus that of other emerging markets. Others Russia
2.04%
Thus, China accounts for nearly a third of the 2.48%
index, while the “others” category (those China Korea 3.15% 32.29%

%
accounting for less than 2 per cent) has South 3.93%
Brazil Mexico
Africa, Hungary, Egypt, Chile and Peru. China’s
share is much larger than in other indices since 4.54%
India Turkey
most weight by free-floating market cap. Despite
5.30%
accounting for such a large share of emerging Poland Indonesa
market wealth, China’s market is still restricted
Taiwan Thailand 5.88% 11.37%
with rules about foreign ownership of shares and
7.68%
many firms held by insiders. The index fell 67 per
cent from its October 2007 peak to its crisis lows 9.10%
but has since recovered to 80 per cent of its peak.

A spike in the German Dax Picture: GETTY

THE TIPSTER
GERMAN DAX
Check out the goods
before going for a ROCKETS TO
ride
Picture: ALAMY RECORD HIGH

T
HE German Dax 30 index finally broke
ANALYSIS l MSCI Emerging Markets out of its six-month trading range,
blasting through the previous high of
6,385 and the 6,400 level to a high of
2.41% 6,439.3. The area between 6,385 and 6,400
18.13% should act as support on pullbacks, so look
2.90%
to buy around these levels with a view to
4.20% taking profits at the 6,600 level. Spread Co

%
5.96% offers a spread on the Germany 30 market
16.45% of 6,438-6,439.
Word of Standard Chartered’s rights
7.49%
issue certainly rocked the banking sector
and the speculation seems to be that more
8.18% 13.37% will follow the cash call route. Against a
backdrop of QE the timing could be worse
10.63% but just how the market's appetite for this
will stack up remains to be seen. Banking
Others Korea South Africa Malaysia
stocks recovered a little from Wednesday's
rocky start but continue to significantly
China Taiwan Russia Indonesia underperform the market. The current IG
Brazil India Mexico Index price on the banking sector index is
5,034-5,044.
Oil and gas exploration firm Heritage Oil
The MSCI Emerging Market Index has had a good run of late, after falling out
aims to capture 85 per cent of the free- of favour due to problems over tax issues in
floating market cap listed in the coun- Uganda. Heritage has a large oil find in
tries included, excluding the smallest Kurdistan so this stock could well be a play
firms that make up the remaining 15 per when an Iraqi government is formed. It is
cent. certainly one to keep an eye on. Spreadex
It has high liquidity requirements and offers a December price of 351.1p-354.6p.
a minimum size requirement for firms’ A reported massive buy order in Aussie
inclusion. The latter tool aims to avoid dollar-Swissie yesterday afternoon kicked off
the problem of size disparity, whereby a a chain reaction in a number of crosses, send-
country could be over-represented ing dollar-Swissie and euro-Swissie skyward
because its firms’ top 85 per cent of for a change. It also gave a lift to Aussie dol-
market cap volumes are generally small- lar-US dollar, taking it back to $0.9900, just
er than those of another state. below the strong resistance at $0.9905. If it
Its largest sector weighting is fails to break through, we may be looking at a
towards financials (25.8 per cent), fol- triple top and a pullback to the seven-day
lowed by materials (14.4 per cent), ener- moving average at around SFr0.98000, or
gy (14.1 per cent), IT (12.4 per cent) and even the 15-day exponential moving average
telecoms (8 per cent) and industrials (7.2 at $0.9700. Spread Co offers a spread of
per cent). $0.9890-$0.9892. Jessica Mead

LISTED PRODUCT NEWS

JESSICA MEAD
ETF Securities will be launching an aluminium ETC
ETFS CONFIRMS INDUSTRIAL METAL ETCS
ETF Securities confirmed on Monday that it
is preparing to launch a range of physically-
backed industrial metal exchange-traded
commodities (ETC), subject to approval from
regulators and the London Stock Exchange.
The industrial metal range of ETCs will include
physical aluminium, copper, lead, nickel, tin
and zinc, as well as a basket consisting of all
six metals. The industrial metal backing each
product will be stored in LME-approved ware-
houses. ETF Securities added that Deutsche
Bank’s London branch will provide trading,
Picture: REUTERS administrative and custody services.
SOURCE LISTS SMALL CAP EUROPE ETF
European ETF provider Source has this week
launched its MSCI EMU small cap ETF, which
offers exposure to 568 stocks with a market
capitalisation ranging from €3.5bn to €32m.
The ETF tracks the MSCI EMU Small Cap
Total Return (Net) index and gives investors
more opportunities in the small-cap end of
the Eurozone market. The euro-denominated
fund continually reinvests dividends and it
has a management fee of 0.4 per cent per
annum. This latest listing means that Source
now offers a total of 80 exchange-traded
products.
SECOND ANNUAL SIPPEX CONFERENCE
RBS and execution-only broker Selftrade will
be jointly hosting the second annual SIPPex
conference, which takes place today at RBS’s
headquarters on Bishopsgate. The experts at
the conference, which include Francis Moore,
managing director of European Pensions
Management, will once again share their
knowledge and expertise on setting up,
investing in and managing Self Invested
Personal Pensions (SIPPs). The event will run
from 6pm-8pm and will be held at 250
Bishopsgate. To register for free for this
event visit: www.rbs.co.uk/markets
 Careers
24 CITYA.M. 14 OCTOBER 2010

| MBAs

A good quality MBA

should be all about
broadening horizons
Focused MBAs are knowledge. They have proved popular with
people who have clear career goals, but for
Which way do
you want to go?
increasingly popular, some their narrowness goes against the
spirit of the MBA. Picture: GETTY
but think carefully Jonathan De Grande runs the financial
services (FS) MBA at Vlerick, a Belgian busi-
before taking one. ness school, and says that such accusations
are unfounded. “It has more or less the
By Jeremy Hazlehurst same curriculum as a general MBA, but
with a financial services slant,” he says.
agement role. Our aim is to make them
into excellent managers.”
Lovells which uses modules drawn from
the MBA. These courses help lawyers
Projects and case studies will be taken Similarly, Warwick runs a Global Energy understand the financial services clients
RADITIONALLY, an MBA has been a from the financial services so that rather MBA which is aimed at people from a mas- that they work with.

T generalist qualification which

teaches fresh skills and opens up
avenues. But a new breed of focused
MBAs has emerged in recent years. These
concentrate on a specific area such as the
energy industry, defence, financial servic-
es, the BRIC countries or even corporate
and social responsibility (see box). They are
aimed at those who have a firm idea where
they are going and want to deepen their
than studying a retailer, say, you would
look at a simulation of an insurance com-
pany, a bank or portfolio manager.
The reason the FS MBA works, he says, is
the sheer breadth and complexity of the
financial services. “People who come on to
our programme are working in a specific
area but they don’t have an overall picture
of how the company works,” he says.
“Perhaps they recently moved into a man-
sive range of businesses, from power sta-
tion managers to private equity
professionals who raise capital for infra-
structure projects. Other focused MBAs are
aimed at sectors where business knowl-
edge can add value. BPP runs an MBA with
City law firm Simmons & Simmons, in
which trainees are given an intensive
introduction to business. Cass runs a simi-
lar course for lawyers from Hogan &
Not everybody is a fan of focused MBAs.
Colin Carnall, director of executive educa-
tion at Cass, says that the whole point of
an MBA is to provide breadth. You should
think of your skills as being like a T, he
says. “The vertical line is deep knowledge
of one particular thing, while the cross-bar
at the top is a broad understanding of
management tools and frameworks – and
that is what an MBA is meant to provide.”

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CITYA.M. 14 OCTOBER 2010
An MBA is no substitute for experience,
and people who think that taking an MBA
early in their career will open doors may
be disappointed. Nobody should do one
before they have proper management
experience, says Carnall, meaning that
“one, you’ve been responsible for the bot-
tom line, and two, you have had to make
bad news stick.” A focused MBA does not
provide a short-cut.
Graham Clark from Cranfield School of
Management, which runs both a general
MBA and a defence one for MoD employees
who work with civilian businesses such as
contractors, is also sceptical about most
focused MBAs. “It is a bit populist and
flavour-of-the-month. We need to be aware
of corporate social responsibility, energy
issues, and the BRICs. But an MBA that
works for a specific career path might not
work in the future.” Rather than opening
doors, he thinks, a specialist MBA could be
a dead-end.
The whole point of a general MBA is that
MANI YANIKA
WARWICK GLOBAL ENERGY MBA AND
PORTFOLIO MANAGER FOR RWE NPOWER
HAVING graduated from Bath Business
School with an MSc in International
Management, Mani Yanika worked as an
energy analyst at Bloomberg before join-
ing Ernst & Young and then JP Morgan. He
chose the Global Energy MBA because “I
have been involved in the energy market
DOS AND DON’TS | WHY DO A FOCUSED MBA?
● Good reasons
● You have gone past the age when most peo-
ple do an MBA – you are in your mid-30s
onwards – and have a deep knowledge of your
particular area, but want a more general under-
standing of the rest of your industry.
● You are in an industry where management is
not a core skill – law, journalism, or medicine for
example – but you have recently moved into a
management role, or want to move into one, and
are looking for the MBA to give you specific
management skills.
● You are thinking of doing an MBA anyway,
and would whether you get on the focused
course or not.
● The school also offers a general management
MBA, and you will have a chance to mingle with
those people. This should mean that there is no
chance of the focus being too narrow.
it should be bang up-to-date. Clark says
that compared to five years ago the
Cranfield MBA is more focused on person-
al development, teaching people to be self-
aware and to change their bad
management habits. It also takes a more
holistic approach, joining the dots
between disciplines. A good general MBA
should cover everything that a focused one
does. “If we lose sight of the essence of the
MBA then the whole product is devalued,”
he says. “It is about having people who are
People need to be aware of energy issues and
BRIC prospects, but this should all be a part
of a really good, top-quality generalist MBA
able to operate as effective leaders in any
organisation – whether that is commer-
cial, public sector, armed forces, or not for
profit.”
for many years and wanted to be recog-
nised as an expert in this field. The UK
energy industry has evolved tremendously
over the past few years; the UK generation
mix is moving away from the traditional
sources of energy to new resources.”
The sector is also increasingly interna-
tional. “In order to solve global energy
issues, companies and regulators need
bright energy professionals equipped with
intangible skills who understand the ener-
gy industry,” he says.
His cohort included energy profession-
als from across the world who worked in
“trading, the financial sector, engineer-
ing, government and consulting to name
a few.” Now he wants to move into oil
derivatives sales. “The knowledge and
experience gained in the course will give
me an immediate edge,” he says.
● Bad reasons
● You want to go and work in a country, so
you do an MBA focused on that country. Just
go and do one there instead.
● You couldn’t get on to a general manage-
ment MBA. Consider going back and doing
your GMAT again.
● You have a specific job in mind and you
think that the focused MBA will help you get
it. Remember that the world is changing
quickly and that the job you want might not
exist in 10 years. An MBA is meant to broad-
en your horizons, not narrow your opportuni-
ties.
● You are at the start of your career and
want to boost your CV. Think about doing a
masters in your chosen area instead – an
MBA should wait until you have more experi-
ence.
WIN A PART-TIME MBA 25
WORTH £16,000
WITH WESTMINSTER
BUSINESS SCHOOL, SEE P20
while developing general management
skills “to give me more options within the
group”. The modular structure also meant
she could continue working while doing
the MBA.
“I did not find it narrow in focus. The
programme was set up as a full MBA, cov-
ering all relevant subject matters, not just
the ones specifically dealing with the
ELS DE KEYSER financial sector.”
As well as Ghent, where Vlerick is based,
HEAD OF CENTRALISED CLAIMS
MANAGEMENT AT KBC INSURANCE she traveled to Sankt-Gallen, Montréal,
London, New York and even as far as
Beijing. “I will never forget the Chinese
E
LS de Keyser had just moved to KBC’s insurance company manager who present-
non-life insurance section, where she ed his business to us in an almost military
supervised five departments han- style, in Chinese.”
dling large and complex claims, As for networking, “we had good con-
when the financial crisis struck. tact with the alumni of previous editions
She decided it was a perfect opportunity of the MBA FSI, who were invited to some
to take the financial services MBA at parts of the program and who organised
Vlerick (MBA FSI). “I wanted specifically to some of the company visits.”
understand what was happening, prefer- And the next step? “It is too early to tell
ably in a multidisciplinary setting, and to whether it has helped my career, since I
enhance my options with my employer, a just graduated, but I believe that whatever
bancassurance group with home markets my next step will be, this MBA definitely
in Belgium and Central Europe.” will help me, either by increasing my
Previously, she had been familiar with options with my current employer or by
asset management and wanted to add spe- having developed the skills necessary to
cific banking and insurance knowledge, set up my own business.”
WHAT’S OUT THERE | FOCUSED MBAS
MBAs targeted specifically at those in the South Korea.
financial services are available from Vlerick in Alternatively, Shidler College of Business at
Belgium, and the Universities of East London, the University of Hawaii has an MBA aimed at
Greenwich and Coventry. Japan. UoH also runs a 15-month, intensive
At Warwick you can do an MBA that specialis- China-focused MBA with the Japan-America
es in the energy industry. Cranford has an Institute of Management Science.
MBA targeted to those in defence – mainly Nottingham University Business School runs an
from the armed forces and the MoD. MBA specifically focused on Corporate and
BPP runs an MBA that is targeted at those in Social Responsibility. The course used to be
the law, with City law firm Simmons and
Simmons. Cass runs a course with Hogan
sponsored by British American Tobacco.
There is an MBA in Non-Profit Management at
Lovells that makes use of some of the MBA the Heller School for Social Policy and
modules. Management at Brandeis University in
Those interested in working in the BRICs Massachusetts. It focuses on global develop-
might look up an MBA aimed at those coun- ment and aims to produce “socially responsible
tries at the Chung-Ang Business School in leaders”.
Serious
MBA?
about an
Choose Wisely.
Did you
you know thatthat not all MBAs offer
offer the same quality? Invest
Invest yyour
our time and
money
money wisely.
wisely. Choose a course
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 26 City Focus | Careers
The right MBA can be career Viagra
Some are sceptical about the value of those
three little letters, and you have to choose
right to make it work. By Jeremy Hazlehurst
A
RECENT report from the Institute
of Leadership & Management
found that many HR professionals
were ambivalent about the value
of an MBA when recruiting people to lead-
ership positions. When asked how impor-
tant an MBA was in recruiting senior
management, 68 per cent replied “not at
all”, or only “slightly”. Some felt that while
MBAs are strong on theory, they often did
not deliver. A number said that seeing
somebody had an MBA “created unrealistic
expectations of ability” and others worried
that its value was diluted if taken at the
wrong stage of a career.
So is an MBA a waste of time? Not at all,
according to Kathleen Fitzgerald, a direc-
tor on the Executive MBA Program for
Chicago Booth, which topped the
Economist’s 2010 MBA rankings. “In 10
years that I have been involved with MBAs,
I have never known anybody say they
regretted it,” she says.
The key to making an MBA work for you
is to choose the right one, and for the right
VISION
STRATEGY
OPPORTUNITY
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WESTMINSTER.AC.UK/WBS
reasons. Some just want the earnings
boost (see chart). But that might not work
for all career paths. For example, lots of top
private equity people have an MBA but
that’s not so true in banking, where learn-
ing on the job and getting deals under
your belt can be more valuable.
To make your MBA count, you need to
do your research, and that’s not just work-
ing out whether it will help in the sectors
that you are interested in. The first step is
deciding which sort of MBA suits you.
On a full-time MBA, Fitzgerald says, the
main thing you will get is education, tools
and a framework to make you a better
manager. But, she warns: “If you are
mediocre and think that it will make you a
superstar, that’s not going to happen. It’s
not career Viagra. You still have to put in
the hard work. It’s like learning a language
– until you start using it you don’t get it.”
Echoing the recruiters in the report, who
said that MBAs sometimes have too high
an opinion of themselves, she says that you
still have to manage your expectations
We have lift-off even when you have finished a full-time
MBA – and keep working hard.
Picture: GETTY Then there is the executive MBA.
Those who benefit most from this are
older people who are focused on one
function and want to gain a broader
understanding of business. “They have
a good idea what their peers are doing
but they are not speaking the same lan-
guage. It is a chance to re-tool and learn
about other areas.” With an executive
MBA, the network is vital. “You are in
school with people who have actually
done things and have connections.”
Finally, there is the part-time MBA.
There are two reasons that people do
this: one, to get a good track record so
that they will find it easier to get on to
a full-time MBA; and two, because they
don’t have the luxury of taking time
off. “A part-time MBA is a good way to
get a better job in what you are doing,
but it’s harder to career-change.”
Daniel Callahan is better placed than
most to work out how to make the most
of an MBA. He did the full-time MBA at
IESE in Barcelona in 2007 and has since
set up a business called MBA &
Company, which helps to fit MBAs to
businesses, and also to help people
select the right MBA for them.
He says that the MBA helped him to
change career – a politics and French
graduate who had worked in media
strategy, he learned about venture capi-
tal funding, marketing, and how to
write a business plan. He says 40 per
cent of his cohort were planning to
change jobs.
He thinks that the timing is one of
ANALYSIS l Financial benefits of an MBA
200,000
$ Average graduate
salary post MBA (LHS)
150,000
100,000
50,000
0 0
IESE Harvard Wharton
FOUR WAYS TO MAKE YOUR MBA COUNT
1. Go at the right time. Most agree that the best
time is your late 20s or early 30s, when you
have some management experience. If you are
young, a masters in management might be bet-
ter.
2. Be sure what it will do for you. Many MBAs
plan a radical career change. For some careers
– such as consultancy – an MBA will help. But if
you are a trader, for example, or a banker then
it might not do a lot for you. Which is not to say
you shouldn’t do one, as long as you…
CITYA.M. 14 OCTOBER 2010
the keys to making an MBA count. “If
you are paying for it, like I was, then
you need to do it at the right time. I had
other projects while I was working in
my old job and the MBA allowed me to
concentrate on them. You have to be in
the right frame of mind and have the
time to dedicate to it.” He says that the
most important thing is to choose the
right school, not least because it costs
money to apply. “Go to careers fairs, do
mock interviews and find the right fit
for you.” You should also talk to alumni
to work out if you would fit in.
While some managers might say that
they do not value MBAs, there are plen-
ty who do. Do not underestimate the
importance of the school that you go to,
either. Employers tend to respect MBAs
from the top schools, largely because of
the network they bring with them, and
beneath the top few this advantage
stops applying.
So it can be worth going for a school
that will give you a massive network of
alumni, many of whom are keen to
recruit others from their old school.
Among the biggest are the Spanish
business school IESE with 33,000 alum-
ni in over 100 countries. London
Business School has 30,000 in 130 coun-
tries, while Harvard has over 71,000 in
150 countries. That is a sizeable advan-
tage when looking for a job.
Apart from a vague guarantee of
quality, it’s hard to say why MBAs want
to employ other MBAs. But they do.
Perhaps it all comes down to that
much-vaunted management concept of
“intangible skills.”
Source: FT Global MBA Rankings 2010
200
Increase in salary %
after MBA (RHS)
150
100
50
Chicago London INSEAD
Booth Business School
3. Know the reasons you are doing it. For some,
taking an MBA is all about boosting future
earnings; others want to learn how to run a
business; some turn to the MBA primarily for
the intellectual stimulation.
4. Go to the right school. Reputation matters, so
if your scores are keeping you out of your top
choice, go and re-take the GMAT. Also, study
the alumni and the faculty – find out if they are
of a high standard. Talk to former students, and
go on a visit.
 Lifestyle
Mobileies
r
luxu
Timothy Barber
salutes a whole
other class of phone
O
N THE FACE of it, the idea of
phone as status symbol runs fair-
ly contrary to the general reality
of the phone market now: any-
body can own an iPhone, Blackberry or
any one of the plethora of good-look-
ing, ingeniously engineered smart-
phones out there, and most of us do.
But there are those looking for some-
thing that little bit more special, and a
growing number of ultra-swanky
phones have emerged to cater to them.
The concept has been pioneered by
British company Vertu, which has this
week made a crucial move into the
smartphone market with the launch of
its Blackberry-resembling Constellation
Quest. For over 10 years, Vertu has been
producing phones reflecting the best
qualities of the fine luxury goods: all its
phones are completely handmade at its
Hampshire workshop, using rarefied
materials like carbon fibres, ceramics
and fine leathers. The qwerty keys of the
Constellation Quest, for instance, are
made from specially-grown crystals,
while the screen is made of the same
unscratchable sapphire glass used to
make top-end watches.
GADGETS | NEWS IN BRIEF
GOOGLE TO COMPILE FINANCIAL DATA
Google is planning to launch a new measure
of inflation collated from online shopping
data, to be known as the Google Price
Index (GPI). It’s part of a public data proj-
ect that will see the search giant release
new ways for users to collate information
from a multitude of sources. A list of the
top 20 potential projects – compiled by
Google from data about what things users
were searching for most and what services
they would therefore require – includes
information on oil prices, exchange rates,
GDP growth, unemployment, wages and
sales tax.
OUT OF OFFICE
ZOE STRIMPEL
Nerve: a darkly funny look at online dating.
| Technology
It’s also a winner for functionality,
with a cool interface and lots of inter-
esting little utilities. Running on
Symbian software, it can do all the nor-
mal emailing, social networking and
web navigating you’d expect – includ-
ing your own Vertu email account
that’s centrally backed-up – and you
can configure things to your own pref-
erences. The screen resolution, with
that sapphire crystal covering
and 325 pixels per inch, is stun-
ning, while 16 internal anten-
nae boost connectivity no end.
It’s also a concierge in your
pocket, with a button on the
side of the phone to hook you up
with Vertu’s luxury living
experts, and a City Brief function
providing high-life guides to pret-
ty much every major city in the
world.
Vertu isn’t the only company in
the luxury phone market. Swiss
watch company TAG Heuer’s
Meridiist phone, launched two
years ago with its groovy clock
screen on top, has improved soft-
ware in its latest phone.
At the out-of-this-world end of the
market, meanwhile, is the LeDix phone
from French company Celsius X VI II,
which combines a sleek clam-shape
phone with a minutely-engineered
tourbillon clock built into it – a collec-
tors’ item for haute horology connois-
seurs with very deep pockets.
HELICOPTER DRONE USES IPOD JOYSTICK
Visitors to the recent Tokyo Games show
were treated to a special demonstration of
the Parrot AR Drone, a toy helicopter (pic-
tured) that users can control wirelessly via
their iPhone or iPad. The drone has two cam-
eras mounted on its body, which is suspend-
ed between four helicopter blades that
give it instant manoeuvrability in
any direction. Images from the
camera are beamed back to the
control device, enabled it to act as
a joystick and monitor in one. It can
also network with other drones for interac-
tive playing.
DATING COMEDY NERVE’S LONDON PREMIERE
Nerve, a comedy about love and dating,
has already earned plaudits in New York.
In London it will hit a nerve, too, with the
story of an online dating rookie whose
date has had far too much experience.
Together they explore their fears and
expectations, their past and their vulnera-
bilities. It may be a dark comedy based
around the New York dating scene but it is
the sort that translates perfectly. 19-24 Oct;
tickets £15. Baron's Court Theatre, W14 9HR. To
book, call 020 8932 4747.
THE BIRTH OF
FACEBOOK
THE SOCIAL NETWORK:
REVIEWED TOMORROW
Vertu Constellation Quest
From £5,000
www.vertu.com
TAG Heuer
Meridiist
This version in steel
and rose gold,
£7,300
www.tagheuer.com
Celsius X VI II
Available at Harrods,
£235,000
www.celsius-x-vi-ii.com
FACEBOOK OFFERS MORE SECURITY
Facebook is to offer temporary log-ins for
use on public computers. It works by having
users text the letters “otp” to the number
32665. It replies with a temporary pass-
word. However, the system will require users
to register their mobile phone to their
Facebook account. In addition to this
feature, the site will now also allow
users to view logged-in sessions of
their account so that they can
remotely log out sessions in case
they suspect improper use. Users
can read about safety features at
www.facebook.com/security.
AFFORDABLE ART FAIR
While Frieze hurtles on with its high quo-
tient of glamour and its very expensive
avant garde art, collectors of lesser means
should head to the Affordable Art Fair to
pick up some brilliant spots of contempo-
rary art. Held at Battersea Park, it’s not
just about buying work – you’ll find
everything here from talks on how to get
your collection started to workshops on
how to produce your own art. 14-21 Oct in
Battersea Park. Tickets from £10. To book, go to
www.affordableartfair.co.uk.
27
NICK
BOOTH
TECH TALK
Windows is
the new way
to network
T
HE BIG design concept of the Windows
Phone 7 is that it’s more socially orient-
ed. The phone bit actually works and all
sources of human contact – your
address book, emails, pictures and social media
feeds – are organised into one place, the
People hub. It makes social media updates so
easy they’re dangerous. A default setting
means every picture you take automatically
posts to Facebook. It’s Ashley Cole’s worst
nightmare.
There are at least 60 handset manufactur-
ers making phones that will run Windows
Phone 7. On 21 October, mobile operator O2
launches its own version, a 4.3 inch touch-
screen phone made by HTC. With a five
megapixel camera and 16GB of memory, it’s
got everything the iPhone has – except what-
ever it is that Apple’s got. Still, not everyone
needs to be cool.
With the rise of private social media net-
works designed for City types, such as
Social360.com, Viadeo and MallowStreet,
these Windows Phones could prove the best
tools for social networking.
Take MallowStreet.com. This is a social net-
work so exclusive I was only allowed limited
access. It’s for investment banking types, cor-
porate lawyers, regulators, senior executives.
Once granted access to this magic cognitive
cloud, you can witness their conversa-
tions about everything from
CPI versus RPI, prop-
erty and proper tea.
The great thing
about MallowStreet is
it doesn’t do adverts. Or
recruitment. But hang
on, argues rival Viadeo,
that’s what social net-
working is all about. Self
promotion. Headhunters and
recruitment all scour sites
likes Viadeo and Linkedin to
see who is worth cultivating.
Use Social360.com to see what
they’re saying about your brand.
Three quarters of City corpo-
rations say they are planning on
spending more on social media, so
it makes sense to have a strategy to
exploit it. If MallowStreet and Viadeo are the
platform for self promotion, then a Windows
Phone 7 could be a valid ticket.
FINE WINE FAIR: THIS WEEKEND
Wine lovers – or better yet, aspiring fine
wine lovers – should make time for the
Fine Wine Fair, a new event inspired by
the rising sales of higher-priced wines. It is
the first of its kind to make fine wine
accessible to anyone interested in drink-
ing and learning about the sorts of vin-
tages one often feels best left in the back
on a massive, leather-bound wine list.
Some of the finest chocolate and cheese
will be there too. 15-17 Oct at Chelsea Town
Hall. www.finewinefair.org.
 28 Lifestyle | Art & Books
The art world heats up once more
Timothy Barber has a
look around Frieze
Art Fair, which opens
to the public today
A
S an army of glamorous art indus-
try movers and shakers traipsed
into Frieze Art Fair’s marquee yes-
terday, a young woman was stand-
ing outside distributing paper leaflets for
an upcoming exhibition. Not that surpris-
ing perhaps – some galleries need all the
help they can get publicising themselves –
except that the gallery in question was the
Royal Academy. That London’s most
august art institution should find itself
flyering outside a tent in Regent’s Park is
one measure of the extent to which the
capital’s art scene now triangulates itself
around Frieze.
There are others. The National Gallery’s
new exhibition of works by the 18th cen-
tury Venetian artist Canaletto has coin-
cided with Frieze this week; the
merry-go-round of satellite exhibitions now
includes one from The Saatchi Gallery – its
owner, Charles Saatchi, practically gave
birth to London’s contemporary art
scene as we know it, after all – called The
House of the Noble Man, in a residence
near Frieze, which puts Cezanne, Manet,
Poussin and Picasso alongside Richter,
Murakami and Hirst; and of course,
Frieze now dictates the timing of the con-
temporary art auctions that are the most
immediate signifier of the health – or
otherwise – of the art market.
As far as that goes, Anders
Petterson, managing director of art
market analyst ArtTactic, says the
mood is cautiously optimistic. After a
rotten 2009, record-breaking February
sales apparently signified a return to
business as normal, but momentum
slowed in the summer with some
The grisly taste
of her screams
A detective who tastes sound follows a
sickening murderer, says Zoe Strimpel
SCREAM
BY NIGEL MCCRERY
Quercus, £20
hhhhi
A MORE gruesome beginning to a book
you couldn’t ask for. A woman is bound,
with her kneecaps exposed, as a ruthless
killer tells her how he’s going to carve
through her knee bones, one after the
other, before moving onto other parts. Her
screams are immense but pointless.
Meanwhile, DCI Mark Lapslie – who suf-
fers from synaesthesia, a condition in
which senses are confused so that he
tastes sound – is in Pakistan attending a
terrorism conference. He almost doesn’t
check the message whose subject heading
reads: “You Need to Listen To This” but
then on a whim he does. The sound file
fills his mouth with a sickening taste of
beetroot and salt: 27 screams before a
death rattle.
shows falling significantly short.
“People got carried away with the
rebound earlier in the year and sellers got
a little greedy with the estimates they
demanded, so the summer sales were a bit
down,” Petterson says. “Since then the
market has revived a bit, and people are
being more realistic about the situation.”
Inside the enormous marquee, the fair
is its usual mix of brash colour, big state-
ments and conceptual obscurity. There are
173 booths, each occupied by a different
gallery from across the globe, represent-
ing over a thousand artists.
Here a kinetic sculpture of a carriage
drawn by horses rushes past an installa-
tion of bright neon lights; there a female
figures revolves in pirouette pose, face
shrouded in a raggedy hood and a gun
raised aloft; a vast photo of a football
crowd looks out over the scene, a wall-
sized Ryan McGinley nude flickers in
multi-coloured half-light; an old radio
spins on a record player. Familiar local
names – Hirst, Kapoor, Collishaw, Emin,
Gilbert & George, Offili – are greatly out-
numbered by others of every nationality
Lapslie goes home early to investigate
and is even more concerned to learn that
the message is sent from the hospital
where he’s being treated for synaesthesia Nigel McCrery’s
– also the same place his girlfriend works. Scream is terrifying.
As he and his colleague Emma Bradbury
uncover a string of torture and murder Picture: GETTY
victims, Lapslie realises the killer is get-
ting closer to home – his home. McCrery
delivers a horrifying, immaculately struc-
tured gripper with this one.
LUKA AND THE FIRE OF LIFE
BY JONATHAN CAPE
£12.99
hhhii
RUSHDIE, like Martin Amis and Phillip
Roth, suffers from the “not as good as he
used to be” syndrome. Yet having previ-
ously proved himself adept at writing for
children with Haroun and the Sea of
Stories, Rushdie is back on a firmish foot-
ing here. Would you buy it for your own
making work in every form. Over in a far
corner, the Waddinton Gallery’s booth of
works by older generations of artists –
Rauschenberg, Caulfield, Tapies, even
Picasso – is like a quiet sideshow of sober
consideration away from the madness.
Frieze is a lot of fun and utterly over-
whelming. Themes and trends? Forget it.
Perhaps there’s less work that’s as brazen-
ly, cheaply shocking as in some past years,
as though contemporary art has grown up
a bit. But perhaps that’s just how it
seemed on one trawl around – on a return
visit, things could look different entirely.
Until Sun, Regent’s Park. www.friezeartfair.com
FRIEZE WEEK | Other art events taking place
Several satellite fairs take advantage of the
industry hordes drawn to London for Frieze
week. Art & Design Pavilion (www.padlon-
don.net) brings together art, design, jewellery
and more from 1860 onwards. In Shoreditch,
Moniker (www.monikerartfair.com) puts the
spotlight on the street/urban art movement,
while the Sunday Fair (www.sunday-
wee one? Depends how bohemian you are
and precocious they are. Either way, it’s
lyrical and surreal, laced with Rushdie’s
trademark verbal musicality. The story –
as in Haroun – is about a son, Luka, who
must save his father. Here it is Rashid, who
suddenly falls into a sleep so deep he can-
not be roused. To save him from slipping
away entirely, Luka must journey through
the Magic World, encountering a parade
of fantastical objects along the way, to
finally steal the Fire of Life. It’s a highly
dangerous journey and seemingly endless.
But the rewards are too great to be lost. A
classic quest story if you fancy it, and a
lovely bit of bed-time writing.
EMPIRE OF SILVER
BY CONN IGGULDEN
Harper Collins, £18.99
hhhhi
CITYA.M. 14 OCTOBER 2010
Artworks and industry insiders at this
year’s Frieze Art Fair.
Picture: Micha Theiner/City A.M.
fair.com), which actually runs from today,
gives an alternative take, perhaps filling the
space left by the now-departed Zoo Art Fair.
On the auctions front, the Christie’s post-
war & contemporary art evening show takes
place tonight; tomorrow, all eyes will be on
Sotheby’s contemporary and 20th century
Italian art sales.
THOSE hankering for a bit of historical
skulduggery should go for this finely
hewn work – the hotly tipped fourth
novel in the bestselling Conqueror
series about the life and adventures of
the Khan dynasty.
Genghis Khan is dead, but his legend
and his legacy live on. Now the armies
have gathered to see which of Genghis’
sons has the strength to be Khan. One
son in particular seems the best option.
The great leader Tsubodai sweeps
into the west: through Russia, over the
Carpathian mountains and into
Hungary. The Templar knights have
been broken and there is no king or
army to stop him reaching France.
But at the moment of Tsubodai's
greatest triumph, as his furthest scouts
reach the northern mountains of Italy,
Tsubodai must make a decision that
will change the course of history forev-
er. This is an account of Europe’s birth
pangs and a riproaring read.
CITYA.M. 14 OCTOBER 2010 Lifestyle | TV& Games 29

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

QUICK CROSSWORD
   

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

  more than once in a row or

column, but it must be in a
23
9 5
20
 
22 14
    separate block.
6 14 13
12 22
  7 12 24
 

    ACROSS DOWN
1 Native of Basra, 1 Part of the small
 
   WORDWHEEL U N
for example (5)
3 Commence (5)
6 White heron (5)
intestine (5)
2 Canadian province (6)
3 Easily disgusted (9)
Using only the letters in the Wordwheel, you have 8 Accepted practice (5) 4 Swamped with
    ten minutes to find as many words as possible,
T Y 9 Asked (4) water (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters O 11 Amber-coloured
dessert wine (7)
5 Time of life
between the ages

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
R I 13 Male possessive
pronoun (3)
of 13 and 19 (5)
7 Making fit for a
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
E L 15 Holding device used
in woodworking (5)
specific purpose (9)
10 Hanging cloth used
QUICK CROSSWORD 8 1 5 2 1 2 7
17 Clairvoyance (inits) (3) as a blind (5)

3 2 3 8 3 ) $ 5 & (
9 8 9 8 2 4 9 SUDOKU         
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14 Frozen water (3)
3 2 1 3 9 5         
$ 5 , 5 2 $ 1
7 3 4 4 8 7 9 21 Remainder (4) 16 Document granting
5 ( 3 / 2 7 7 ( '         
6 2 0 0 ( , 6 9 4 8 3 1 7 22 For all (music) (5) an inventor sole
        
( , 6 , ( 6 7 $ 7 6 2 1 5 9 4 3 8 23 Reddish-brown rights (6)
        
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17 Crowd actor (5)
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6 2 5 7 , 1 * & % 7 5 3 7 8 5 The nine-letter word or direction (5) adjoins a house (5)
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25 Kitchen range (5) 20 Left over,
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 Sport
30 CITYA.M. 14 OCTOBER 2010

Results
COMMONWEALTH GAMES
DELHI 2010—Selected Finals
Badminton, Women’s, Singles Bronze Medal: L Cann (Eng)
ICC: No evidence of fixing in Oval ODI
bt S Egelstaff (Sco) 21-18 21-16. Doubles Bronze Medal: H
Tang & K Wilson-Smith (Aus) bt J Wallwork & G White edge of Pakistan’s innings. or support staff,” read a statement. thrown the ODI. Butt (pictured
▲
(Eng) 21-23 21-12 21-16. CRICKET
BY FRANK DALLERES No further investigation into the “The investigation is now com- left) later withdrew the claim
Boxing, Men’s, Light Fly Weight 46-49kg Gold: P Barnes
(NIrl) bt J Uutoni (Nam) won by PTS 8:4. Bantam Weight match at The Oval on 17 September, plete but if new and corroborating under threat of legal action from
56kg Gold Medal: M Wanniarachchi (Sri) bt S McGoldrick INTERNATIONAL Cricket Council which England lost after a batting evidence comes to light then the England and Wales
(Wal) won by PTS +7:7. Light Weight 60kg Gold Medal: T (ICC) chiefs have thrown out allega- collapse, will take place without new clearly the ACSU will re- Cricket Board.
Stalker (Eng) bt J Taylor (Sco) won by 11:3. Light Welter tions that elements of England’s evidence, the ICC’s anti-corruption open the matter.” Earlier in the tour, three
Weight 64kg Gold Medal: M Kumar (Ind) bt B Saunders third one-day match against Pakistan and security unit (ACSU) said. The fixing allegations Pakistan players – Salman
(Eng) won by PTS 11:2. Welter Weight 69kg Gold Medal: P
Gallagher (NIrl) bt C Smith (Eng) won by PTS 11:6. Middle last month may have been fixed. “Following extensive investigations were part of a series of Butt, Mohammad Asif and
Weight 75kg Gold Medal: E O’Kane (NIrl) bt A Ogogo (Eng) The ICC said there was “no com- into allegations about the one-day claims that overshad- Mohammad Amir – were
16:4 won by PTS. Light Heavy Weight 81kg Gold Medal: C pelling evidence” that any individual international between England and owed Pakistan’s entire suspended by the ICC after
Johnson (Sco) bt T McCarthy (NIrl) won by PTS 8:1. Heavy from either team had been involved Pakistan at The Oval in London on 17 tour, and prompted being accused of spot-fixing
Weight 91kg Gold Medal: S Vallily (Eng) bt S Ward (NIrl)
RSCH R1 1:58. in a conspiracy. Cricket’s world gov- September, the ACSU has verified all Pakistan Cricket Board in the final Test at Lord’s.
Cycling, Men’s, 40 km Individual Time Trial: 1 D Millar (Sco)
erning body had launched a probe the available information and con- (PCB) chairman Ijaz Butt to The trio deny any wrongdo-
47mins 18.66secs, 2 A Dowsett (Eng) 48:13.48, 3 L after it was alleged in a newspaper cluded that there was no compelling suggest in response that ing and are due to have their
Durbridge (Aus) 48:19.22. Women’s, Individual Time Trial, that bookmakers had prior knowl- evidence to suspect individual players England players had appeals heard on 30 October.
29km: 1 T Whitten (Can) 38mins 59.30secs, 2 L Villumsen
(Can) 39:4.15, 3 J Shaw (Eng) 39:9.52.
Diving, Men’s, 10m Platform: 1 T Daley (Eng) 538.35pts, 2 M

Double gold for diver Daley

Mitcham (Aus) 509.15, 3 B Lomas (Mal) 487.15.
Hockey, Women’s, Bronze Medal: England 1 South Africa 0.
Lawn Bowls, Men’s, Singles, Bronze Medal: Northern
Ireland bt England 1-1 won by tie break. Gold Medal: Wales
bt Australia 2-1. Women’s, Singles, Gold Medal: England bt
New Zealand 2-0.
Shooting, Men’s, Singles, 50m Rifle Prone: 1 J Hammond
(Sco) 696.90pts, 2 W Potent (Aus) 695.40, 3 M Hall (NIrl)
C’WEALTH GAMES | MEDALS TABLE
▲

694.10. Skeet: 1 R Brickell (Eng) 144pts, 2 G Achilleos (Cyp) COMMONWEALTH GAMES

144, 3 A Chasikos (Cyp) 143. Full Bore Open Stage 3 - 1000 BY FRANK DALLERES
yards: 1 P Patel (Eng) 396pts, 2 J Corbett (Aus) 395, 3 D G S B Total
Calvert (NIrl) 393.
DIVING prodigy Tom Daley dedicated 1. Australia 72 50 47 169
Squash, Men’s, Doubles, Bronze Medal: Australia bt his second gold medal of the
Scotland 2-0. Gold Medal: England bt Australia 2-1. 2. England 37 56 45 138
Women’s, Doubles, Gold Medal: New Zealand bt England 2-0. Commonwealth Games to his serious- 3. India 36 26 34 96
Table Tennis, Men’s Doubles, Bronze Medal: A Baggaley & L
ly ill father after triumphing in the 4. Canada 26 17 32 75
Pitchford (Eng) bt W Henzell & R Frank (Aus) 11-7 8-11 12-10 10m platform. 5. South Africa 12 11 10 33
10-12 11-6. Rob Daley remained at home for
CRICKET chemotherapy instead of travelling to
SECOND TEST MATCH Delhi to watch his son compete, but
India v Australia the 16-year-old did him proud by
BANGALORE: India beat Australia by seven wickets adding to the 10m synchro crown he
AUSTRALIA: First Innings 478 (North 128, Ponting 77, Paine 59, won on Tuesday.
Watson 57, Singh 4-148)
INDIA: First Innings 495 (Tendulkar 214, Vijay 139) Daley put his recent injury worries
AUSTRALIA: Second Innings firmly behind him and held his nerve
(Overnight 202-7)
M Johnson b Khan ........................................................................................11 to win a duel of the highest quality
N Hauritz not out............................................................................................21 with Australian Olympic champion
B Hilfenhaus b Sreesanth ............................................................................0 Matthew Mitcham.
P George c Dhoni b Khan..............................................................................0 “All I can say is that one is for you,”
B1 lb5 w3 nb5 ......................................................................................14
Daley told his father, who has been a
Total (75.2 overs) ............................................................................223
Fall: 58, 58, 65, 126, 131, 181, 185, 217, 218. familiar figure by his side at competi-
Bowling: Khan 11.2-1-41-3, Sreesanth 14-2-48-2, Ojha 25-5-57- tions. “I knew you would be watching
3, Singh 21-2-63-2, Sehwag 4-0-8-0. on TV and I had to do it for you.”
INDIA: Second Inns The teenager was unable to defend
M Vijay lbw Watson ....................................................................................37 his European title earlier this year
V Sehwag c Paine b Hilfenhaus..................................................................7
C Pujara b Hauritz ........................................................................................72 after suffering a shoulder injury,
S Tendulkar not out ......................................................................................53 which also hampered his prepara-
R Dravid not out..............................................................................................21 tions for the Commonwealth Games.
B8 lb5 w4 ..............................................................................................17 But the world champion from
Total (3 wkts., 45 overs)..............................................................207 Devon showed no signs of rustiness as
Fall: 17, 89, 146.
Bowling: Hilfenhaus 7-0-27-1, Johnson 14-4-42-0, Hauritz 12- the lead swung between him and Daley, 16, (main pic) added to the 10m synchro title he won with Max Brick earlier this week. Right, Simon Vallily. Pictures: PA
0-76-1, George 7-0-29-0, Watson 5-0-20-1. Mitcham in an absorbing final.
Umpires: B Bowden & I Gould. Daley went into the last round with away with another gold medal is the summer. I’m so happy to be back Vallily earned the team another title
TENNIS a slender advantage of 1.75 points incredible,” said Daley, who won syn- and on top of my game to win a by beating Northern Ireland’s Steven
ATP SHANGHAI MASTERS (China)—22nd Rnd: A Murray and Mitcham failed to make a clean chro gold with Max Brick and called Commonwealth Games medal.” Ward to the heavyweight crown.
(GB) bt Y Bai (Chn) 6-2 6-2. entry, handing the title to the English his last effort yesterday “the dive of Boxer Tom Stalker, meanwhile, Another Englishman, Bradley
schoolboy. my life”. won lightweight gold for England Saunders, was beaten to the light-wel-
SPORTS EDITOR FRANK DALLERES “Today has been a complete whirl- “There has been a lot of pressure, after beating Scotland’s Josh Taylor terweight title by India’s Manoj
email sport@cityam.com wind. I am just so happy. To come coming back from my torn triceps in 11-3 in the final. Compatriot Simon Kumar.

Blow for Chelsea as Benayoun is ruled SPORT | IN BRIEF

out by injury until April Ramsey in training Cudmore handed 10-week ban
RUGBY UNION: Clermont’s Canadian
lock Jamie Cudmore has been banned for
10 weeks for stamping against Saracens
last weekend.
Serbia sorry for Italy incident
FOOTBALL: Serbia’s ambassador to Italy
apologised yesterday after away sup-
porters caused a Euro 2012 qualifier
between the two countries to be aban-

West Ham star Benayoun, 30, is now

and nearing return Cudmore’s offence in the Heineken Cup
victory was deemed top entry, earning
doned.
Serbian fans threw flares and fire-
▲

FOOTBALL
BY FRANK DALLERES tipped to be treated by the same him a length suspension, at an independ- works onto the pitch and into the crowd,
Icelandic surgeon who repaired David ent hearing in Dublin yesterday. Wales causing the match to be called to a halt
MIDFIELDER Yossi Benayoun has suf- Beckham’s tendon earlier this year. ARSENAL midfielder Aaron Ramsey and Cardiff flanker Martyn Williams will after just six minutes on Tuesday night.
fered another blow to his fledgling Benayoun has only made six is back in full training following an be available for the whole autumn series European chiefs Uefa have launched an
Chelsea career after he was ruled out appearances and is yet to start in the eight-month battle to recover from a after escaping with a two-week ban for investigation into what they called “seri-
for up to six months with an Achilles Premier League since swapping horror double leg break. striking with the knee. ous disorder”.
injury. Anfield for Stamford Bridge in July. The Wales midfielder, 19, has start-
Banayoun, a £5m summer signing His chances of establishing himself ed kicking a ball again and could India secure 2-0 series win Murray through in Shangahi
from Liverpool, has been booked in this season look to be all but over, make his first-team comeback as CRICKET: Batsman Sachin Tendulkar hit TENNIS: Britain’s Andy Murray will face
for surgery on Monday and may not however, as Chelsea could have only early as next month. the winning runs as India beat Australia Jeremy Chardy this afternoon after
return to action until mid-April. half a dozen games left by the time “It’s great to be back outside and by seven wickets to wrap up a 2-0 series reaching the third round of the Shanghai
The Israeli ruptured his Achilles he is well enough for first-team foot- kicking the ball again,” said Ramsey. victory. Debutant Cheteshwar Pujara top Masters.
during training while on internation- ball again. It is also a blow to the dou- “I’ve missed a lot and it’s made me scored with 72 as India comfortably Murray beat Chinese wild card and
al duty last week and was sent back to ble winners, who are still without realise how much it means to me.” reached their target of 207 to win in home favourite Yan Bai 6-2, 6-2 in a
west London for further tests. Former England midfielder Frank Lampard. Bangalore. tricky contest yesterday.
CITYA.M. 14 OCTOBER 2010
Hicks halts Reds sale
Tom Hicks (left) has taken action to prevent John Henry’s NESV (centre) from buying Liverpool, whose chairman is Martin Broughton (right). Pictures: GETTY/MICHA THEINER/PA
▲
LIVERPOOL
BY FRANK DALLERES
LIVERPOOL owners Tom Hicks and
George Gillett last night dramati-
cally halted the sale of the club at
the 11th hour by obtaining a tem-
porary restraining order from a
Texan court over what they called
an “epic swindle”.
In the same lawsuit Hicks and
Gillett also claimed damages of
more than £1bn from the rest of
the club’s board, would-be buyers
New England Sports Ventures and
the Royal Bank of Scotland.
The audacious last-ditch move
came as Liverpool’s board met in
London to ratify a £300m sale to
NESV, whose frontman John Henry
attended, hours after a High Court
judgement emphatically upheld
Damages claim will be very
difficult, warn legal experts
▲
LIVERPOOL
BY FRANK DALLERES
TOM HICKS and George Gillett turned
to US courts after Mr Justice Floyd’s
emphatic verdict in the High Court
gave them virtually no chance of
appeal and only a slim hope of pursu-
ing a claim for damages, sports law
experts told City A.M.
The judge’s verdict that the
Liverpool owners were not entitled to
sack members of the board in an
attempt to block a sale to New
England Sports Ventures paved the
way for Liverpool to push ahead with
the deal last night.
“It was a significant victory for RBS
and Liverpool,” said Andrew Nixon, of
their right to push ahead despite
the objections of Hicks and Gillett.
Liverpool last night called the
owners’ action “unwarranted and
damaging” and vowed to overturn
it “as swiftly as possible”.
A top sports lawyer questioned
the move. Graham Shear, a partner
at Berwin Leighton Paisner, told
City A.M.: “It is hard to understand
how a court there could have any
jurisdiction over the constitution
of the board of an English compa-
ny, English legal agreements
and/or company law here.”
In the short-term, however, Hicks
and Gillett’s actions prevented the
completion of a sale that looked
inevitable from the moment Mr
Justice Floyd announced his verdict
yesterday morning. A court hear-
ing in Texas is scheduled for 25
Thomas Eggar. “One couldn’t rule out
Hicks and Gillett giving consideration
to a damages claim because they
believe £300m is less than what the
club is worth. Realistically, it’s going
to be very difficult.
“If they were going to bring a claim
it would be based on an argument the
board did not do their duty in going
through due diligence or considering
other bids. But the judge has
endorsed the approach of Martin
Broughton and the board.”
Graham Shear, a partner at Berwin
Leighton Paisner, said Liverpool’s
obtaining of legal and financial
advice during the process of selecting
a preferred bidder will count in their
favour. He said: “At this stage the only
October, although Liverpool and
RBS, the owners’ major creditors,
are likely to seek a way to proceed
before then.
The Americans’ request for a
restraining order accuses
Liverpool’s board, led by chairman
Martin Broughton, and RBS of con-
spiring to sell to NESV at a price
they knew to be far below its true
market value. Hicks and Gillett had
hoped to sell for closer to £600m.
They argue that three other bid-
ders, including American invest-
ment bank FBR Capital Markets,
whose offer had not previously
been fully disclosed, had made bids
of greater value than that of NESV,
owners of baseball’s Boston Red
Sox. By rejecting these, they say,
they will suffer a loss. Hicks and
Gillett stand to lose around £100m
recourse Hicks and Gillett have is a
damages claim if they can prove they
have suffered a loss from missing out
on a higher or more advantageous
offer. I can’t really see that as Barclays
Capital was providing the board with
advice on complicated offers.
“I wouldn’t be surprised if Hicks
and Gillett carry on fighting because
they have lost a lot of money. But on
the basis of the arguments in court
the judge did not have a difficult deci-
sion to make.
“Their admission that they
breached the undertaking agree-
ments regarding corporate gover-
nance removed a potential factual
dispute and provided the judge with
a lot of assistance.”
Sport | Football
if the NESV deal is completed.
A statement from Hicks read:
“The owners of Liverpool Football
Club today reported that a Texas
State District Court has granted a
temporary restraining order (TRO)
enjoining the Board of Liverpool
Football Club (LFC) from executing a
sale of the Club to New England
Sports Ventures (NESV). The court
set a hearing date of October 25,
2010. The TRO request, signed by
Judge Jim Jordan of the 160th
District Court in Dallas, was part of a
lawsuit filed today by the owners of
LFC against Royal Bank of Scotland
(RBS), Martin Broughton, Christian
Purslow, Ian Ayre, NESV and Philip
Nash. The lawsuit also seeks tempo-
rary and permanent injunctions,
and damages totalling approximate-
ly $1.6 billion (over £1 billion).”
Lord Grabiner QC steals show
with a match-winning cameo
HIGH COURT SKETCH
BY FRANK DALLERES
IT WASN’T quite Athens 2005, but
Liverpool’s High Court victory repre-
sented an exhilarating comeback of
sorts. And the match-winner this week
was not Steven Gerrard but the more
scholarly, if less athletic, figure of Lord
Grabiner QC.
The legal heavyweight, reputed to
be the second highest paid barrister in
the land, merely watched from the
bench in the early stages of Tuesday’s
hearing, as Richard Snowden QC out-
lined Royal Bank of Scotland’s case
against Tom Hicks and George Gillett.
Matters took a surprising turn when
the American pair’s barrister, Paul
Girolami QC, skilfully began to sow
seeds of doubt about the legitimacy of
31
Liverpool hit
out at late
bid to delay
NESV deal
▲
LIVERPOOL
BY FRANK DALLERES
LIVERPOOL slammed Tom Hicks and
George Gillett’s last-ditch attempt to
scupper their deal with New England
Sports Ventures late last night.
Calling the move “unwarranted
and damaging”, the club’s board
vowed to remove the latest obstacle to
completing a protracted sale.
Liverpool chairman Martin
Broughton was preparing to
announce that the £300m transac-
tion had been validated by the board
when Hicks and Gillett sprung their
temporary restraining order.
Earlier he had celebrated the deci-
sion of High Court judge Mr Justice
Floyd in ruling the board could sell to
NESV, despite objections from Hicks
and Gillett.
“Following the successful conclu-
sion of High Court proceedings today,
the Boards of Directors of Kop
Football and Kop Holdings met
tonight and resolved to complete the
sale of Liverpool FC to New England
Sports Ventures,” read a statement.
“Regrettably, Thomas Hicks and
George Gillett have tonight obtained
a Temporary Restraining Order from
a Texas District Court against the
independent directors, Royal Bank of
Scotland PLC and NESV to prevent the
transaction being completed.
“The independent directors consid-
er the restraining order to be unwar-
ranted and damaging and will move
as swiftly as possible to seek to have it
removed.”
Hicks and Gillett are uder pressure
to sell from Royal Bank of Scotland, to
whom they owe more than £200m.
the bank’s case and sought to unpick
the threads of its argument, swinging
momentum in his clients’ favour.
Were Hicks and Gillett, who stood
accused of trying to delay or scupper a
sale, really going to snatch victory and
dash the Liverpool board’s plans to sell
the club to New England Sports
Ventures in Court 16?
Enter Grabiner. Liverpool’s QC chose
his moment to pipe up and began to
bulldoze the objections one by one. He
showed wit, flair and a remarkable
knowledge of case law, even if he did
consider its use vulgar, referencing
cases from 1974 and, in one crowd-
pleasing move, 1896.
Only the judge Mr Justice Floyd
knows how much Grabiner’s interven-
tion influenced his judgement in
Liverpool’s favour, but from the gallery
he looked the clear man of the match.
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