www.cityindex.co.
uk
Issue 1,220 Wednesday 15 September 2010
LSE BOSS: HELP ME
PROTECT THE CITY
REGULATION
▲
BY DAVID HELLIER AND MATTHEW WEST
THE London Stock Exchange’s boss
last night called on those involved in
the capital raising business to back his
campaign against proposed new rules
he fears could “severely” impact
London’s competitiveness.
There are growing fears that the
new rules could chase capital raising
out of London, robbing the City of
much-needed income and jobs.
Xavier Rolet opposes controversial
plans to split the regulation of the pri-
mary and secondary capital raising
markets between the new Consumer
Protection and Markets Authority
(CPMA) and a strengthened Financial
Reporting Council (FRC). While seem-
ingly obscure, the move will have seri-
ous repercussions, critics warn.
Others in the City agree but have so
far largely kept their counsel.
Yesterday Rolet asked for more critics
of the government’s proposals to
come forward, for the sake of the City
and its ability to raise funds for large
and small companies alike.
“I don’t speak for others but I would
say that I would not be surprised if a
number of other participants issued
similar views to ours,” he told City A.M.
“I want to encourage them to make
their views known. We need a robust
response to the consultation.”
The government’s consultation
process ends on 18 October. “We don’t
have long,” warned Rolet.
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Xavier Rolet, the LSE’s CEO, is spearheading a campaign against proposed new regulations
Rolet is concerned that separating
the regulation of primary listings –
those companies that are raising
money for the first time – from the
regulation of secondary listings
makes little sense, since it will make
regulation less efficient. But he is
most concerned about the conse-
quences of doing this on the UK’s
influence in Brussels.
The CPMA has the UK’s only vote on
Europe’s new super regulator. Rolet
fears that it will not be able to repre-
sent the views of the primary listings
NASDAQ ▲2,289.77 +4.06 £/$ 1.55 ▲+0.01 £/¤ 1.20 unc

www.cityam.com
market there if that area is no longer
within its remit. “Given the sheer
weight of regulation, you need to
have experts in the room who have a
detailed understanding of both pri-
mary and secondary market issues
and are responsible for the outcome,”
he said.
Rolet said he was positive the gov-
ernment was consulting on the issue
and is hopeful changes can be made.
The Investment Management
Association has criticised the changes.
It says that separating the regulation
P28
Picture: Micha Theiner/City A.M.
of primary and secondary markets
could increase risks of market abuse.
The Association of British Insurers
and the National Association of
Pension Funds told City A.M. they were
still consulting their members.
For its part, the FRC is refusing to
say whether it even wants the new
responsibilities. Stephen Haddrill, the
chief executive of the FRC, said: “We
will make our views known to govern-
ment when we have completed our
own analysis.”
WHEN RED TAPE GOES WRONG: P8-9
¤/$ ▲1.30 +0.01
STATE PAYS
THE MOST
PUBLIC SECTOR
WORKERS EARN
£7K MORE P6
FREE
US expects
to sue BP
over spill
▲
ENERGY
BY MARION DAKERS
OIL giant BP learned last night it
could be hit by a civil lawsuit from the
US Justice Department, as outgoing
chief executive Tony Hayward pre-
pares to face MPs over the Deepwater
Horizon disaster today.
The department said in a court fil-
ing on Monday that the US govern-
ment “expects that it may file a civil
complaint related to the Deepwater
Horizon disaster” after reviewing the
relevant environmental laws.
The government has not yet filed a
civil action over the spill in the Gulf of
Mexico, but has set out the practical
details of any potential claim in
Monday’s document, seen by City A.M.
Hannah August, a spokesperson for
the Department of Justice, said: “As
we have said from the beginning, we
are committed to ensuring that those
responsible clean up the mess they
made, restore or replace the natural
resources lost or injured in this
tragedy, and repay every cent of tax-
payer money.”
BP declined to comment on court
matters.
The district court in Louisiana is
already set to hear more than 300
cases arising from the disaster on 20
April, and the firm has begun to sell
assets to pay for the clean-up and
$20bn (£12.9bn) compensation fund.
Hayward will appear this afternoon
before the parliamentary committee
on energy and climate change to talk
about the Gulf of Mexico oil spill and
its implications for the UK.
Certified Distribution
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 2 News
We need real reforms as well as cuts
EDITOR’S LETTER
ALLISTER HEATH
IMAGINE a failing, near-bankrupt cor-
poration, saddled with out of control
and deeply inefficient subsidiaries. A
new management team has just been
sent in. The previous incumbents
failed miserably; the firm’s divisions
are loss-making, following their own
insular agenda and producing poor
products at too high a cost.
In the private sector, the solution
would be clear: the new executives
would come in with a clear mission to
reengineer all parts of the firm. Costs
would be slashed; new systems put in
place; weak middle managers cleared
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News Editor Ben Griffiths
Night Editor Katie Hope
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WHAT THE OTHER PAPERS SAY THIS MORNING
TESCO ADVANCES IN CARREFOUR
ASIAN AUCTION
Tesco is among the bidders through
to the second round of the auction
for Carrefour’s south-east Asian
assets, which are for sale for up to
$1bn (£642m). Tesco, the world’s
third-biggest supermarket chain by
sales after Walmart and Carrefour,
was one of more than 10 first-round
bidders for the stores in Thailand,
Malaysia and Singapore.
EDWARDS UP FOR SALE AS MARKET
REVIVES
A rebound in the semiconductor
industry has prompted the private
equity owners of Edwards to hire
investment banks to handle a £1.5bn
auction of the company that supplies
vacuum technology to the world’s
biggest chipmakers. Morgan Stanley,
Bank of America Merrill Lynch and
Goldman Sachs have been appointed
out; dozens of new executives brought
in, perhaps with the help of head-
hunters. Pretty quickly, the situation
would be stabilised, losses eliminated,
costs slashed by a quarter or a third, in
some cases by shifting production
abroad or by using outside contrac-
tors, and productivity of the remain-
ing staff hiked – and all the while
better products would be offered to
consumers. We have seen such trans-
formations time and again; real lead-
ership and managerial skill can do
wonders. A car company that is being
nursed back to health would never
dream of offering worse cars to its con-
sumers; it is astonishing how much
scope there is in failing businesses to
boost quality while cutting costs.
In the public sector, however, it
doesn’t seem to work that way – at
least not under this government. Its
approach to cost-cutting is looking
increasingly flawed; instead of chang-
ing the management and restructur-
ing the way services are offered, it has
all too often accepted the nonsensical
Potash claims
rivals will bid
M&A
▲
BY HARRY BANKS
FERTILISER company Potash Corp is
not considering a large stake sale to a
third party or long-term production
sharing agreements as serious
options to block a sale to BHP Billiton,
investors who met with the company
said yesterday.
Potash Corp chief financial officer
Wayne Brownlee was in New York
meeting with investors on Monday
and yesterday ahead of a presentation
at a conference this morning, the
investors said.
The investors spoke on the condi-
tion of anonymity. They said
Brownlee also echoed previous com-
pany statements on the strong funda-
mentals and prospects of the
business.
Investors said he reiterated earlier
by CCMP and Unitas Capital, the for-
mer US and Asian buy-out arms of
JPMorgan, to advise on strategic
options for Edwards.
NPS TO INVEST $1BN MORE IN
PROPERTY
The National Pension Service of
Korea, the world’s fifth-largest pen-
sion fund, has pledged to spend a fur-
ther $1bn (£643m) on commercial
property across Europe, having
agreed a new mandate to invest with
Rockspring, the UK property asset
manager.
EVERCORE TAKES $20M BRAZIL BANK
STAKE
Evercore Partners has invested in a
boutique bank in Brazil as the inde-
pendent advisory firm seeks to tap
into rising mergers and acquisitions
activity in the country. Evercore will
pay $20m in cash and securities for a
50 per cent sake in G5, which is
focused on M&A and investment
management,
claim made by its opponents that serv-
ices are already fully efficient and that
the only cuts that can be made are to
front-line staff. Sure, some waste is
being rooted out; some quangos are
being dismantled – but no real reengi-
neering takes place, with the result
that tens of thousands of soldiers,
nurses, doctors and police officers
could lose their jobs. What is depress-
ing, is this is largely unnecessary.
The only people who have changed
are the ministers at the top. The actu-
al management of government
departments remains unchanged; the
same civil servants are still running
the show, trying to protect their own
empires. The same is almost universal-
ly true of public sector bodies such as
hospital trusts and of course local gov-
ernment. There has been no revolu-
tion. Hardly any special advisers have
been appointed by the coalition; a
golden opportunity to parachute in
hundreds of experienced, determined
restructuring experts, cost cutters and
turnaround specialists has been
Potash Corp statements that the com-
pany has been in talks with third par-
ties about alternative transactions to
the BHP bid.
Last month, BHP launched a $39bn
(£25bn) hostile bid for Potash Corp as
the Anglo-Australian miner looks to
become the world’s largest fertiliser
company.
However, Potash has resisted the
offer, with chief executive Bill Doyle
writing to staff on Monday to claim
the firm is ready for a “marathon, not
a sprint” when it comes to other bids.
Potash declined to comment.
Potash chief Wayne
Brownlee says the firm
will not sell a large
stake to block a sale to
BHP Billiton
NEW BANK RULES ARE TOO WEAK TO
WORK, SAYS MYNERS
The new global deal on banks’ capital
was “disappointing” and did not
push financial institutions hard
enough to become safer, Lord Myners
said yesterday. The former City minis-
ter, a key figure in formulating the
banking bailout in 2008, said that the
rules agreed by the Basel Committee
on Banking Supervision on Sunday
did not go far enough.
IPAD SHORTAGE CONTRIBUTES TO
BEST BUY LOSSES
Shortages of Apple’s iPad tablet in the
US after the product’s launch
deterred customers away from Best
Buy, the world’s biggest consumer
electronics retailer, and contributed
to a loss in its market share in the
most recent quarter. However, the US-
based retailer beat analysts’ expecta-
tions and raised its outlook.
squandered. Experienced outsourcers
such as Serco, a firm which has shown
that it can manage services on the gov-
ernment’s behalf at a lower cost, have
not been called in. Instead of trying to
achieve as much – or almost as much
– with less, the coalition appears to
have given up and to be prepared to
provide far fewer services in return for
a little bit less money. The result is
likely to be a huge electoral backlash.
Already, YouGov has the Tories on
40 per cent, Labour on 39 per cent and
the LibDems on 12 per cent. Given
that Labour still doesn’t have a leader,
and that the cuts have barely started,
this ultra-narrow gap ought to be
keeping David Cameron awake at
night. It is vital for Britain’s prosperity
that the public finances be nursed
back to health as soon as possible, and
that our bloated government be down-
sized. The coalition government must
get a grip and show that it can reform
as well as cut.
allister.heath@cityam.com
THE PUBLIC/ PRIVATE PAY DIVIDE: P6
Elizabeth Warren is close to being named consumer finance regulator Picture: REUTERS
Warren eyes watchdog job
US POLITICS
▲
BY MARION DAKERS
AMERICAN President Barack Obama
is close to appointing Wall Street crit-
ic Elizabeth Warren as his interim
consumer finance regulator, accord-
ing to reports last night.
Lawmakers have pressed Obama to
instead hire a permanent head for
the new consumer financial protec-
tion agency, which would mean a
fierce debate in the Senate over
Warren’s suitability.
CHINESE THINK-TANK WARNS US IT
WILL EMERGE AS LOSER IN TRADE WAR
A State Council think-tank in China
has warned Washington that the US
will come off worst in a trade war if it
imposes sanctions against Beijing over
the two nations’ currency spat. Ding
Yifan, a policy guru at the
Development Research Centre, said
China could respond by selling hold-
ings of US debt, estimated at over $1.5
trillion (£963bn). This would trigger a
rise in US interest rates.
WORLD TRADE ORGANISATION TO RULE
BOEING $24BN SUBSIDIES ILLEGAL
The World Trade Organisation is
expected to rule today that huge sub-
sidies paid to Boeing since the early
1990s are illegal, equalising the score
in the epic legal fight between the US
planemaker and Europe’s Airbus. The
ruling is symbolic as the WTO cannot
issue legally binding decisions.
CITYA.M. 15 SEPTEMBER 2010
NEWS | IN BRIEF
Phantom trades on metal market
American derivatives exchange operator
CME Group accidentally placed dummy
test orders on its active energy and met-
als markets on Monday afternoon. A
spokesperson could not verify whether
there had been any price impact from
the test orders being placed on its live
trading system.
S&P downgrades Bank of Ireland
Credit rating agency Standard & Poor’s
downgraded its outlook on Bank of
Ireland to negative yesterday, on the
back of worries about the Irish economy
and large state support. S&P has kept
its rating as A- / A-2 but said it was
revising its outlook from stable to nega-
tive due to the “considerable challenges”
the bank faces.
EU plans to monitor short selling
The European Commission will today
publish draft rules on derivatives and
short-selling, which are expected to sug-
gest boosting national regulators’ pow-
ers. European officials hope to monitor
the derivatives market to assess the
extent of short selling. Germany has
already banned some types of the trade.
Warren, 61, is a Harvard law profes-
sor and bankruptcy expert who has
served as chair of the Congressional
Oversight Panel, a watchdog for the
US financial bailout program.
Her appointment is opposed by the
financial industry and many
Republicans, who contend she would
impose heavy-handed regulations
that would hurt Wall Street’s profits
and global competitiveness.
The new agency will have power to
write and enforce rules on credit
cards, mortgages and other products.
IBM CHIEF SLAMS HP
International Business Machines’s
chief sharply criticised rival Hewlett-
Packard, saying it fell behind the
technology curve and bungled the
removal of its former chief executive,
Mark Hurd. In a rare public broad-
side, IBM Chief Executive Samuel J.
Palmisano said he doesn’t worry
about companies such as H-P that
have slashed their investments in
core technologies and need to make
expensive acquisitions to keep up.
MANAGEMENT SHAKE-UP AT WARNER
BROS RECORDS
In a management shake-up at one of
the nation's biggest music labels, Tom
Whalley, chairman and chief execu-
tive of Warner Bros. Records, is
departing after nine years on the job.
Parent company Warner Music Group
said yesterday that Mr. Whalley will
be succeeded by Rob Cavallo.
CITYA.M. 15 SEPTEMBER 2010
Hedgie body
to clash with
FSA over pay
▲
HEDGE FUNDS
BY STEVE DINNEEN
HEDGE fund industry body the
Alternative Investment Management
Association (AIMA) is set to clash with
the FSA over proposed rules on pay.
AIMA is furious that new European
rules designed to prevent reckless
behaviour in the banking industry
will affect its members.
AIMA said yesterday it will meet
with the FSA to suggest ways to water
down the EU regulations. These rules,
which will take effect in January, will
apply to many asset managers in the
27-country bloc, as well as banks and
brokers, as part of the global effort by
regulators and policy-makers to
guard against a repeat of 2008’s
financial crisis.
In a strongly worded email sent to
the watchdog, AIMA pointed out the
fundamental differences between
hedge fund managers and bankers
and called for clarity over the imple-
mentation of the rules.
AIMA points out the FSA has already
determined that no individual firm
poses a systemic risk of the type the EU
rules are meant to help prevent.
The email, written by AIMA chief
executive Andrew Baker, said:
“Remuneration in the hedge fund
sector does not encourage the reck-
less and short-termist behaviour the
‘bonus culture’ has created else-
where – quite the opposite.
Performance fees help to align the
interests of manager and investor.
And they do not reward failure,
which was another criticism of the
‘bonus culture’ at large financial
institutions.”
The FSA is consulting with the
industry until 8 October on how it
might apply the measures, as each EU
country regulator has some discre-
tion. The FSA consultation paper
Revising the Remuneration Code cur-
rently applies to 27 of the largest
banks, building societies and broker
dealers. Proposed amendments would
roll it out to around 2,500 firms.
Gold prices have reached a record high as investors avoid risk
Gold surges to fresh high
as investors seek safety
COMMODITIES
▲
BY HARRY BANKS
GOLD hit record highs above $1,270 an
ounce yesterday in its biggest one-day
rally in four months, as the US dollar
declined broadly after upbeat data
failed to convince investors to shift
into risk-linked assets.
Gold is now on course for a 15 per
cent gain in 2010, fuelled largely by
investor nervousness that stemmed
from the fallout from the Eurozone
Picture: GETTY
debt crisis and from economic data
that has suggested global economic
growth may be losing momentum.
Spot gold was at $1,269.65 an ounce
by mid-afternoon, up from $1,245.25
the day before, having hit a record
high of $1,271.20 earlier in the session.
US gold futures for December delivery
were last up $24.3 an ounce at
$1,271.20.
“It’s continuing the trends that
we’ve seen through this year,” said
Tom Kendall at Credit Suisse.
News 3
Credit Suisse
spends $425m
on York Capital
M&A
▲
CREDIT Suisse said yesterday it has
bought a minority interest in hedge
fund York Capital for $425m
(£273.3m), following a year of talks.
The stake, thought to be around 30
per cent, is a non-controlling interest,
and Credit Suisse won’t invest in any
of York’s funds. The bank has been in
touch with US authorities to ensure
the deal complies with the recent
Volcker rules, which ban retail banks
from taking part in risky operations
like hedge funds and private equity.
Credit Suisse’s asset management
arm will make extra payments based
on York’s performance over five years.
The New York-based hedge fund,
which has offices in London, will
retain its top management staff
including chief executive and
founder Jamie Dinan.
Dinan said of the deal: “We see
tremendous opportunities in the
marketplace for event-driven and
credit strategies and we think our
ability to capitalise on these opportu-
nities will be enhanced by Credit
Suisse’s global reach and resources,
particularly in parts of the world
where we are increasing our invest-
ment activity.”
York Capital manages around
$14bn and specialises in mergers,
acquisitions and distressed assets.
 4 News
Greece raises
€1.17bn in key
debt auction
▲
EUROZONE ECONOMY
BY VICTORIA BATES
INVESTORS across Europe breathed a
sigh of relief yesterday as Greece suc-
cessfully tapped the capital markets
for over €1bn (£836.6m) in a debt auc-
tion.
Analysts were encouraged by the
success of the auction, despite the
fact that the bonds in question were
short-term six-month Treasury bills,
for which Greece had to pay a high
yield of 4.82 per cent, compared to
4.65 per cent at its last auction in July.
But demand for the debt was high,
with the bid-to-cover ratio at 4.54
compared to 3.64 in the previous
issue, according to Greece’s Public
Debt Management Agency (PDMA).
Total bids reached €4.08bn, of which
Athens finally accepted €1.17bn. The
auction was originally for €900m.
The debt issue comes just four
months after Eurozone states and the
International Monetary Fund (IMF)
agreed a mammoth €110bn three-
year bail-out deal for Greece, which
had threatened to default on its huge
debt and send other fiscally chal-
lenged European countries into a
downward spiral. Spain, Portugal,
Ireland, Italy and even the UK all
came under the scrutiny of markets
concerned over contagion.
In return, Greek Prime Minister
George Papandreou agreed to enforce
an austerity drive in the country,
sparking a series of violent riots from
citizens. The measures agreed include
freezing public sector pay and pen-
sions, upping VAT from 21 per cent to
23 per cent, and hiking duty on alco-
hol and fuel by 10 per cent.
The debt auction came as the IMF
said Greece is on track to slash its
budget deficit according to plan this
year, but needs to further improve tax
collection and control spending to
sustainably shore up its finances.
“The ambitious fiscal consolidation
program remains on track, but pres-
sure points are evident,” the IMF said
in a report published one day after
the debt-laden country obtained a
second installment of funds.
CITYA.M. 15 SEPTEMBER 2010
Swiss Re says
Basel III will
aid reinsurers
BANKING
▲
THE NEW rules on banking capital
are good news for reinsurance compa-
nies, the chief economist at reinsurer
Swiss Re said yesterday.
“Banks’ capital charges have been
rightly raised by quite a bit. At the
centre of the crisis were the banks,
not the insurers,” said Thomas Hess.
Banks have been providing hybrid
capital and other capital substitute
products, he said, but the Basel III reg-
ulations may shift that power
towards reinsurers.
Hess claimed Basel III will have a
much bigger effect on the financial
world than the Solvency II rules that
are set to reform the insurance indus-
try. “Banks will have much bigger
challenges to cope with the new regu-
lation than insurers will,” he said.
However a member of the
European Central Bank governing
board played down the effects of Basel
III on the economy yesterday. “It is
argued that, by placing additional
burdens on banks, their capacity to
hand out loans is constrained to a
degree that might reduce economic
performance,” said Axel Weber.
“However, recent studies by the
Basel Committee...and others show
that the impact of financial reforms
on economic performance is likely to
Greek Prime Minister George Papandreou has implemented severe austerity cuts be rather small.”
 6 Economic News
US August retail sales gain to
ease fears of a new recession
▲
WORLD ECONOMY
BY HARRY BANKS
SALES at US retailers posted their
largest gain in five months in August
on strong receipts at gasoline stations
and clothing outlets, further assuag-
ing fears of a double-dip recession.
The Commerce Department yester-
day said total retail sales rose 0.4 per
cent following a revised 0.3 per cent
rise in July. It was the second straight
month of gains in retail sales, which
are a measure of consumer health.
July sales had been previously report-
ed to have increased 0.4 per cent.
“It suggests American consumers
remain resilient despite the backdrop
of high unemployment and declining
home values. On the margin, this
data reduces some concerns about a
double-dip recession,” said Omer
Esiner, chief market analyst at
Commonwealth Foreign Exchange.
US stock index futures turned posi-
tive after the report, while Treasury
debt prices pared gains. The dollar
briefly trimmed losses versus the yen.
Data so far for August, including
private payrolls and manufacturing,
have pointed to a tentative improve-
ment in the economy after a recent
soft patch.
The recovery from the worst reces-
sion since the 1930s has cooled off as
the boost from an $814bn (£524bn)
government stimulus package fades
and unemployment remains stub-
bornly high.
ANALYSIS lContributions to the change in the 12-month rate
Food & non-alcoholic beverages Alcohol & tobacco
0.08
Housing & household services Furniture & household goods
-0.01
Transport Communication
-0.04
Education Restaurants & hotels
0 0
Surge in food
prices keeps
inflation high
▲
UK ECONOMY
BY JESSICA MEAD
HEADLINE annual inflation held
steady at 3.1 per cent in August as
sharp rises in the cost of air fares,
clothing and food prices offset softer
petrol prices, official figures revealed
yesterday.
The Office for National Statistics
(ONS) said that inflation rose 0.5 per
cent between July and August but
that the annual rate remained the
same, surprising economists who had
expected a fall to 2.9 per cent.
Food price inflation, which rose to
3.9 per cent from three per cent in
July had been expected to drive up
CPI in August. But sharp rises in cloth-
ing and footwear – which saw the
largest monthly rise for a July to
August period since 2001 – and a
surge in air fares of 16.1 per cent also
surprised analysts.
CPI inflation has persistently been
higher than expected and has been
running consistently well above the
State workers earning £7k more
than those in the private sector
▲
UK ECONOMY
PUBLIC sector workers are paid an
average of £7,000 a year more than
their private sector counterparts once
pension contributions are taken into
account, according to the Office for
National Statistics (ONS).
The ONS September Economic &
Labour Market Review found state
employees earn an average of £615 a
week, including pension provision,
CITYA.M. 15 SEPTEMBER 2010
Source: ONS
Clothing & footwear
-0.02 0.09
Health
-0.03 0
Recreation & culture
-0.02 0
Miscellaneous goods & services
0.03
Monetary Policy Committee’s target
throughout 2010. But the majority of
analysts do not expect monetary
tightening any time soon: “A scenario
where the MPC simply loses patience
with inflation and sanctions a hike in
interest rates seems improbable.
However sticky inflation does suggest
that the chances of further QE are
waning,” said Investec’s Philip Shaw.
The annual retail prices index (RPI)
rose by 4.7 per cent, down from 4.8
per cent in July. The RPIX, which
strips out mortgage interest pay-
ments, also eased to 4.7 per cent.
Martin Weale, the newest member
of the Bank of England’s (MPC), said
he had been surprised by the strength
of inflation. But he added he was
comfortable with forecasts published
by the central bank in August which
showed inflation falling back to tar-
get in the medium term. “The evi-
dence I’ve seen doesn’t suggest that
inflation expectations have been de-
anchored,” Weale told the Treasury
Select Committee.
compared with an average of £479 a
week in the state sector. This equates
to an average of £31,980 a year for
public sector workers, compared to
£24,908 in the private sector.
The ONS figures reveal average pay
is lower for private sector workers,
even before pensions are taken into
account. Average public sector pay is
£539 a week before pensions, while
the average for those in the private
sector is £465.
 8 News CITYA.M. 15 SEPTEMBER 2010

A law of unintended consequences

haunts those who rewrite the rules
American over-regulation has helped London, but some of the City’s best friends. Their
generosity began with the introduc-
we must not return the favour, says Marc Sidwell tion of America’s Interest
Equalisation Tax in 1964 as a tempo-
rary measure – subsequently extend-
ed again and again. It was intended to
free their offshore dollars from the
onerous US controls. Capital outflows
continued, with London’s eurodollar
market the main beneficiary, while
the US capital market saw sales by
European and Japanese issuers
a major financial centre within 10
years.
Professor Niall Ferguson, author of
The Ascent of Money, told City A.M.
that history shows just how careful
regulators need to be. “Financial his-

W
HEN rival financial centres
rewrote their rulebooks to
their own disadvantage,
London pounced. If current
proposals are mishandled, the City’s
competitors will be more than ready
for the chance to steal back some of
the UK’s financial thunder.
In the last half-century, America’s
regulators have unwittingly been
reduce the balance of payments
deficit by taxing Americans for
acquiring foreign-issued stocks and
debt obligations. In practice, US
investors decided that they wanted to
decline from $326m in the first half
of 1963 to under $40m in 1964.
Subsequent tax changes were too late
to slow the development of the mar-
ket that had been created in London.
In 2002, American regulation once
again gave London an inadvertent
helping hand with Sarbanes-Oxley
(Sarb-Ox). Under pressure after the
Enron and WorldCom scandals,
politicians passed Sarb-Ox to enhance
US accounting standards. The
increased weight of compliance drove
companies elsewhere, and to London
in particular. Notably, the flourishing
of London’s Alternative Investment
Market has been linked to the fallout
from Sarb-Ox. In 2007, Senator
Charles Schumer and New York’s
Mayor Michael Bloomberg warned
that New York could lose its status as
tory is littered with the unintended
consequences of regulatory changes.
From the Interest Equalisation Act to
Sarb-Ox, New York has repeatedly suf-
fered setbacks because of mistakes
made in Washington. It is too early to
tell if Dodd-Frank will have similar
damaging effects. A lot will depend
on how uniformly Basel III is applied
and on what the EU and national gov-
ernments decide to do. If I had to
make a bet it would be that London
will end up being hurt more by new
European rules than New York is hurt
by the new American rules.”
London cannot rely on American
mistakes to keep it competitive. With
risks from new European regulations
in play, there is all the more reason
not to add to the danger by rushing
through changes at home.

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CITYA.M. 15 SEPTEMBER 2010 News 9

Chancellor
George Osborne’s
decision to dis-
mantle the tri-
Plans to reform the tripartite system
partite
regulatory sys-
tem is proving
controversial
have opened a new can of worms
Picture:REUTERS
as the two regulators that will police listings, while the CPMA will have

▲
POLITICS
BY DAVID CROW
WHEN George Osborne set about dis-
mantling the tripartite regulatory
system, he said the reforms would
help prevent another banking crisis.
But his decision to hand responsi-
bility for the UK listing authority
(UKLA) to the Financial Reporting
Council (FRC) could end up causing
even bigger problems.
The FRC is controlled by Vince
Cable’s business department, where-
the City – the Prudential Regulatory
Authority (PRA) and the Consumer
Protection and Markets Agency
(CPMA) – will be under the auspices of
the Bank of England and, ultimately,
the Treasury.
Critics of the government’s plans,
such as London Stock Exchange boss
Xavier Rolet, say the changes could
lead to failings in the regulatory sys-
tem.
If the reforms go ahead, the FRC
will have responsibility for primary
responsibility for secondary listings
and all other day-to-day oversight.
Important information could get lost
in the gap, say critics.
Rolet is also worried because the
CPMA is the only body that has a seat
on the new Brussels super-regulator,
the European Securities and Markets
Authority. But it will have no experi-
ence or knowledge of primary listings
in the UK, meaning it will struggle to
fight the UK’s corner when it comes
to this issue.

HOW THE NEW REGULATORY FRAMEWORK MIGHT LOOK

THE PROPOSED REGIME

>>>>
FRC l Companies Regulator :
stewardship by shareholders
l Primary Listings: debt securities audit issues regulation

City fears new UKLA >>>>

BANK OF ENGLAND
The new arrangements would see the
regulation of primary and secondary
listings separated – unlike anywhere

listing rules
l Settlements and clearing else in Europe.
Critics say this would be inefficient
Primary and secondary and may increase the chances of mar-
How CityA.M. listings debt securities CPMA ket abuse but some also fear that it
revealed the will lead to the UK having less influ-

>>>>
growing concerns ence in Europe.
on Monday REGULATION Insider Dealing l Secondary issues only There are also fears about the cre-
▲

European Securities and Mark

BY MATTHEW WEST ets
Authority (ESMA). Each Europ
member state is allocated a
ean l Exchanges ation of a new Companies Regulator
GOVERNMENT proposals to place
the
UK Listing Authority (UKLA) under
single
seat on the regulatory body, which Settlements and Clearing l Over the Counter which will sit within the FRC.
the control of th Fi will have responsibility for regul
i l ating
 10 News
Bank charges are customers’ biggest gripe
BRANDINDEX
STEPHAN SHAKESPEARE
A
T PRESENT – when consumer
confidence in financial institu-
tions is at its lowest ebb for
over 60 years – there is good
reason to reevaluate retail banks’ rela-
tionship with their customers at its
most fundamental level: the current
account.
The arrival of service-focused
Metrobank and Santander’s recent
cash incentive to switch providers
have sparked consumer attention on
the lowly current account.
What do customers really care
about? A new report for YouGov
SixthSense suggests that bank
charges are the foremost considera-
tion when consumers are looking for
a new account. This should come as
little surprise to many – the past
three years have seen the number of
current account related complaints
to the Financial Ombudsmen balloon
compared to the numbers in 2005 to
2007, with 25,252 complaints made in
2010.
Fifty-four per cent of YouGov
respondents agree that fines relating
to exceeding an overdraft are “legiti-
mate”, making it the most acceptable
form of bank charge. However, only
five per cent of consumers are willing
to tolerate monthly banking fees for
banking services like debit cards,
direct debits and standing orders.
The greatest acceptance of charges
for exceeding overdraft limits cur-
rently lies with those who are happi-
est with their banking service. It also
CITYA.M. 15 SEPTEMBER 2010
seems that consumer perception of One in five account holders report
banking institutions hinges greatly that they have read the documenta-
on the consumer’s understanding tion in the past but “can’t remember
and acceptance of certain bank it now”. Only one in four account
charges – an informed accountholder holders claim that they have read all
is a happy accountholder. the relevant documentation and
Yet 40 per cent of respondents say understand when and why charges
that they have not fully read their may arise. Educating customers may
account’s official documentation, but be the banks’ strongest weapon.
“broadly” know what they may be Stephan Shakespeare is founder and
charged, and in what circumstances; chief executive of YouGov. NEWS: P22
ANALYSIS l What do bank customers really care about?
60% 59%
56% 56%
51%
50%
43% 44%
Account is provided by well-known company
39%
40% 38%
33%
Basic level of banking serive provided
30%
Provider has a good reputation
The value for money offered
Branch network in my area
22%
Online banking serivice
Ease of understanding
for customers service
Level of interest rates
Level of bank charges
20%
Recommedation from
friends and/or family
the account’s details
10%
0%
CITYA.M. 15 SEPTEMBER 2010
Icap’s new system hits €10bn
FINANCIAL SERVICES
▲
BY VICTORIA BATES
INTER-DEALER broker Icap notched
up interest rate swap (IRS) trades with
a nominal value of over €10bn
(£8.36bn) in the first week of trading
on its electronic market.
The figure represented 15 per cent
of the total number of Euro IRS trades
passing through the firm’s order book
over the week, with 13 major banks
already signed up to the system, chief
executive Michael Spencer said.
“By using our technology banks are
Vodafone will
appeal Indian
tax decision
TELECOMS
▲
BY STEVE DINNEEN
VODAFONE has filed an appeal with
India’s Supreme Court after its peti-
tion over a tax feud with authorities
was dismissed.
The lower court ruled that the
Indian tax system has jurisdiction
over tax bills in cross-border mergers.
Vodafone, which is fighting a tax
bill in India from its 2007 purchase of
Hutchison Whampoa’s mobile busi-
ness in the country, filed an appeal
with the Bombay High Court in June
challenging the tax department’s
jurisdiction over the bill.
The court dismissed its petition but
said Indian tax authorities would not
issue a final order to Vodafone for the
next eight weeks, even though tax
proceedings would continue.
Vodafone was free to separately raise
with them the issue of its liability to
deduct tax on the transaction, it said.
After the court ruling, Vodafone
said that it would consider its next
steps, which included the option of
able to execute trades that they
would not previously have been able
to match,” he added. “We expect that
the volume of business will continue
to grow as more banks are connected
and more streaming prices are added
to the platform.”
Icap expects to have around 24
banks on board with the electronic
system before the end of the year.
It has developed the market in
response to calls from regulators to
improve transparency in the over-the-
counter (OTC) derivatives area in the
wake of the collapse of Lehman
an appeal to the Supreme Court.
Vodafone, which paid $11.1bn
(£7.18bn) for the deal with Hutchison,
has not said how much the authori-
ties were seeking but it is estimated at
around $2.6bn.
Indian tax authorities have said
Vodafone’s deal was liable for tax
because most of the assets were based
in India and, under Indian law, buy-
ers have to withhold capital gains tax
liabilities and pay them to the govern-
ment. Vodafone has earlier said
Indian law did not require it to
deduct tax and that capital gains tax
is usually paid by the seller.
ANALYSIS l Vodafone 160.00
p
160 15 Sep
155
150
145
140
23 Jun 13 Jul 2 Aug 20 Aug
Brothers.
In June, the US Congress passed its
marathon bill detailing reforms to
financial regulation, which included
tighter rules on trading derivatives,
including parking desks trading the
riskier types of instruments into sub-
sidies with their own pools of capital.
The EU is also lobbying for stricter
regulation of the derivatives market,
arguing that more instruments
should be cleared through central
clearing houses to guarantee counter-
party payment in the event of a
future bank failure.
EURO DISNEY EXPANDS IN FRANCE
THEME park operator Euro Disney has won permission to build a third theme park, a
new housing development and a holiday village in France. The company has negotiated
with the French government to alter its founding agreement and extend its perimeter.
Euro Disney is 47 per cent owned by the Walt Disney Company and has recently strug-
10 Sep gled financially after attendance figures dropped.
Digital investment pays dividends
ICAP’s decision to invest $250m in
new technology last year is going to
pay dividends. Having attracted over
€10bn worth of interest rate swaps
(IRS) to its new electronic platform
during its first week of operation, it
is now reaping the rewards. Big
investment banks like Citi, BarCap,
Deutsche Bank and JP Morgan are
market makers on the new system,
and are clearly trading with gusto.
They will be hoping that the deci-
sion to move IRS on to an electronic
platform will satisfy regulatory
demands for greater transparency in
the over-the-counter (OTC) deriva-
tives market; until now, the IRS mar-
Picture: GETTY
News 11
ket has been controlled by dealers
who did not disclose prices publicly.
The advantages of electronic trad-
ing go much deeper. Banks are able
to execute more complex trades
than they could over the phone,
such as a series of different trades
simultaneously. The possibilities for
ICAP are obvious. IRS account for
almost three quarters of the OTC
market, with euro IRS worth some
$4 trillion. Phone broking is dead,
long live electronic platforms.
BOTTOMLINE
Analysis by David Crow
BoA Merrill to
rejig European
finance team
▲
BANKING
BANK of America Merrill Lynch yester-
day unveiled changes in its team cov-
ering Europe’s financial firms,
following similar announcements
from two other banks ahead of an
expected increase in equity raisings
and deals.
Bank of America Merrill Lynch
hired four financial institutions
group (FIG) bankers and said it was
rejigging its Europe, Middle East and
Africa coverage model to match
arrangements in the United States
and Asia.
New capital rules agreed by regula-
tors on Sunday are expected to
prompt banks in Europe to raise bil-
lions of euros in equity, or encourage
stronger banks to seek acquisitions,
analysts have said.
That could increase the fight for
FIG business, and earlier yesterday US
investment bank Keefe, Bruyette &
Woods (KBW) said it had hired six FIG
bankers in London, while France’s
BNP Paribas announced a shake-up of
its operation.
Bank of America Merrill Lynch said
Mike Coppock, formerly of HSBC, and
Richard Saden, formerly of Natixis,
would join as managing directors this
month alongside ex-Citigroup banker
Georg Musil. Gareth Braithwaite is
due to join as a managing director in
October from RBS.
 The Capitalist
SPREADBETTING BOSS
IN A PRODIGIOUS MOVE
IF THERE’S been a whiff of celebrity
recently about the walk of Simon
Denham, the ebullient head of
spreadbetter Capital Spreads, The
Capitalist knows why.
For the past year or so, Denham
has been in the process of buying his
new house – a sprawling country pile
in Great Dunmow, Essex – from none
other than Prodigy frontman Liam
Howlett.
And as you’d expect from a hard-
core rocker like Howlett, the house
itself was somewhat, let’s say, unusu-
al. The gates had a row of skulls lined
up along them; the staircase was sup-
ported by skeletons, and the swim-
ming pool was tiled entirely in black,
the colour of most of the walls in the
house. And that’s without even tak-
ing into consideration the decorative
figures in the garden – a black Dalek
from Dr Who and a movie skeleton
which once sprang out to attack
Jason and the Argonauts when they
planted dragon’s teeth in the ground.
Tasteful.
I hear the revamp is already well
underway, with the personal music
studio – decorated in black, natch –
one of the first rooms to be gutted. “I
once tried to play the guitar but
couldn’t even tell when I’d tuned it
correctly,” Denham chuckles. “So I
didn’t think I’d be needing the studio
any time soon…”
SKIRTING THE ISSUE
An intriguing new take on the age-
old “hemline theory” of economic
Is the opposite of the “hemline index” true?
prosperity, courtesy of two boffins
from the Econometric Institute,
Marjolein van Baardwijk and Philip
Hans Franses.
The dedicated pair put the hemline
index – which states, of course, that
skirts become shorter and shorter as
the economy improves, while it drops
to the floor when times are
tough – to an empirical test,
collecting monthly data
from as early as 1921 (pre-
sumably from the back
issues of Vogue).
Their findings? The phe-
nomenon does hold true,
but including a time lag
of about three
years.
“It is not
today’s reces-
sion that dic-
tates the
hemline, but
perhaps the
boom [before-
hand],” they con-
clude.
A valiant attempt to
put smiles on faces in hard
times, perhaps?
EDITED BY 13
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
SNAP DECISION
A slightly unusual extra-curricular
achievement, courtesy of Scott Mead
– a founding partner of boutique
merchant bank Richmond Park
Partners and former partner and
chairman of telecom, media and Capital Spreads boss Simon Denham,
technology investment banking at above, has bought Prodigy frontman Liam
Goldman Sachs. Howlett’s Essex pad Pictures: GETTY
Tomorrow evening, Mead will be
hosting a private view of an exhibi-
tion of his own photography at the
Hamiltons gallery in Mayfair. Only
the photographs in question – which
“deploy a distinctive circular aesthet-
ic” – are over three decades old and
were recently discovered in Mead’s
attic.
They were originally taken in the
1970s, when he studied with
American photographers William
Eggleston and Emmet Gowin before
joining the world of finance.
Mead is selling prints and an
accompanying book to benefit Great
Ormond Street Hospital.
IN LOVING MEMORY
A memorial service will be held
tomorrow morning for Alan Ruddock,
the much-loved former Scotsman edi-
tor, City A.M. columnist and Sunday
Times and Irish Independent journal-
ist, who died earlier this year aged
just 49.
The service, which begins at
11.30am at St Bride’s Church on Fleet
Street, will include readings of
Ruddock’s work by Sunday Times edi-
tor John Witherow and Powerscourt
financial PR boss Rory Godson, as
well as addresses by journalist
Richard Beeston and former
Independent deputy editor Ian
Birrell, now a speechwriter for Prime
Minister David Cameron.
OCTOPUS OF CREDIT
An eagle-eyed reader has discovered
that last year’s famous reference to
Goldman Sachs as a “great vampire
squid wrapped around the face of
humanity” was not the first time a
bank has been given the cephalopod
treatment.
In fact, an earlier version of the
phrase was originally coined by HG
Wells in 1933, in “The Shape of
Things to Come”.
“Another big obscure financial
force in the war and post-war periods
was the complex of great private
banking ganglia of which Morgan &
Co, with its associated firms, was the
most central and most typical,” wrote
Wells. “This particular firm carried
on its business upon a scale that com-
pletely overshadowed many minor
governments. The loans it made or
refused, confirmed or shattered
regimes. Its founder, JP
Morgan...was never dishon-
est and always disin-
genuous. That was
the rule of his game.
Opaque pockets
he insisted
upon, and hid-
den motives,
but also the
punctual per-
formance of
a bargain. His
tradition lived
after him. His
firm became an
octopus of credit...”
Prescient indeed.
 14 News
Google takes
on Facebook
at networking
▲
TECHNOLOGY
BY HARRY BANKS
GOOGLE plans to gradually introduce
social-networking features to its sites
starting this fall, as the Web search
giant seeks to compete against rapid-
ly growing Facebook.
Chief executive Eric Schmidt said
yesterday that the Internet search
leader intends to gradually work in
“layers” of social networking, rather
than unveil a flashy new product in
one go, but also said he intends to sus-
tain Google’s pace of acquisitions.
Google has struggled to find the
right touch in creating the types of
social networking services that have
become increasingly popular online
activities for consumers.
It pulled the plug on Google Wave,
a high-profile social networking prod-
uct launched last year. Media reports
have said it is developing a new social
networking product dubbed Google
ME in a bid to challenge Facebook,
which has more than half a billion
users worldwide.
The company this year has under-
taken a series of small to mid-sized
purchases, including a $182m deal to
take over social networking firm
Slide, and a $700m offer for airline
ticketing firm ITA Software.
Schmidt expects that last deal to
win regulatory approval. He said the
level of scrutiny it has drawn was sim-
ilar to that for previous acquisition of
Admob, which won a green light.
Schmidt was speaking on the side-
lines of its Google Zeitgeist event
grouping industry executives and the
media.
ANALYSIS l Google
$ 480.48
500 15 Sep
480
460
440
23 Jun 14 Jul 3 Aug 23 Aug
Former owner Andrew Brownsword has kept a significant stake
Snow+Rock set to expand
after management buyout
RETAIL
▲
BY JENNY FORSYTH
OUTDOORS specialist Snow+Rock
Sports has been bought by its man-
agement, backed by private equity
firm LGV capital, for an undisclosed
sum.
The management, led by managing
director Dion Taylor, have put their
own money into the retail chain,
which has 35 stores and three com-
mercial websites.
Picture: GETTY
Taylor said: “Andrew Brownsword
and Jeremy Hancock helped us to
grow the group to its current mar-
ketleading position, but now it is
time for the management to become
stakeholders in the business and to
continue to drive it forward.”
As well as Snow+Rock, the brand
includes Cycle Surgery and Runners
Need.
The group’s previous owner
Andrew Brownsword will retain a
“significant” investment in it.
CITYA.M. 15 SEPTEMBER 2010
Rio Tinto plans
to expand its
diamond mine
MINING
▲
LONDON-listed miner Rio Tinto
announced plans to expand its Argyle
diamond mine in Western Australia
yesterday, the latest step in its plan to
spend about $13bn (£8.4bn) through
the end of 2011 to boost growth.
Rio Tinto said it plans to invest
$803m to develop an underground
mine under the existing open pit,
ramping up production from 2011 to
reach 9m tonnes of diamond-bearing
ore a year within two years.
The project, put on hold in 2009 due
to the global financial crisis, will
expand the life of the world’s largest
mine for pink diamonds to at least
2019 as the company looks to capture
burgeoning demand.
“A significant supply gap is expected
to emerge in the medium to long term
and the outlook for demand is strong,
driven by the growth of emerging mar-
kets,” Rio Tinto diamonds and miner-
als chief executive Harry
Kenyon-Slaney said in a statement.
The Argyle investment follows Rio
Tinto ‘s approval in August of a $1.6bn
expansion at its Hope Downs iron ore
project in Western Australia, with the
company back on a growth path after
slashing a crippling $40bn debt pile.
Diamonds contributed $75m to Rio
Tinto’s group earnings at its latest
interim results.
 EN SEATS. 16 Consumer News

SEV
ENS OF
DOZ E S .
T UR
F%EAAPR TYPICAL.
0 SuperGroup under Julian Dunkerton has seen sales fuelled by the youth market.
DODGE JOURNEY RANGE
FROM JUST £16,995*
ìVHDWVì/HDWKHUWULPPHGLQWHULRU ‡
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XSWRPSJFRPELQHGF\FOH
SuperGroup
in sales boost
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47 Monthly payments**
On the road price (Includes £1,000 saving)
Customer deposit
Dodge deposit contribution
Balance
▲
RETAIL fashion brands such as French
£199.00 Optional final payment (Includes £295 fee) £4,906.00 BY JOHN DUNNE Connection, would sustain its growth
because it was hitting a gap in the mar-
£19,595.00 Total amount payable by customer £18,295.00 SuperGroup – the British company ket for quality, value for money, brand-
£4,331.00 Mileage per annum 10,000 behind the Superdry fashion brand – ed clothing that is not reliant on one
yesterday reported soaring sales after a product or one logo.
£1,300.00 Excess mileage charge 12p per mile
highly successful flotation. SuperGroup opened five shops in the
£13,964.00 Total sales leapt 59.8 per cent to period, including one at Lakeside
0% APR Typical £32.8m in the three months to 1 Thurrock, which Dunkerton said was
August as its trademark hoodies and the company’s most successful opening
checked shirts continued to fly off the this year.

For more information

shelves.
The company’s shares closed 3.7 per
visit dodge.co.uk cent lower at 1,107p after the figures
were announced but analysts put that
The firm said it was eyeing more
international openings to keep its
expansion plans on track. Its first fran-
chise store in the Middle East will be in

or call 0808 156 6609

down to some investors selling shares Dubai.
to pocket profit. The share price has
doubled since the IPO in March. ANALYSIS l Supergroup
SuperGroup’s wholesale business p 1,107.00
1100 15 Sep
generated revenues of £10.5m from
FUEL CONSUMPTION FIGURES FOR JOURNEY 2.0 CRD SE MANUAL IN MPG (L/100 KM): operations in the UK and 33 countries
1000
URBAN 34.4 (8.2), EXTRA URBAN 55.4 (5.1), COMBINED 44.8 (6.3). CO2 EMISSIONS 165 G/KM overseas.
Car shown is a Journey 2.0 CRD SXT Manual £19,595 OTR. *Range pricing of £16,995 refers to Journey 2.4 SE Manual, Founder and chief executive Julian
900
including Vehicle Excise Duty (VED), first registration fee and VAT. Model shown features optional metallic paint at an additional Dunkerton said: “I see no reason to
£450 including VAT. †Excluding SE models. ‡RT models only. Prices and specifications correct at time of going to press (09/10). believe that we will not continue grow- 800
**Promotion available on new Dodge Journey models registered between 7th and 30th September 2010 at ing in the nature that we have been
participating dealers. Further charges may be made subject to the condition of the vehicle, if the vehicle is returned growing. Young people have to look 700
at the end of the finance agreement. Finance subject to status. Guarantees/Indemnities may be required. good.”
Chrysler Group Financial Services, PO BOX 108, Leeds LS27 0WU. Dodge is a registered trademark of Chrysler Group LLC. 2 Jul 22 Jul 11 Aug 1 Sep
He claimed that SuperGroup, unlike

%HOLHYHLQEHWWHU

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-RLQLQWKHILJKWWRKHOSVDYHDELOOLRQWUHHVDWVN\FRPUDLQIRUHVWUHVFXH
CITYA.M. 15 SEPTEMBER 2010
Debenhams is
bullish as tips
profit up 20pc
▲
RETAIL
BY JOHN DUNNE
DEBENHAMS yesterday said that its
pre-tax profit for the year would rise
20 per cent – thanks to rising online
sales and the performance of its
designer ranges.
The company suggested profit
would hit £150m as its discounting
and store expansion helped to fuel
figures £3m above analysts’ forecasts.
However, sales at stores open at
least a year were flat compared with
the previous 12-month period.
The upbeat estimates, which cover
the year to 28 August, come in an
unsteady consumer environment
with a VAT hike on the horizon, a
massive jobs cull in the public sector
looming and rising prices of materi-
als including cotton.
Debenhams deputy chief executive
Michael Sharp said that despite a
“challenging” situation the store was
well placed to ride out the storm.
“The VAT rise is obviously an issue
for retailers. But we are doing well by
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offering the right products at the
right price for our customers.
“Online sales have been very impor-
tant for us.
‘That’s the way many customers
want to buy these days.”
Debenhams is the UK’s second
largest retailer behind John Lewis for
sales, with 160 stores in Britain and
Ireland, six in Denmark and 60 fran-
chised outlets overseas.
The company was also on track to
make a profit at its recently acquired
Danish chain, Magasin du Nord.
Sharp said the company saw a sales
lift from a recent round of price slash-
ing which saw up to 25 per cent
knocked off the price of some ranges
and he would not rule out more
offers.
He added: “We are always looking
to offer the best value to our cus-
tomers.”
The company said its Designers at
Debenhams range was performing
particularly well with profit margins
improving over the period.
Homeware has also improved, it said.
Consumer News 17
PREDICTS
pre-tax profit will
rise 20 per cent for
the full-year
Like-for-like
sales are flat on
Debenhams has
raised its fore-
last year
Expects £150m
in profit for the
year to 28 August
casts.
Picture: Micha
Theiner/City A.M.
ANALYST VIEWS: IS DEBENHAMS’ FORECAST REALISTIC? Interviews by John Dunne
CAROLINE GULLIVER| KEITH BOWMAN|
“ “
EXECUTION NOBLE HARGREAVES LANSDOWN
Debenhams’ guidance for the full-year The group’s emergence from the critical
looks as though profits, margins and debt levels list continues. A focus on profit margins as
are encouraging. Debenhams is the cheapest opposed to sales remains central to strategy,
retailer in the sector, and we think the valuation with the willingness of its banks to refinance a
does not give sufficient credit to the 20 per cent previously stretched financial position providing
” ”
profit growth that will be achieved this further momentum via reduced financing
year, or the continuing opportunity for costs. Market consensus opinion continues
gross margin improvements. to denote a ‘strong buy’.”
MATTHEW MCEACHRAN| SINGER CAPITAL MARKETS
“
Debenhams has issued a confident pre-close update The business looks well placed to continue implementing its
”
differentiated strategy and international earnings are increasing in the mix. It seems likely that the shares will respond well
to the update.
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ipadcomp@hamptons-int.com
7RFHOHEUDWHEHFRPLQJWKHILUVW8. or visit www.hamptons.co.uk/ipad
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WRZLQZRUWKRI$SSOHYRXFKHUV
 18 News
Ashmore sees
a 36 per cent
hike in profits
▲
FINANCIAL SERVICES
BY STEVE DINNEEN
EMERGING markets fund manager
Ashmore smashed forecasts with an
astonishing 36 per cent rise in full-
year profit.
It was boosted by a sharp increase
in investor appetite for its core debt
products. The British-based specialist
manager reported a pre-tax profit of
£217m for the year to June, compared
with a forecast for £196m.
Performance fees were up 58 per
cent to £82.9m, and total net rev-
enues were up 41 per cent to £286m.
Graeme Dell, group finance direc-
tor, told City A.M.: “Revenue has been
the driving force but we maintain a
very strong operating margin which
has dropped through to make for
some very positive results.
“Performance fees for this year
have started strongly and we have rev-
enue growth on management fees.”
Dell said local currency products
were attractive to emerging market
institutions as a hedge against the
long-term structural decline in the
US dollar. Emerging market central
banks have large US dollar reserves.
As a result of this appetite for
Ashmore’s specialist products, net
inflows reached $7.6bn (£4.3bn), with
assets under management at $35.3bn
at the end of June.
Ashmore shares have risen 12 per
cent in the last three weeks. It trades
at a premium to peers, but analysts at
Arden said this is warranted due to its
continued high margin and strong
net inflows.
Execution Noble analysts said:
“Given its market leading position in
an asset class which is seeing both
long-term and short-term structural
drivers along with its best in class
investment performance, Ashmore
deserves to trade at a premium”.
Ashmore, which derives the bulk of
its assets from institutions, said that
it is now stepping up its targeting of
the global retail market. Further mar-
keting and distribution hires are
planned to support the roll-out of its
Luxembourg-domiciled retail-friendly
funds across the UK and Europe.
ANALYSIS l Ashmore Group
320 p
313.10
300 15 Sep
280
260
240
23 Jun 13 Jul 2 Aug 20 Aug
East Anglia services bring thousands of commuters into the City
National Express granted
extension for East Anglia
TRANSPORT
▲
BY ALASDAIR PEOPLES
THE Department of Transport yester-
day granted National Express a 28-
week extension on its East Anglia rail
franchise.
East Anglia services run between
London’s Liverpool Street Station and
Eastern England destinations, includ-
ing Peterborough and Norwich.
It was announced by the Labour gov-
ernment in late 2009 that National
Express would have its seven year fran-
chise agreement terminated three
years early on 31 March 2011.
10 Sep This was seen as a punishment after
Picture: GETTY
the company defaulted on the £1.4bn
East Coast Main Line franchise in 2009.
National Express chief executive
Dean Finch said: “We are pleased to
have been given this initial extension
and to be able to continue to serve our
customers on the East Anglia fran-
chise.”
City analysts said the move could
represent a thawing of relations with
the government. The shares ticked up
a penny to close at 246.9p last night.
Speaking to City A.M., general secre-
tary of the Rail and Maritime
Transport Union (RMT) Bob Crow
called the extension agreement “out-
rageous”.
CITYA.M. 15 SEPTEMBER 2010
Crossrail, Tube
investment
worth £78bn
to UK economy
▲
TRANSPORT
BY VICTORIA BATES
INVESTMENT in Crossrail and Tube
upgrades are worth £78bn to the UK
economy, the London Assembly’s
transport and economic development
committees have argued in a letter to
chancellor George Osborne.
The committees urged Osborne to
protect Crossrail and Tube upgrade
work from the austerity cuts, warning
to do so would be a “false economy”
for London and the rest of the UK.
“These are major strategic trans-
port projects which are crucial to
delivering much needed improve-
ments to London’s transport system
and ensuring its long-term economic
prosperity,” they wrote. “In turn, they
have the potential to generate wider
benefits for the whole UK economy.”
Crossrail is expected to contribute
at least £36bn to national GDP over
the next 60 years, while the Assembly
committees said one estimate put the
potential government earnings from
the project at £22bn over 10 years
through extra tax take, increased
property levies and fare profits.
Passengers use the Tube for over a
billion journeys per year, they said,
meaning it is crucial to invest in the
network to ensure London remains
an attractive place to live and work.
Mayor of London Boris Johnson has
been vocal in his efforts to persuade
Prime Minister David Cameron of the
importance of maintaining invest-
ment in London’s transport.
CITYA.M. 15 SEPTEMBER 2010 News 19

Shore Capital eyes potential

Shore Capital
boss Graham
Shore announced
profits despite
challenging times

acquisitions after profit lift

of balance sheet losses in the same He added that tricky conditions

▲
BANKING
BY VICTORIA BATES
BOUTIQUE investment bank Shore
Capital yesterday said pre-tax profits
doubled over the first half, despite a
challenging period for the markets
that included the election uncertain-
ty and sovereign debt crisis in Europe.
Shore posted a pre-tax profit of
£4.73m for the six months to June,
boosted by comparison with £2.92m
period last year. Comparing the earn-
ings of the operating businesses, prof-
it dipped 11.7 per cent to £4.59m.
Managing director Graham Shore
warned that the tough market condi-
tions would continue for some time.
“The government has started to
make its moves on cutting the deficit,
which we wholly agree with, but it is
not going to make for an easy ride in
the short term,” he said.
would make life difficult for competi-
tors and that Shore was “keeping an
eye out” for acquisition opportunities.
Shore said its equity capital mar-
kets arm, where revenue was broadly
flat on last year, had been driven by a
strong performance from the market
making team, the second largest on
Aim. The fund management arm saw
funds under management drop
slightly to £1.28bn over the period.

Unite: Finance Future s ‡ Commodi t i e s ‡ Opt i ons

Stock s ‡ For e x ‡ Bonds ‡ Funds

jobs face axe

80
on over

Markets
Worldwide
▲

RECRUITMENT the financial services sector is already

BY EMMA SADOWSKI
OVER 100,000 jobs have been lost in
the financial services sector during
the last three years with continuing
fears by trade union Unite that a “sig-
nificant” number of jobs are still at
risk, despite reports from the UK’s
major recruiters that financial servic-
es personnel are high in demand.
Unite has warned over dangers that
a “significant number” of jobs could
be axed in the coming years. The
union’s comments come on the third
anniversary of the run on Northern
Rock and the start of the banking cri-
sis.
But the UK’s largest recruiters,
including Robert Walters, Michael
Page and Hays, remain confident that
CITY VIEWS: ARE YOU OPTIMISTIC ABOUT THE CITY
JOB MARKET? Interviews by Emma Sadowskiand Alasdair Peoples
beginning to replace lost headcount.
The white-collar recruiters have
linked a renewed boost in business to
an increasing demand for profession- from One Account
als by the financial services sector.
Unite argued that “little has been
done” to overhaul the regulatory
landscape of the financial services US Stocks* (all-in) UK Stocks and ETFs (all-in)
sector in order to prevent further cri-
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Bank of Scotland (RBS) have collective-
ly announced 38,300 job cuts since
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2008, said Unite. Spreads as low as ½ pip
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(minimum GBP 1.70 per order)

DANIEL BOTTERILL | SIPP Accounts Supported

SUSTAINABLE RESOURCE SOLUTIONS

“Things are on the up. It’s a lot busier around

the City just now. There seems to be more Successful traders and investors understand that
recruiting and a lot more opportunities to
invest capital. I definitely think that things are superior technology and low trading costs
on the up.”
hold the key to greater returns.

BEN VADGAMA | 1E

Interactive Brokers
“The City job market is very good because I
think the number of opportunities have
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ing the banks, need to start recruiting at
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“I think property management markets are Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Services Authority. FSA register
entry number 208159 - * $1.00 minimum on all orders, no extra ticket charge. No technology surcharges.
faring reasonably well. As for the banks, the [1] Commission is 0.1 to 0.2 basis points * trade value. USD 2.50 minimum commission on forex. [2] Stamp
current job market is not that great. Financial duty on UK stock, ETFs (purchases) and option exercises (UK=0.5%) is passed through to the customer. [3] Plus
exchange, regulatory and carrying fees. Options and Futures are not suitable for all investors. The amount
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 20 News CITYA.M. 15 SEPTEMBER 2010

City law firms

ECJ rejects upbeat about
in-house legal next 12 months

privilege plea
LEGAL

▲
THREE out of four law firms based in
London are upbeat about the next 12
months while regional counterparts
continue to remain cautious.
Annual figures assembled by
accountancy firm Smith &
▲

LEGAL
BY EMMA SADOWSKI
EUROPE’S legal community was dis-
appointed yesterday after the
The dispute itself stems from a
2003 raid on Akzo Nobel by EU offi-
cials, which took documents that the-
company argued were confidential
communications between employees
Williamson show that three quarters
of the firms polled with a head office
in London are “reasonably confident”
Lego has to share its snap-together brick design with other toymakers Picture: GETTY about the next year.
Sixty-eight per cent of firms located

Lego loses trademark

European Court of Justice (ECJ) and in-house council. in the South East felt confident about
refused to grant privilege protection Members from the legal and busi- the coming 12 months, while just
to in-house lawyers practising on the ness communities lashed out at yes- under half of the firms polled in the
continent. terday’s decision by the ECJ. rest of the UK remained upbeat.

challenge at top EU court

The ECJ handed down the judge-
ment yesterday morning after a
lengthy battle, which called into
question whether Europe’s in-house
lawyers should receive privilege
rights during investigations by com-
petition officials.
“The ECJ’s decision today repre-
sents a real missed opportunity to
modernise EU rules on legal privi-
lege,” said Dave Anderson, a lawyer
with Berwin Leighton Paisner.
“Companies need to be able to con-
fer frankly and confidentially with
▲
Overall, however, sector wide confi-
dence has returned to 2006 and 2007
levels with 63 per cent of the UK’s top
100 firms are not worried about the
next year.
“As the financial services industry
LEGAL General Court, which dismissed centred around London rebounds

The legal privilege rule protects any
communication between a lawyer
and a client, making it confidential
and out of reach from third parties.
In-house lawyers working in the UK
and US currently receive protection
from the legal privilege rule.
But companies in Europe will have
to be cautious when corresponding
with in-house legal teams as any com-
munication can be confiscated and
used during a probe.
their in-house lawyers on antitrust
matters. The current rules, confirmed
today by the ECJ’s decision, hinder
that severely by making such internal
communications vulnerable to dis-
covery in EU antitrust dawn raids,”
said Anderson.
Matthew Fell, CBI director for com-
petitive markets, said: “We are very
disappointed that the court has not
taken the opportunity to bring the
case law up to date.”
BY HARRY BANKS
DANISH toymaker Lego has lost a
court battle to have its snap-together
plastic bricks registered as an exclu-
sive trademark in the European
Union.
Lego argued that studs on top of
the bricks made them highly distinc-
tive and, thus, eligible for trademark
rights. The European Union Court of
Justice upheld a 2008 ruling by the
Lego’s challenge to the decision by
trademark agency OHIM.
In 2004, OHIM repealed an earlier
decision to grant trademark rights for
Lego bricks after objections from
Canadian toymaker Mega Brands.
Peter Kjaer, head of Lego’s intellec-
tual property section, said. “It is natu-
rally a matter of concern to us that
use of the brick by others can dilute
the trademark. But the worst aspect is
that consumers will be misled.”
from the recession, it appears that
those law firms based in the capital
are the most positive about the
future, whereas, regional firms are
more concerned about the wider
economy,” said Giles Murphy, head of
professional practices group at Smith
& Williamson.
This is the 16th year that the
accountancy and professional servic-
es firm has conducted the legal confi-
dence survey.

LET’S
LET
T’S TA
TTALK
A
ALLK FOREEX
Join Allister Heath, editor of City AM as he welcomes Boris Schlossberg,
Director of Currency Research at GFT for an ‘all-things-forex’ seminar.

Thursday, 23 September | 8:00 am – 10:00 am | The Grange Hotel, St Paul’s Register online
at gftuk.com/cityam
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CITYA.M. 15 SEPTEMBER 2010 Telecoms and Media News 21

TalkTalk slams piracy charges CWW secures an £82m

INTERNET bar persistant offenders. law.
government contract win
▲

BY STEVE DINNEEN Now BIS says the costs will be split “Far from encouraging a more dig-
between copyright holders, who will itally inclusive nation, these meas-
TALKTALK has slammed government pay 75 per cent, and ISPs who will be ures will simply alienate web users. five per cent of CWW’s total UK pub-

proposals to charge Internet Service
Providers (ISPs) for its strategy to com-
bat internet piracy.
The firm argues plans laid out by
the Department for Business,
Innovation and Skills (BIS) will cost
internet users.
The Digital Economy Act (DEA)
forces ISPs such as TalkTalk to send
notices to users suspected of illegally
downloading copyright material and
liable for the rest.
Andrew Heaney, TalkTalk’s director
of regulation, said: “It is absolutely
outrageous that ISPs and broadband
customers will be forced to pay for
the costs of the music and film indus-
tries to enforce their own copyright.
“The DEA means many innocent
customers will be falsely accused of
filesharing and put on an ‘offenders
register’ though they have broken no
Moreover, they don’t tackle the root
cause of the problem – the creative
industry’s failure to adapt its busi-
ness model to the 21st century.”
The DEA attracted fierce criticism
before it was passed into law during
“wash-up”, the period between parlia-
ment being dissolved and a new gov-
ernment being formed. A major point
of contention is that the onus is on
internet users to prove their innocence.
▲
TELECOMS
CABLE & Wireless Worldwide (CWW)
yesterday announced an £82m, five
year contract to supply a telecoms
network for the Foreign and
Commonwealth Office (FCO).
The firm hopes the deal will act as
a jumping block for other govern-
ment departments to separately con-
tract to user the network.
The contract represents around
lic sector income and has been seen
as a positive sign for the firm, which
has been hit by the drop in govern-
ment tenders.
The deal will save the FCO an esti-
mated £90m over the course of the
contract.
Jerry Dellis, an analyst with
Jefferies International, said the deal
suggests CWW has scope to grow in
the public contract sphere.

India hopes to
BT accused of SIR MICHAEL LYONS TO QUIT BBC

end BlackBerry
creating two ban debate

tier internet
TELECOMS

▲
INDIA hopes its concerns about secu-
rity issues related to BlackBerry serv-
ices will be resolved within weeks, the
telecoms minister said yesterday.
The expected deal will give the gov-
ernment access to electronic mes-
INTERNET neutrality. It is an issue that needs to sages it fears could be used by
▲

BY STEVE DINNEEN be looked at carefully.” terrorists.

A NEW BT service that will allow it to
charge ISPs higher prices for better
quality services has led to accusations
it is creating a “two tiered internet”.
BT’s Content Connect effectively
creates an online space separate from
the regular internet which ISPs can
stream video without sapping band-
width from regular users.
The telecoms giant will charge
ISPs different prices depending on
the quality they require for particu-
lar services, in theory allowing
them to better structure their
broadband offering to ensure quali-
ty and speed.
However, there are fears the move
could contribute to a “tiered” inter-
net, in which smaller content
providers and ISPs are squeezed out
by firms which are able to pay for the
fastest services.
Toby Syfret, analyst with Enders
Analysis, told City A.M.: “The fear is
this would upset the principles of net
One industry source said the serv-
ice “flies in the face of net neutrality”
and could lead to “less mainstream
content falling through the cracks as
big players pay for faster speeds”.
BT’s managing director of products
Cameron Rejali denied the service
would create a two tier internet, say-
ing it is simply a more effective way
for ISPs to manage traffic.
He said “We are not saying people
can’t access content unless it is paid
for. You can go out and get the same
content from multiple locations. But
some ISPs want to pay to ensure a
quality service.
“I disagree that this raises a net
neutrality question. It will actually be
significantly cheaper for ISPs so we do
not think smaller service providers
will be hurt by this.”
The system, developed by Cisco, is
expected to be utilised heavily by
Project Canvas, the TV on demand
system of which BT is a founding
member.
India had threatened to shut off
BlackBerry-maker RIM’s encrypted
email and instant messaging services
unless it gained access to them.
After a deal with RIM, India began
accessing earlier this month some of
the traffic carried on BlackBerry
smartphone devices in a campaign
driven by fears that unmonitored
email and messaging puts the coun-
try’s security at risk.
“I do hope it will be resolved,” tele-
coms minister Andimuthu Raja said
yesterday.
India’s interior ministry said last
month RIM had offered several ways
to allow authorities to monitor
BlackBerry communications. The gov-
ernment said it would check their fea-
sibility over the next 60 days.
However, RIM has insisted it cannot
SIR MICHAEL Lyons will step down as BBC Trust chairman next year. He wrote to cul- decode the encrypted corporate email
ture secretary Jeremy Hunt saying he does not intend to remain in the post and will that is at the heart of its business and
leave when his four-year term ends in May. He said: “I am proud of what we have is yet to confirm India’s claims that
achieved in safeguarding the BBC’s independence against significant challenge... We security agencies have started access-
have taken openness and transparency to a new level.” Picture: REX ing BlackBerry traffic.

Roast New Season Grouse

with a glass of
Justerini & Brooks Red Burgundy
Game dish of
the year
Restaurant
Magazine 2008
£27.50
Boisdale of Bishopsgate The Lamb at Hindon
Reservations on 020 7283 1763 Reservations on 01747 820 573
Boisdale of Belgravia Subject to availability from
Reservations on 020 7730 6922 17th August until 30th September
22 News
NUMBER OF COMPLAINTS MADE TO FINANCIAL OMBUDSMAN
12,750
7,991
6,211
4,881 UK banks have given customers plenty of cause for complaint Picture: REX
3,286 2,810 2,250
National Australia
London scraps bid for Axa
Night Hike
Friday 17 September 2010 BANKING
▲
BY MATTHEW WEST
NATIONAL Australia Bank (NAB)
scrapped its £7.95bn (A$13.3bn) bid
for Axa Asia Pacific Holdings yester-
day, which would have seen it buy
the Australian and New Zealand
branches of the wealth manage-
ment firm.
The move came after the
Australian Competition and
Consumer Commission blocked
the deal for a second time last
week.
“Continuing with this agree-
ment is not in the best interests of
shareholders,” National Australia
Bank chief executive, Cameron
See London in Clyne said in a statement.
But National Australia Bank
a different
light...
How far will you go to
change the lives of people
affected by cancer?
ING and RBS agree debt deal for
Walk 10 or 20 miles
through late night London.
With exclusive access
Singapore petrochemical project
to iconic buildings.
▲
BANKING
ING and Royal Bank of Scotland
have launched a much delayed
www.maggiescentres.org/nighthike £1bn debt restructuring deal to
help fund construction of
Register today or call 0300 123 1801 Singapore’s Jurong Aromatic
Corporation’s (JAC) petrochemicals
project.
The project is now expected to
commence operations in 2014 with
construction beginning next year.
Talks over financing started last
Maggie Keswick Jencks Cancer Caring Centres Trust
(Maggie’s) is a registered charity, No. SC024414 A partnership between Maggie’s and Open City year but progress was delayed by
poor market conditions.
Some $1.24bn (£796m) – or 80
Lloyds Group tops
ombudsman’s list
for most complaints
BANKING
▲
BY MATTHEW WEST
LLOYDS Banking Group topped the list
of financial services companies that
consumers have registered complaints
with the Financial Ombudsman
Service (FOS) about in the last six
months, its latest figures revealed yes-
terday.
Government-backed Lloyds TSB,
was the subject of some 12,750 com-
plaints during the six-month period.
That was almost 5,000 more than
Barclays Bank, which received 7,991
complaints, and twice as many as
Bank of Scotland, with 6,211 com-
plaints. Meanwhile, another of the
government-backed banks, Royal
Bank of Scotland (RBS) – which owns
NatWest – received a total of 5,060
complaints during the period with
NatWest receiving 2,810 complaints
“remains very committed to partic-
ipating in the wealth-management
industry, which is an important
part of the bank’s future,” he
added.
Clyne’s decision not to challenge
the verdict, or even seek a compro-
mise, puts National Australia Bank’s
rival bidder AMP, Australia’s second-
largest asset manager, in a position
to revive its offer of A$12.9bn. The
offer was initially rejected ten
months ago by Axa.
AMP said it was “considering its
position” as a result of National
Australia Bank pulling out of the
deal. One thing in AMP’s favour is
the fact that while its bid was reject-
ed by Axa Asia, a tie-up has already
been cleared by the regulator.
Axa Asia Pacific, a wealth manag-
per cent of the debt – will now be
financed or guaranteed by two
South Korean export agencies for a
period of up to 15.5 years.
In a statement Bruce Macfarlane,
head of the advisory team at joint
coordinating bank ING, said yester-
day: “The timing seems perfect
now with almost no other deals of
this size or quality expected in the
market this year.”
The $2.4bn project involves the
development of a condensate split-
ter and aromatics facility on off-
shore Jurong Island and will
produce 1.5m metric tons of aro-
CITYA.M. 15 SEPTEMBER 2010
and RBS receiving 2,250 complaints.
The Ombudsman received a total
of 84,212 new complaints during the
first six months of the year – a small
increase on the 82,136 cases received
in the second half of 2009. On aver-
age it upheld 44 per cent of com-
plaints in favour of consumers,
compared to 53 per cent in the sec-
ond half of 2009.
During the period 15,000 com-
plaints about unauthorised over-
draft charges were reviewed and
closed following the Supreme
Court’s unanimous ruling last year
that the fairness of unauthorised
overdraft charges could not be chal-
lenged on the basis of the “test case”
referred by the Office of Fair Trading
(OFT).
The latest data covers complaints
received by the FOS between 1
January and 30 June 2010.
er with A$78.4bn of assets, “remains
strategically attractive,” said AMP
spokesman Jane Anderson.
The deal’s failure is likely to be
met with relief by some of National
Australia Bank’s investors, who
thought that the deal was over-
priced.
ANALYSIS l National Australia Bank
A$
24 23.68
15 Sep
23
22
21
20
2 Jul 22 Jul 11 Aug 1 Sep
matics per year and 2.5m metric
tons of transport fuels per year, the
company said.
A JAC spokesman added: “We
expect a very favourable reception
from lenders given the long antici-
pation by the bank market of its
launch, the favourable recovery of
the financial markets and robust
economics of the project.”
Banks invited to join the lending
group are expected to pledge finan-
cial commitments of between
$75m to $150m by next month.
The loan is expected to be signed
by early December.
CITYA.M. 15 SEPTEMBER 2010
UK is mulling
its options for
a Green Bank
▲
BANKING
BY HARRY BANKS
BRITAIN has begun the process of set-
ting up its Green Investment Bank to
help fund the shift to a low-carbon
economy and could make it commer-
cially independent, the minister of
state for energy and climate change
said yesterday.
“We have begun the process of
establishing the Green Investment
Bank,” Gregory Barker told a CBI
event. “We are currently studying a
wide range of options. We are also
looking at the option of it being com-
mercially independent,” he added,
declining to give further details.
The government hopes the estab-
lishment of a “green bank” will help it
meet its 2020 goals to cut carbon
emissions and reduce the use of fossil
fuels. Three departments – the
Treasury, the Department for
Business Innovation and Skills and
the Department of Energy and
Climate Change – are working on
plans for the bank.
Barker would not comment on
when the bank would be formed but
said the government would publish
its proposals later in the year.
“We need to understand the impli-
cations of the Carbon Reduction
Commitment first,” he said, referring
to Britain’s new mandatory corporate
carbon trading scheme.
An independent report in June said
Britain may need up to £550bn of
investment through 2020 to fund the
shift to a low-carbon economy.
It said a “green bank” funded by
new consumer levies, the sale of emis-
sions permits to industry and new
investment products would help plug
the gap.
Climate change MP
Gregory Barker hopes
a “green bank” will
help the UK reach its
carbon cutting goals.
News 23
Full flights for
BEST OF THE BROKERS
ANALYSIS l Home retail group
245 p
212.40
HOME RETAIL GROUP
Nomura has downgraded its rating on Gatwick despite
240 Home Retail Group to “reduce”, citing its
235
230
15 Sep
Argos business. The broker says Argos’
product and demographic problems out-
drop in traffic
225 weigh its core competitive advantage. The
220 Argos business model is not broken but
AVIATION
▲
215 falling margins, low growth and a lack of
210
product emphasis, in the broker’s view, DESPITE an overall drop in passenger
limit the attractiveness of the stock. numbers during August, flights leav-
14 Jun 2 Jul 22 Jul 11 Aug 1 Sep ing Gatwick Airport were close to full
after almost 90 per cent of available
ANALYSIS l Novartis NOVARTIS seats were taken.
CHF 55.75 The latest traffic figures from
14 Sep More cash and less equity seems in the
Gatwick show that on average 87 per
55 interest of Novartis’ shareholders, says JP
cent of available seats on flights leav-
54
Morgan Cazenove, which reiterates an ing from the airport were full, mark-
“overweight” rating on the pharmaceutical ing a record high for the airport.
53 giant. The broker says more cash should Similarly, long haul flights depart-
give Novartis management some flexibility ing from the Crawley based air hub
52 reported that nearly 90 per cent of
to increase its offer for Alcon minorities available seats were taken.
51 and views a merger agreement as a posi- Traffic to long haul destinations,
tive trigger for Novartis’ shares. excluding the North Atlantic, contin-
21 Jun 12 Jul 2 Aug 23 Aug ued a year on year growth trend after
increasing by 11.3 per cent during
ANALYSIS l Tullow oil TULLOW OIL August.
1,270.00 However, this comes despite a mod-
1,350 p
14 Sep Citigroup says confirmation of Owo as a est fall in the number of passengers
1,300 major new oil field is a clear positive for using Gatwick for their travels.
Tullow Oil. The broker gives it a “buy” rat- During August, 3.6m people flew
1,200 ing but notes expectations were high ahead through the airport, marking a 1.3
per cent decrease on the same month
of the announcement. Citigroup believes in 2009, when 3.7m passengers chose
1,100 the issues surrounding Tullow’s Ugandan to fly out of Gatwick.
portfolio will be resolved in the near-term Likewise, Gatwick said that over
1,000 and views any associated weakness as an the last 12 months, it has seen a two
opportunity. per cent fall in the number of cus-
tomers travelling through its doors.
23 Jun 13 Jul 2 Aug 20 Aug 10 Sep
In the 12 months ending in August
To appear in Best of the Brokers email your research to notes@cityam.com 31.5m people used Gatwick compared
to 32.2m in 2009.
 24 News CITYA.M. 15 SEPTEMBER 2010

Nokia unveils NOKIA

CHAIRMAN

JORMA OLLILA

smartphones IT’S out with the old and in with the

new at Nokia. At the same time as
unveiling three new smartphones to

to rival Apple join its flagship N8 model, the

Finnish company revealed chairman
Jorma Ollila, the man credited with
making Nokia the world’s largest
handset maker, will step down in
2012. Ollila's planned departure fol-
lows the exits in recent days of chief
TELECOMS “Today our fightback to smartphone executive Olli-Pekka Kallasvuo and
▲

BY HARRY BANKS
MOBILE phone maker Nokia yesterday
unveiled the smartphones its new
management team will be fighting
with, as it tries to win back market
share from Apple and Blackberry.
The world’s biggest phone maker,
Nokia is engaged in a major manage-
ment revamp, with the departures of
its chief executive and chairman
announced last week and its top inter-
nal candidate for the chief executive
post resigning on Monday after an out-
sider was chosen for the job.
Nokia still controls around 40 per
cent of the global smartphone market
volume, but has lost out to Apple and
Research in Motion’s Blackberry in the
fatter-margin market for the most
expensive cellphone models.
leadership shifts into high gear,”
Niklas Savander, head of Nokia mar-
kets unit, said at the London launch.
The new models – E7, C7 and a new
version of the C6 – all come with large
touchscreens and use the latest
Symbian software.
“The products are a clear improve-
ment... but we know they are not
where Nokia needs to be yet, and any
other promise around ‘we are working
on it’ would have not convinced any-
one,” said Gartner analyst Carolina
Milanesi. “A new CEO and the old
guard stepping down might give
investors more confidence that things
are really changing.”
The phones will go on sale before
the end of the year at prices ranging
from €260-495, excluding subsidies
and taxes.
Anssi Vanjoki, the head of Nokia's
smartphone unit. Vanjoki, widely
seen as heir apparent to the chief
executive, quit following Nokia’s
decision to appoint Stephen Elop,
head of Microsoft’s business division,
as its chief executive last Friday.
Elop, who takes the reins on 21
September, will be the first non-Finn
to lead the company, and it’s clear
the company is seeking a new direc-
tion. As Nokia struggles to keep pace
with its rivals, especially Apple, in
the lucrative smartphone market, it
would have been difficult for Elop to
take the company in a new direction
with Ollila still at the top. Ollila, 60
years old, served as Nokia’s chief
executive for 14 years, stepping
down in 2006.
Anssi Vanjoki, head of Nokia’s smartphone unit, quit on Monday Picture: GETTY

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

assets, including asset-backed and London-based team focused on the

JP Morgan Asset Management
The bank’s asset management arm has poached
Nick Gartside from Schroders to join as inter-
national chief investment officer of fixed
income, effective from December.
Gartside joined Schroders in 2002 and was
most recently the firm’s head of global fixed
income. His responsibilities on Schroders’ ISF
strategic bond, ISF global bond and ISF global
inflation bond funds have passed to Bhupinder
Bahra and Frederick Bourgoin.
RBC Capital Markets strategy officer, a member of the exec-
The investment bank has hired Russell utive committee and a board member
King as a senior adviser in its global of subsidiary Anglo Platinum.
investment banking team. He also currently holds a non-execu-
King joins from miner Anglo tive directorship at temporary power
American, where he was the chief provider Aggreko.
EPIC Asset Management
The fund management arm of
Syndicate Asset Management has
taken on Nigel Marsh as a senior fund
manager.
Marsh was previously at New Star
Asset Management, now part of
Henderson, where he managed the
institutional fixed interest and liquidity
mandates since 2004. He has also held
roles at Pavilion Asset Management,
ABN Amro, NatWest Gilts and JP
Morgan Gilts.
Newedge Group
Haakon Blakstad has joined the multi-
asset broker’s strategic flows desk in
London, focusing on the secondary
market of non-vanilla fixed income
structured products.
He was previously at Hoare Capital
Markets, where he helped build the
asset-backed securities desk.
Old Mutual Asset Managers
The asset manager has hired fund man-
ager Christine Johnson and high yield
analyst Bastian Wagner to its fixed
income team.
Johnson joins from Halbis Capital
Management, part of HSBC, where she
was a senior fixed income fund manag-
er. Wagner formerly worked at Eaton
Vance Management International.
BTIG
The broker dealer has expanded its
global fixed income team to include a
emerging markets, led by Darren Reiss.
Reiss joins from Knight Libertas,
where he was a director on the institu-
tional fixed income sales desk. He is
joined at BTIG by Russell Scott,
Cornelia Colonius and Alpesh Lad. Scott
and Lad were previously at UBS, while
Colonius joins from HSBC.
Linklaters
The law firm has boosted its high yield
practice with the appointment of Mark
Hageman as a partner in London.
Hageman was formerly European
counsel at Cravath, Swaine and Moore,
advising on high yield deals, invest-
ment-grade debt offerings and equity
offerings, general US securities law and
corporate law matters.

+44 (0)20 7557 7245

To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT morganmckinley.com
 Markets&Investment 25

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .284.00 –1.70 310.00 246.90 Cookson . . . . . . . . . . . . . . . . . . .484.80 –8.50 616.00 347.60 Jardine Lloyd Thompson. . . . . . .594.50* +1.50 604.50 420.70 Sage . . . . . . . . . . . . . . . . . . . . . .254.00 –1.10 260.50 208.20
3i Infrastructure . . . . . . . . . . . . . 113.90 +0.10 115.00 96.05 Croda Intl . . . . . . . . . . . . . . . . .1431.00* +11.00 1445.00 637.00 Johnson Matthey . . . . . . . . . . .1758.00 +4.00 1814.00 1302.00 Sainsbury(J) . . . . . . . . . . . . . . . .379.80 –2.60 383.50 307.60
A.B. Foods . . . . . . . . . . . . . . . .1070.00 –2.00 1096.00 790.00 CSR . . . . . . . . . . . . . . . . . . . . . .350.00 –1.00 518.00 276.00 JPMorgan Emerg Mkts . . . . . . . .571.00 –2.00 576.50 417.80 Schroders . . . . . . . . . . . . . . . . .1426.00* –12.00 1450.00 1053.00
Aberdeen Asset Man . . . . . . . . . .147.40 –1.10 155.60 111.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .491.40 –6.60 539.00 381.00 Kazakhmys . . . . . . . . . . . . . . . .1363.00* +11.00 1634.00 955.00 Schroders N/V. . . . . . . . . . . . . . 1151.00* –10.00 1187.00 864.00
Admiral. . . . . . . . . . . . . . . . . . .1636.00 — 1653.00 1003.00 Dana Petroleum . . . . . . . . . . . .1787.00 +2.00 1817.00 968.50 Kesa Electricals . . . . . . . . . . . . .134.40 –0.30 162.00 98.45 Scot. & Sthrn Energy. . . . . . . . . 1179.00* +7.00 1206.00 357.50
Aegis . . . . . . . . . . . . . . . . . . . . .120.90* +0.20 137.30 103.10 Davis Service . . . . . . . . . . . . . . .404.70 +4.70 442.30 356.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . . 211.70 –1.60 255.00 196.50
Afren . . . . . . . . . . . . . . . . . . . . .103.70 — 111.00 68.00 De La Rue . . . . . . . . . . . . . . . . . .698.00 +3.50 1021.00 638.00 Ladbrokes . . . . . . . . . . . . . . . . .141.50* –1.70 174.29 114.60 Scottish Mortgage. . . . . . . . . . . .613.00 –0.50 623.50 471.00
African Barr Gold . . . . . . . . . . . .619.00* +10.50 685.00 520.50 Debenhams . . . . . . . . . . . . . . . . .67.20 +2.20 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .321.20* –8.40 338.90 153.00 SEGRO . . . . . . . . . . . . . . . . . . . .269.40* –0.20 403.10 244.00
Aggreko . . . . . . . . . . . . . . . . . .1540.00 +1.00 1639.00 664.50 Derwent London . . . . . . . . . . . .1522.00 –4.00 1540.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .551.00* –0.50 556.00 416.70 Serco . . . . . . . . . . . . . . . . . . . . .619.00* +5.50 656.50 479.00
Alliance Trust . . . . . . . . . . . . . . .331.50 — 352.70 292.80 Dexion Absolute . . . . . . . . . . . . .142.00 –1.00 148.00 124.60 Land Securities . . . . . . . . . . . . . .650.50 –4.50 743.50 543.00 Severn Trent . . . . . . . . . . . . . . .1394.00 — 1404.00 939.50
AMEC . . . . . . . . . . . . . . . . . . . . .944.00 +15.00 958.50 724.50 Diageo . . . . . . . . . . . . . . . . . . .1087.00* –6.00 1176.00 930.50 Legal & General . . . . . . . . . . . . .102.20* +1.70 105.00 69.05 Shaftesbury . . . . . . . . . . . . . . . .436.60 –3.40 446.60 341.70
Amlin . . . . . . . . . . . . . . . . . . . . .413.50* –3.50 437.60 350.80 Dimension Data . . . . . . . . . . . . . 119.40 +0.10 125.50 58.75 Lloyds Banking Gp . . . . . . . . . . . .77.14 –0.47 78.62 45.30 Shire. . . . . . . . . . . . . . . . . . . . .1508.00* –1.00 1526.00 999.00
Anglo American . . . . . . . . . . . .2572.00* –15.00 3015.50 1846.50 Dixons Retail . . . . . . . . . . . . . . . .24.94 +0.12 39.75 23.11 Logica . . . . . . . . . . . . . . . . . . . .124.70 +5.60 149.10 100.80 Smith & Nephew . . . . . . . . . . . . .564.50 +4.00 700.50 525.50
Antofagasta . . . . . . . . . . . . . . . 1151.00 –4.00 1159.00 699.50 Domino’s Pizza . . . . . . . . . . . . . .476.10 –1.60 480.90 253.10 London Stk Exchange . . . . . . . . .689.00 –11.00 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .149.40* –2.60 155.10 88.00
Aquarius Platinum . . . . . . . . . . .323.20* –5.80 490.00 211.50 Drax . . . . . . . . . . . . . . . . . . . . . .413.90 –1.70 496.50 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1700.00 –5.00 2198.00 1344.00 Smiths . . . . . . . . . . . . . . . . . . .1225.00 –5.00 1244.00 814.00
ARM Holdings . . . . . . . . . . . . . . .389.00* –16.00 416.40 132.70 Dunelm . . . . . . . . . . . . . . . . . . . .386.00 –8.20 438.40 276.00 Man . . . . . . . . . . . . . . . . . . . . . .231.90 –3.00 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .463.10 –4.80 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .314.00 –4.90 335.30 215.00 Easyjet . . . . . . . . . . . . . . . . . . . .387.40 –2.60 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .367.00 +2.30 412.70 321.90 Spectris . . . . . . . . . . . . . . . . . .1010.00 +11.00 1043.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3385.00* +15.50 3389.50 2668.00 Edinburgh Inv Tst . . . . . . . . . . . .431.00 –2.20 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .294.20* +1.20 331.00 218.60
Atkins(Ws) . . . . . . . . . . . . . . . . .719.00* +10.00 801.00 532.50 Electrocomponents . . . . . . . . . . .242.20 +0.10 246.30 142.90 Melrose . . . . . . . . . . . . . . . . . . .266.10* –6.80 275.10 160.00 Spirax-Sarco Eng . . . . . . . . . . .1661.00 –16.00 1716.00 994.50
Autonomy Corp . . . . . . . . . . . .1794.00 –8.00 2012.00 1278.00 EnQuest . . . . . . . . . . . . . . . . . . .120.10 –0.70 125.90 87.35 Mercantile IT . . . . . . . . . . . . . . . .969.50 –3.50 1002.00 822.50 Spirent Comms . . . . . . . . . . . . . .142.20* +2.30 143.00 83.65
Aveva . . . . . . . . . . . . . . . . . . . .1404.00 +1.00 1487.00 856.50 Essar Energy . . . . . . . . . . . . . . .464.00 +16.70 475.90 358.50 Michael Page Intl. . . . . . . . . . . . .449.00* +3.00 461.50 309.90 Sports Direct Intl . . . . . . . . . . . . .124.00 — 128.20 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .417.60 +4.30 474.00 290.20 Eurasian Nat Res . . . . . . . . . . . .884.50* +23.50 1276.00 781.00 Micro Focus . . . . . . . . . . . . . . . .363.00* –0.70 550.00 272.20 SSL Intl . . . . . . . . . . . . . . . . . . . 1156.00 — 1190.00 596.50
Babcock International . . . . . . . . .551.50 +3.50 660.50 489.00 Euromoney Inst Inv . . . . . . . . . . .589.50 –7.50 630.00 277.00 Millen & Copthorne . . . . . . . . . . .525.00* +1.50 534.50 321.40 St James’s Place . . . . . . . . . . . . .273.60* +3.90 296.90 203.40
BAE Systems . . . . . . . . . . . . . . .334.40 +1.30 389.90 288.10 Experian . . . . . . . . . . . . . . . . . . .668.50 +4.00 676.50 495.00 Misys . . . . . . . . . . . . . . . . . . . . .290.00 +1.00 291.10 179.30 Stagecoach. . . . . . . . . . . . . . . . .184.80 –1.10 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .255.00 +4.20 328.85 228.60 F&C Comm Prop . . . . . . . . . . . . . .92.30 +0.35 96.80 79.50 Mitchells & Butlers . . . . . . . . . . .302.90 –5.40 343.90 228.30 Standard Chartered . . . . . . . . . .1930.50* +24.00 1939.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .324.00 +0.30 394.25 253.40 Ferrexpo . . . . . . . . . . . . . . . . . . .309.10* –0.30 396.20 138.00 MITIE . . . . . . . . . . . . . . . . . . . . .197.70 –2.10 269.20 187.80 Standard Life . . . . . . . . . . . . . . .222.20* +3.70 237.00 170.00
Barratt Development . . . . . . . . . .102.60 –2.50 186.56 89.10 FirstGroup . . . . . . . . . . . . . . . . .358.60 –5.50 448.80 331.20 Mondi . . . . . . . . . . . . . . . . . . . . .510.00* +3.00 511.00 291.30 SuperGrp . . . . . . . . . . . . . . . . . 1107.00 –42.00 1150.00 499.00
BBA Aviation . . . . . . . . . . . . . . .196.00* –1.30 220.00 145.90 Foreign & Col Inv Tst. . . . . . . . . .286.40 –2.10 297.20 240.50 Monks Inv Tst . . . . . . . . . . . . . . .320.10 +0.80 321.20 256.00 TalkTalk . . . . . . . . . . . . . . . . . . .135.80 +3.80 147.10 106.60
Bellway. . . . . . . . . . . . . . . . . . . .568.00 –5.00 927.50 510.00 Fresnillo . . . . . . . . . . . . . . . . . . 1190.00* +30.00 1197.00 647.00 Morrison Wm . . . . . . . . . . . . . . .296.50 +1.40 306.30 255.00 Talvivaara Mining . . . . . . . . . . . .444.20 –1.50 501.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .842.00 –6.00 959.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .254.10* +0.30 285.70 217.70 Murray Intl Tst . . . . . . . . . . . . . . .896.50 –9.50 907.50 679.50 Tate & Lyle . . . . . . . . . . . . . . . . .471.80 +3.20 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . .1098.50 +0.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .500.00 –2.00 502.50 370.00 National Express. . . . . . . . . . . . .246.90 +1.00 258.60 155.86
BHP Billiton . . . . . . . . . . . . . . .1981.00* +11.00 2346.00 1583.50 GKN . . . . . . . . . . . . . . . . . . . . . .160.20* +0.20 164.70 100.40 National Grid . . . . . . . . . . . . . . .562.00 +0.50 607.65 474.80 Taylor Wimpey . . . . . . . . . . . . . . .29.14 –0.31 49.40 24.29
BlackRock Mining . . . . . . . . . . . .607.50 –3.00 654.50 462.10 GlaxoSmithKline . . . . . . . . . . . .1282.00* –0.50 1347.00 1088.00 Next . . . . . . . . . . . . . . . . . . . . .2040.00 –43.00 2360.00 1666.00 Telecity . . . . . . . . . . . . . . . . . . . .524.00 –3.50 533.50 311.30
Bluecrest Allblue GBP . . . . . . . . .167.80 +0.10 169.00 139.20 Great Portland Estates . . . . . . . .332.60 +1.10 334.40 236.60 Northumbrian Water . . . . . . . . . .349.70 +1.70 353.00 225.20 Templeton Emrg Mkts . . . . . . . . .587.50 +1.50 598.00 424.20
Booker . . . . . . . . . . . . . . . . . . . . .48.75 +1.50 49.50 37.50 Greene King . . . . . . . . . . . . . . . .431.40* –3.60 484.00 372.50 Old Mutual . . . . . . . . . . . . . . . . .138.90 –0.10 140.10 91.60 Tesco . . . . . . . . . . . . . . . . . . . . .423.25 +1.05 454.90 368.40
BP . . . . . . . . . . . . . . . . . . . . . . .415.20 –0.85 658.20 296.00 Halfords . . . . . . . . . . . . . . . . . . .484.00 –10.00 562.50 324.00 Partygaming . . . . . . . . . . . . . . . .291.40 –4.60 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .196.30* –1.20 277.20 172.30
Brit Insurance . . . . . . . . . . . . . . .992.00 –1.00 1017.00 709.00 Halma . . . . . . . . . . . . . . . . . . . . .310.30 +6.70 314.70 198.00 Pearson . . . . . . . . . . . . . . . . . . .991.50* –11.50 1069.00 735.50 Tomkins . . . . . . . . . . . . . . . . . . .323.70 +0.20 325.70 155.00
British Airways . . . . . . . . . . . . . .235.00 — 255.80 172.40 Hammerson . . . . . . . . . . . . . . . .388.60* +1.10 460.30 332.20 Pennon . . . . . . . . . . . . . . . . . . . .608.00* –2.00 613.00 440.40 Travis Perkins . . . . . . . . . . . . . . .820.50 –9.00 915.00 647.50
British Amer. Tob . . . . . . . . . . .2355.00* –18.00 2386.50 1832.00 Hargreaves Lansdown . . . . . . . .426.00* +5.10 426.50 259.40 Persimmon . . . . . . . . . . . . . . . . .399.00 –12.50 523.00 335.90 TUI Travel . . . . . . . . . . . . . . . . . .221.80* –4.10 313.90 189.20
British Empire Tst . . . . . . . . . . . .453.40 –2.40 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . .109.40 +0.10 119.00 82.50 Petrofac . . . . . . . . . . . . . . . . . .1410.00 +38.00 1446.00 900.00 Tullett Prebon . . . . . . . . . . . . . . .395.00 –4.80 436.20 261.20
British Land . . . . . . . . . . . . . . . .487.00 –5.00 531.00 416.00 Henderson . . . . . . . . . . . . . . . . .134.70* –2.10 157.80 112.10 Petropavlovsk . . . . . . . . . . . . . . 1198.00 +20.00 1370.00 834.00 Tullow Oil . . . . . . . . . . . . . . . . .1270.00 +29.00 1375.00 979.50
Britvic. . . . . . . . . . . . . . . . . . . . .492.50 +5.00 518.00 324.80 Heritage Oil. . . . . . . . . . . . . . . . .323.70 –2.20 585.00 298.20 Premier Farnell . . . . . . . . . . . . . .269.00 –1.50 272.60 140.60 UK Commercial Prop. . . . . . . . . . .80.35 –0.70 84.90 69.10
Brown(N.) . . . . . . . . . . . . . . . . . .229.40 –7.00 284.30 204.80 Hikma Pharma . . . . . . . . . . . . . .800.00* +3.50 813.00 443.00 Premier Oil . . . . . . . . . . . . . . . .1659.00 –6.00 1681.00 984.00 Ultra Electronics . . . . . . . . . . . .1738.00* –1.00 1764.00 1198.00
BSkyB . . . . . . . . . . . . . . . . . . . .714.50 –1.50 732.00 521.00 Hiscox . . . . . . . . . . . . . . . . . . . .360.00* –2.00 371.10 299.60 Provident Financial . . . . . . . . . . .860.50 –12.50 986.00 795.00
BT . . . . . . . . . . . . . . . . . . . . . . .144.00 +0.50 151.00 108.40 Hochschild Mining . . . . . . . . . . .406.20* +15.20 407.60 220.00 Prudential . . . . . . . . . . . . . . . . . .621.00* +3.00 665.00 475.70 Unilever . . . . . . . . . . . . . . . . . .1785.00* +17.00 2024.00 1615.00
Bunzl . . . . . . . . . . . . . . . . . . . . .757.00 +7.50 784.50 587.50 Home Retail . . . . . . . . . . . . . . . .212.40 –3.30 326.30 208.50 PZ Cussons . . . . . . . . . . . . . . . .342.70* –2.30 373.20 220.00 United Utilities . . . . . . . . . . . . . .595.00 –1.00 620.00 429.00
Burberry . . . . . . . . . . . . . . . . . . .899.00 –11.00 917.00 457.70 Homeserve . . . . . . . . . . . . . . . . .486.30 –1.20 494.50 435.40 Qinetiq . . . . . . . . . . . . . . . . . . . . 115.70 –0.20 179.10 103.50 Utd Business Media . . . . . . . . . .606.00* +4.00 613.00 408.30
Cable & Wire Comms . . . . . . . . . .61.00 +1.00 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .676.20* –1.70 766.80 595.20 Randgold Resources. . . . . . . . .6290.00 +170.00 6600.00 3930.00 Vedanta Resources . . . . . . . . . .2128.00 +19.00 2967.00 1795.00
Cable & Wire Wwide . . . . . . . . . . .73.95 +1.90 94.80 60.05 Hunting . . . . . . . . . . . . . . . . . . .631.00 –11.50 659.50 429.10 Reckitt Benckiser . . . . . . . . . . .3420.00* +6.00 3667.00 2938.00 Victrex . . . . . . . . . . . . . . . . . . .1233.00 –8.00 1320.00 726.50
Cairn Energy. . . . . . . . . . . . . . . .440.30 +2.20 497.60 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . .458.00 –7.20 478.30 291.70 Reed Elsevier . . . . . . . . . . . . . . .539.50 +2.00 566.00 454.60 Vodafone . . . . . . . . . . . . . . . . . .159.95 –0.25 160.95 126.50
Caledonia Invs . . . . . . . . . . . . .1621.00 –6.00 1759.00 1496.00 IG . . . . . . . . . . . . . . . . . . . . . . . .509.50* –2.50 532.00 291.00 Regus . . . . . . . . . . . . . . . . . . . . . .75.15* –0.05 125.50 64.05 Weir . . . . . . . . . . . . . . . . . . . . .1397.00 –11.00 1420.00 635.00
Capita . . . . . . . . . . . . . . . . . . . . .770.50* +21.50 829.50 693.00 Imagination Tech Gp . . . . . . . . . .347.20 –1.50 385.00 154.00 Renishaw . . . . . . . . . . . . . . . . . .980.00 –3.50 1021.00 479.00 WH Smith . . . . . . . . . . . . . . . . . .436.80 –5.70 551.00 392.20
Capital & Counties . . . . . . . . . . .129.00 +0.70 130.90 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .740.50* –0.50 786.00 410.00 Rentokil Initial . . . . . . . . . . . . . . .107.00 –0.10 140.20 91.15 Whitbread . . . . . . . . . . . . . . . . .1589.00 +9.00 1645.00 1141.00
Capital Shopping Centres . . . . . .359.80 +2.80 580.00 300.10 Imperial Tobacco. . . . . . . . . . . .1923.00 –12.00 2159.00 1728.00 Resolution . . . . . . . . . . . . . . . . .249.60* –2.30 264.80 220.10 William Hill . . . . . . . . . . . . . . . . .181.50 –1.90 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .313.90* –3.40 361.90 263.90 Inchcape. . . . . . . . . . . . . . . . . . .289.70 –0.60 347.00 235.00 Rexam . . . . . . . . . . . . . . . . . . . .309.60* +3.00 348.80 253.40 Witan Inv Tst . . . . . . . . . . . . . . . .460.80* +1.00 487.00 396.00
Carnival . . . . . . . . . . . . . . . . . .2399.00 +3.00 2937.00 1876.00 Informa . . . . . . . . . . . . . . . . . . . .420.10* –4.60 439.40 263.30 Rightmove . . . . . . . . . . . . . . . . .735.00 +0.50 796.50 456.90
Catlin . . . . . . . . . . . . . . . . . . . . .345.90* –0.10 394.60 303.20 Inmarsat . . . . . . . . . . . . . . . . . . .719.50 –0.50 831.00 526.00 Rio Tinto . . . . . . . . . . . . . . . . . .3622.00 +2.50 4104.00 2435.00 Wolseley . . . . . . . . . . . . . . . . . .1435.00 –15.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .166.00 –2.80 188.70 92.00 Intercontl Hotels . . . . . . . . . . . . 1115.00* –1.00 1244.00 762.50 RIT Capital Partners . . . . . . . . . 1133.00 –12.00 1215.00 940.00 Wood Group (John). . . . . . . . . . .391.40* –2.50 411.70 279.60
Centrica . . . . . . . . . . . . . . . . . . .344.00 +1.10 346.10 236.30 Intermediate Capital . . . . . . . . . .292.60 –1.40 332.00 233.50 Rolls Royce . . . . . . . . . . . . . . . .584.00 –11.00 631.50 434.50 WPP . . . . . . . . . . . . . . . . . . . . . .703.50 +5.00 744.00 520.50
Charter Intl . . . . . . . . . . . . . . . . .677.50 –7.50 855.50 563.50 Intertek . . . . . . . . . . . . . . . . . . .1794.00 +13.00 1808.00 1136.00 Rotork . . . . . . . . . . . . . . . . . . .1669.00* –16.00 1693.00 1040.00 Xstrata . . . . . . . . . . . . . . . . . . . 1170.00 — 1344.50 815.00
Chemring . . . . . . . . . . . . . . . . .2976.00 +41.00 3711.00 2266.00 Intl Personal Fin . . . . . . . . . . . . .270.20* –1.20 283.00 135.30 Royal Bank Of Scot . . . . . . . . . . . .50.15 +0.48 58.95 28.25 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .700.50 –6.50 806.50 657.00 Intl Power . . . . . . . . . . . . . . . . . .394.50 –1.80 396.80 248.20 Royal Dutch Shell A . . . . . . . . .1866.00 +2.50 2068.50 1621.00
Cobham . . . . . . . . . . . . . . . . . . .238.30 +4.60 278.60 205.50 Invensys . . . . . . . . . . . . . . . . . . .277.00 — 350.30 224.90 Royal Dutch Shell B . . . . . . . . .1807.50 –10.00 1997.50 1550.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . . 119.30 –1.40 144.20 107.70 Investec . . . . . . . . . . . . . . . . . . .510.00 +3.00 565.00 411.50 RSA Insurance . . . . . . . . . . . . . .127.50* –1.10 142.00 114.10
Compass . . . . . . . . . . . . . . . . . .550.00 –1.50 574.50 350.10 ITV . . . . . . . . . . . . . . . . . . . . . . . .57.65 –0.85 71.75 41.04 SABMiller . . . . . . . . . . . . . . . . .1968.50 –4.00 2090.00 1439.00 www.interactivedata.com

FTSE edges up as hunger for Promising US retail

mining shares boosts trading data fuels optimism
US blue chips were 0.3 per cent in the short term. Massocca, managing director at
THELONDON higher by London’s close, with the
above-forecast August retail sales
Elsewhere, TUI Travel shed 1.8 per
cent, after BofA Merrill Lynch cut its THENEW YORK Wedbush Morgan in San Francisco.
Gains were capped as financial

REPORT numbers helping allay fears over a

double-dip recession.
Meanwhile, British inflation defied
rating for the tour operator to “neu-
tral” from “buy” and reduced its tar-
get price to 230 pence from 270 pence
REPORT shares gave back recent gains leading
up to the Basel III rules, which set
new capital regulations for banks.
expectations of a fall in August and in a review of the European travel sec- After hitting an eight-month low

B S
RITAIN’S leading shares edged held steady at the level that last tor. TOCKS were little changed yes- on August 30, the KBW Bank index
higher yesterday, matching month forced the Bank of England to Broker comment also hit Next, terday after promising data jumped nearly 12 per cent leading
modest gains on Wall Street fol- write a public letter to explain why down 2.1 per cent after Societe from the retail sector fed recent into the Basel announcement before
lowing above-forecast US retail prices were rising so fast. Generale cut its rating on the fashion optimism that the economic falling 1.4 per cent yesterday.
sales data, with commodity issues Among individual gainers in chain to “sell” from “hold” ahead of recovery, while slow, is proceeding. JPMorgan Chase & Co chief execu-
standing out. London, outsourcing group Capita first-half results due tomorrow. Retailers were a bright spot after tive Jamie Dimon said in an investor
At the close, the FTSE 100 index added 2.9 per cent, while midcap And fellow retailer Home Retail data showed US retail sales rose in presentation the new capital rules are
was up 1.88 points, or 0.1 per cent, at peer Logica rose 4.7 per cent as Group lost 1.5 per cent after Nomura August for their largest gain in five expected to increase bank loan prices
5,567.41, marginally extending Capgemini UK initialled a deal with cut its stance to “reduce” from months. Best Buy’s higher-than- for customers and may drive some to
Monday’s four-month closing high. the UK government which reassured “hold”. expected quarterly profit and raised seek financing from non-bank finan-
“The last-minute push higher by investors about public sector con- Defensively-perceived tobaccos outlook validated the government fig- cial institutions. Shares slipped 1 per-
bulls gives further evidence that tracts. were the worst performing blue chips ures. The S&P Retail index rose 1.2 per cent to $40.72.
investors are hungry for risk and with Defence group Cobham was anoth- as a sector, with Imperial Tobacco cent. Helping sentiment tomorrow was a
five gains on the trot now, the market er good gainer, up 2.0 per cent after falling 0.6 per cent, while British The broad S&P 500 index stayed further decline in the US dollar,
looks stronger and stronger as vol- Credit Suisse upgraded its rating on American Tobacco lost 0.8 per cent. above its 200-day moving average of which may indicate investors are
umes pick up again after the summer the stock to “outperform” from “neu- around 1,115 after closing beyond turning away from safe-haven assets.
break,” said Angus Campbell, head of tral”, saying it has increased its earn- ANALYSIS l FTSE that level on Monday for the first The Dow Jones industrial average
sales at Capital Spreads. ings per share estimate for 2010. 5,567.41 time since early August. dropped 17.64 points, or 0.17 per cent,
Heavyweight miners posted the ARM Holdings was the top individ- 5,600 14 Sep Wall Street analysts have eyed the to 10,526.49. The Standard & Poor’s
best gains, with Randgold Resources ual FTSE 100 faller, losing 4.0 per cent 1,130 level as a key resistance point 500 Index shed 0.80 points, or 0.07
and Fresnillo up 2.8 per cent and 2.6 after the chip maker said directors 5,400 for the benchmark index, which per cent, to 1,121.10. The Nasdaq
per cent respectively, as gold hit a and executives of the company sold 5,200 could mean a strong move higher if it Composite Index gained 4.06 points,
record high and copper pared losses shares on Friday and Monday. can pierce that target. or 0.18 per cent, to 2,289.77.
as better-than-expected US retail sales Traders also noted fading bid spec- 5,000 “We went through the 200-day yes- Volume was light with about 7.2bn
data boosted demand expectations. ulation for ARM, with US rival Intel, terday, stayed above it today. It’s only shares traded on the New York Stock
4,800
Crude prices also benefited oil which has previously been men- natural that we consolidate here a lit- Exchange, the American Stock
issues, with Essar Energy the top FTSE tioned as a possible bidder, having tle bit, but if we punch through here, Exchange and Nasdaq, well below last
100 gainer, up 3.8 per cent. said it plans no further acquisitions 14 Jun 2 Jul 22 Jul 11 Aug 1 Sep we will see 1,200,” said Stephen year’s daily average of 9.65bn.
 26 Investment | Fund Management
Unloved European equities
are cheap and attractive
Their valuations
and exposure to
emerging markets
makes them a steal,
writes Jessica Mead
I
T WAS not so long ago that European
equities were underloved and under-
owned. A combination of the sover-
eign debt crisis and fears of a patchy
economic recovery saw investors dumping
European-listed stocks in favour of almost
anything else. Global fund allocations to
European equities languish at around 13
per cent, close to the lows of April 2003.
But subdued risk appetite can’t deter
investors from European equities now.
According to Bank of America-Merrill
Lynch’s September Fund Managers’ Survey,
two thirds of investors view them as cheap,
the highest reading since February 2003.
“This offers scope for a rally should eco-
nomic news improve,” says Gary Baker,
head of European equities strategy at BofA
Merrill Lynch Research.
Deutsche Bank analysts Michael Biggs,
Gareth Evans and Joelle Anamootoo agree:
“The valuation case for equities appears
persuasive, but invariably the market
needs a trigger for the favourable valuation
case to translate into equity performance.”
They reckon that the fair-value forward
price-to-earning (p/e) ratio for European
equities is 12.5 times, some 16 per cent
above the current forward p/e of 10.8 times.
Their research also suggests that a 1 per
cent upside surprise in GDP growth raises
equity returns by 6.95 per cent, so any
growth improvements will be good for
equities. Although there are signs of a mod-
eration in the pace of growth in the second
half of the year, the European Commission
(EC) now expects that the Eurozone econo-
my will grow this year at nearly twice the
pace that it forecast in the spring. And the
prospects for the second half, despite the
slowdown, now appear rosier than the EC
anticipated back in May.
BEST BUSINESSES
One fund manager who has been consis-
tently bullish on European equities since
the start of this year is Alister Hibbert, man-
ager of BlackRock’s European Dynamic
Fund. “Europe offers some of the best busi-
nesses at low valuations, benefiting from
exposure to the most attractive trends
Ethical investors cannot have their cake and eat it
Socially responsible funds require
compromise, says Juliet Samuel
A
CADEMICS were making waves in
the socially responsible investment
(SRI) community this week, as a
new study suggested that SRI funds
offer lower returns than simple index-
trackers. Conducted by the EDHEC-Risk
Institute, the paper updates a study of
French SRI funds by looking at 172 funds’
returns between 2002 and 2009. It shows
that while the SBF 250 rose 4.67 per cent
over the period, the SRI funds in the study
rose just 1.32 per cent on average. Green
funds performed better at 3.38 per cent.
The paper’s methodology is far from per-
Like Nokian Tyres, within emerging markets. Emerging mar-
European equities are kets account for around 20 per cent of
able to climb with European corporate revenues across the
plenty of traction market,” Hibbert says.
His picks include Finnish winter tyre
manufacturer Nokian Tyres, which is fore-
cast to benefit from economic recovery in
Russia and a more powerful Russian con-
sumer. Winter tyres command more brand
loyalty than normal tyres, so the returns
are much higher – it generates a 30 per
cent-plus operating profit margin within
its tyre division in a normal year.
Also in the European Dynamic Fund is
Denmark’s Novo Nordisk, which is a fast-
growing pharmaceutical firm that is the
dominant global franchise in diabetes
treatment and has a 60 per cent share in
the Chinese insulin market. As China gets
wealthier, it is also expected to step up gov-
ernment spending on healthcare. Novo
Nordisk has experienced an 850 per cent
relative return to the FTSE World Europe ex
fect, but it does raise the question of
whether promoters of SRI are disingenu-
ous when they claim ethical investment
always makes the best business sense.
SRI, which aims to incorporate
measures of environmental, social and
governmental responsibility into invest-
ment decisions, has caught on in recent
years. Many major asset managers and
pensions providers have constructed funds
that claim to invest only in low-carbon
assets or good labour practices.
SRI advocates often suggest that, in the
long-run, an ethical investment should be a
profitable one. Barbara Evans, sustainability
research analyst at RCM – a subsidiary of
Allianz Global Investors – says: “You might
have to wait a while but sustainability
research should be an enhancement to
UK over the past 15 years but Hibbert does
not think that it is expensive given that the
cautious management thinks the business
can grow 15 to 20 per cent per year.
Investors are slowly coming round to the
idea that European equities are unde-
servedly unloved – it is just a case of
picking the stocks to capitalise on the most
attractive opportunities.
ANALYSIS l Global GDP and
European earnings
6 PIMCO’s investment expertise via savings
5 and insurance products and defined contribu-
4 tion (DC) schemes offered on Aegon’s invest-
% year - on - year
3 ment platform. Pimco said the move marked
2
1 the PIMCO Select fund range will mirror
0 those available on PIMCO’s existing Dublin-
Global growth (PPP)
-1
Europe real EPS growth (rhs)
-2
1980 1988 1996
stock-picking, not a detractor. I don’t see
how it could detract from performance.”
But if this is true, why create special SRI
funds? Shouldn’t financial imperatives
organically result in ethical investment?
Perhaps, but investors need to realise
that “ethical investment” is not a mono-
lithic ideal that one either pursues or
ignores. Different ethical priorities often
conflict with one another. Ashmore
Group’s Jerome Booth emphasises that
while none of Ashmore’s funds bear the
SRI label explicitly, that does not mean
they are not socially responsible: “There’s a
negative way of interpreting it – ‘don’t do
this or that’. Or there’s a more positive
way: do invest in countries that need the
investment. The best ethical stance is to
encourage more people to invest in emerg-
CITYA.M. 15 SEPTEMBER 2010
FUND
MANAGEMENT
NEWS
BY JESSICA MEAD
One of Grosvenor Fund’s properties
GROSVENOR FUND’S £110M LLOYDS DEAL
Grosvenor Fund Management UK announced
earlier this week the completion of a new
£110m debt facility with Lloyds TSB Corporate
Markets for its £400m Grosvenor London
Office Fund. The three-year deal replaces the
existing facility with Lloyds Banking Group,
which expires this month. The fund’s loan-to-
value ratio is low at about 25 per cent and the
interest cover ratio is extremely comfortable,
Grosvenor Fund Management said. The fund
invests in high quality office buildings in prime
central London, providing secure income with
rental and capital growth potential. It current-
ly owns four Grade A assets; 40 Grosvenor
Place, Almack House, Belgrave House and 10
Grosvenor Street. The fund is due to be wound
up in December 2012, but Grosvenor is in talks
with investors about extending its life. A sec-
ond central London office fund is also under
consideration.
CULLEN CAPITAL ARRIVES IN EUROPE
US value and income specialist Cullen Capital
Management entered the UK and European
markets this week, making two of its flagship
value equity strategies available to investors
as Dublin-domiciled Ucits funds. Jim Cullen,
president, portfolio manager and founder of
Cullen Capital Management, said that this
marked a strategic move for the firm’s long-
term business plans. The funds will launch on
1 October and will be available in euro, ster-
ling and dollar denominations to institutional,
high net worth and retail investors.
PIMCO LAUNCHES UK RETAIL FUND RANGE
Global investment management firm PIMCO
this week launched its UK retail fund range
PIMCO Select in a partnership with life insur-
ance and pension firm Aegon. The tie-up will
Source: Deutsche Ban
give UK retail investors direct access to
the first in a series of strategic tie-ups for
PIMCO Select. The funds launched as part of
based Global Investor Series platform: the
PIMCO Select Global Bond Fund and the
2004 PIMCO Select UK Corporate Bond Fund.
ing markets, not to scare them off by say-
ing they’re doing something terrible.”
For investors who want to help alleviate
poverty, for example, investing in emerg-
ing market firms could be the best course
of action. But for others who worry most
about the environmental impact of emerg-
ing market development, investing in
green tech could make more sense.
The key is that managers are
transparent and systematic about how
they deal with ethical dilemmas so
investors can make an informed choice.
Rather than simply ticking boxes or cut-
ting out asset classes, investors must
realise that all decisions require compro-
mise, whether that means prioritising one
ethical need above another or foregoing
the very best returns.
CITYA.M. 15 SEPTEMBER 2010 Investment | Foreign Exchange 27

FX MARKETS
ARE POWERED
BY BEIJING
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT

A
S I prepare for my “all-things-forex” semi-
nar with Allister Heath on 23 September
between 8 and 10am at the Grange Hotel
(register at gftuk.com/cityam), I can’t help
but marvel at the idea that China is now the pri-
mary driver of trade in the FX market. Although its
own currency is tightly controlled, the Middle
Kingdom exerts an immense influence over the free
floating currencies of the West as traders look east
for direction on global economic growth.
Nothing demonstrates this new dynamic more I have a cunning plan... Picture: REX
clearly than this past week-end’s release of month-
ly Chinese economic data. After Chinese industrial

Policies prop up pound

production, retail sales and new loan reports all
beat consensus forecasts, the currency markets
roared to life on Sunday night pushing euro-US dol-
lar higher by more than 100 points as fears of a
global double-dip contraction began to fade and
the recovery trade received a second wind.
As China transitions from a mere producer of
manufactured goods to a significant consumer in
its own right, the world’s second largest economy
Austerity measures certainly not in better shape than the
Eurozone and the US, so why is sterling
recovery.” Confidence in recovery plans
have really started to resonate with cur-
now influences everything from demand for
Australian coal to German machinery goods. In will shore up sterling, performing better than its peers?
The verdict seems to be that economic
rency traders. Chris Hawkes says: “People
are looking at a broader basket of factors”
short, China is the new locomotive of the global
economy, replacing the US which continues to suf- says Donata Huggins uncertainty in the US and the Eurozone is
worse than in the UK at the moment. For
before they trade, needing to see three
out of four positive macro indicators
fer from the aftereffects of the burst of the hous- example the Eurozone industrial produc- before deciding where to put their
ing bubble. If China can maintain GDP growth at tion figures were disappointing. The money.

S
10 per cent or better for the rest of the year, TERLING bulls breathed a sigh of prospect of further bad news from the So why are traders trusting in sterling
chances of a global economic slowdown become relief yesterday after a broad sell-off Eurozone’s periphery and concerns about right now? Surely the double dip specula-
minimal even if the US economy continues to lag. in the dollar pushed cable to as the sustainability of the US recovery are tion ought to send shudders down the
Although the US is now the understudy on the high as $1.5588. This raised hopes more uncertain than the UK’s own brand trader’s spine? It turns out that simply
global economic stage, attention this week will that sterling would remain the best of a of troubles. having a blueprint for recovery appeases
focus squarely on the American economic calendar bad bunch and avoid weakness caused by The dollar as a safe haven currency the market. Even pessimistic RBS
as traders get a glimpse of the US retail sales, looming austerity measures. should be booming in this climate. But as analysts, who think that sterling has
industrial production, weekly jobless claims and Although sterling has appeared the Andrew Goodwin of the Ernst and Young entered a new and potentially dangerous
University of Michigan sentiment survey. Generally, best of the G3 currencies, it has not man- Item Club says: “The dollar has stumbled phase due to a slowing economy and soft
consensus expectations are for a moderate aged to consolidate on gains against the lately because markets are genuinely con- domestic demand, say: “at least the UK
improvement in all gauges of activity and the data euro and the dollar and has been stuck in cerned about the sustainability of the US has a plan.”
meets or beats forecasts the risk rally could a long-term holding pattern against both
progress throughout the week with euro-US dollar currencies. Over the past month or so, it ANALYSIS l The performance of the euro ANALYSIS l The performance of the US dollar
possibly targeting the $1.3000 level while dollar- has traded between $1.53 and $1.56 against the pound over the last three months against the pound over the last three months
yen trades to ¥85. In the end, China alone cannot against the dollar and between €1.19 and
1.24 € 1.6
$
sustain the global recovery and the US must con- €1.22 against the euro.
tribute even a modest amount to global growth in Even taking into account yesterday’s 1.23 1.58
order for the risk trade to thrive. sharp sell-off in the greenback, the pound
Boris Schlossberg and Kathy Lien are directors has not strengthened beyond the $1.5965 1.22 1.56
of currency research at GFT. Read commentary at mark against the dollar over the past
www.GFTUK.com/commentary or e-mail borisand- three months. Still the euro has been 1.21 1.54
kathy@gftuk.com. unable to make headway against sterling
beyond €1.2353 despite all three 1.2 1.52
economies suffering similar problems
(see charts). 1.19 1.5
Analysts all seem to broadly agree: the
pound will retain its strength, declining 1.18 1.48
only slightly in the face of the coming
austerity measures. The UK economy is 14 Jun 2 Jul 22 Jul 11 Aug 31 Aug 14 Jun 2 Jul 22 Jul 11 Aug 31 Aug

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CD03UK.113.073010
28 Investment | Foreign Exchange
All to play for
as the dollar
either rallies
Allister Heath
(lhs) and Boris
Schlossberg (rhs)
will talk forex or divebombs
London’s forex traders are invited to a
ADVERTORIAL free gathering, writes Juliet Samuel
N
EXT Thursday 23 September at
NEVER MISS A MARKET 8am, analysts and commenta-
tors will convene for a forex
jamboree at the Grange Hotel
MOVE AGAIN!
near St Paul’s. City A.M. editor Allister
Heath will be talking forex with lead-
ing currency analyst Boris Schlossberg
of GFT, and all readers are invited to
attend – for free. Heath says: “This is a
Talking-Forex.com – first for FX market commentary Real-time Analysis and great opportunity for anyone interest-
ed in retail forex trading to hear from
News Ltd, providers of the acclaimed RANsquawk service, are to provide an expert in the field over breakfast.”
FX traders world-wide with live audio financial news over the Internet via a Among the topics under discussion
will be the fate of the greenback in
new portal www.talking-forex.com. Designed specifically for the FX trader, light of sluggish global growth. So
at home or in the office, Talking-forex.com delivers economic, market what lies ahead for the world’s reserve
currency of choice?
analysis, commentary and alerts tailored to the FX marketplace for just GBP
20 per month. The real-time audio commentary is presented by market GREENBACK RALLY
In this scenario, housing and equity
analysts who filter the massive quantity of constant news and other markets will stabilise without the
need for further stimulus. Schlossberg
information hitting over 100 different newswires throughout European and summarises: “The best-case scenario
US trading hours. In addition to the audio feed, talking-forex.com also for the dollar is that US growth picks
offers real-time headlines, daily written macro analysis and video podcasts
FOCUS | LONDON’S FOREX CROWN
that will give any FX trader all the information he or she needs to remain one
step ahead of the market. Information covered will include news and Figures just released by the Bank for
rumours that affect any of the major currencies alongside major stop-loss International Settlements show that
levels and option barriers. Whatever is happening in the world that moves the UK has retained its place as the
world’s premier location for trading
the FX market will be picked up in seconds so that an FX trader can benefit. forex.
As the chart below shows, over a third
Professional traders have used RANsquawk internally to great success and of all global currency trades come
recognize that FX traders, whether using their broking services or not, can through the UK, with $1.85 trillion
moving through UK institutions each
directly benefit by accessing a tailored audio feed. “RANsquawk has been year. This compares with $479bn in
used by us for several years.” commented Sonny Schneider, Head of 1995. Overall, the size of the forex
market has expanded from $1.6 tril-
Schneider Trading – the largest proprietary trading house in the City of
London. “Throughout this time we have been so impressed with its
content, sound quality, and reliability, that we would highly recommend the
Source: Bank for International Settlements
new Talking-Forex.com portal for all FX traders. In a nutshell its dedicated
to FX.” FX traders cannot and will not find an information service that
delivers news, rumours and large bank flows so quickly – for so little outlay
per month. There is not a real-time news source out there that costs less
than GBP 20 per month. “I am delighted to offer something exclusively for
FX traders via the Talking-Forex.com portal.”, added Ranvir Singh,
* No other single country
Managing Director of RANsquawk, “Apart from the FX audio feed provided hosts more than 3.8%
by our team, each day we add a number of invaluable written analyses and
video podcasts covering technical and fundamental overviews of the FX FOREIGN EXCHANGE NEWS
space. We believe Talking-Forex.com will become the one-stop shop for all BY JESSICA MEAD
forex traders and those monitoring the spot/forward currencies space.
Talking-Forex.com – you will never miss a market move again FXCM ENHANCES AUTOMATED TRADING
Automated trading has become
increasingly popular among foreign
exchange traders and online forex and
CFD provider FXCM has this week
launched Strategy Trader, a free, all-in-
one automated forex trading solution
that allows clients to code strategies,
perform advanced back tests, run
detailed optimisation analysis, and
execute trades from a single platform.
CITYA.M. 15 SEPTEMBER 2010
up to 2.5 per cent by year-end, while
the euro remains under the sovereign
debt cloud.”
DOLLAR DIVEBOMBS
But things might not turn out so
peachy. BNY Mellon’s Simon Derrick
instead sees the buck plummeting 10
per cent in a worst-case scenario, as
the Fed’s attempts at quantitative eas-
ing prove futile, merely devaluing the
currency, and the US double dips.
In such a situation, the dollar’s fall
might be tempered by a decline in risk
appetite as traders flood away from
risky bets. But if the US disappoints at
the same time as growth in regions
with rival reserve currencies (such as
the yen or euro) picks up, the dollar
could divebomb.
Readers interested in attending for
more analysis should register for next
week’s free seminar at
www.gftuk.com/cityam.
lion in 1995 to over $5 trillion today.
London’s ability to retain the forex
crown is in part due to its history as a
centre of currency trading. No other
financial centre can boast the same
amount of liquidity and experience –
on an institutional and individual level.
And the UK’s timezone doubtless
helps: traders can use London as a hub
between the US and Asia to avoid
missing out on big moves in the cur-
rency markets.
ANALYSIS l Geographical distribution of global foreign exchange market turnover
Country %
United Kingdom 36.7
United States 17.9
2010 6.2
%
Japan
Singapore 5.3
Switzerland 5.2
Hong Kong 4.7
*Other 24
YUAN AT STRONGEST SINCE 1993
The Chinese yuan yesterday surged to
its highest level since the end of 1993
following speculation that Beijing will
allow faster appreciation of the cur-
rency to deflect potential US trade
sanctions. The currency gained 0.2 per
cent to 6.7463 yuan per dollar. Twelve-
month non-deliverable forwards were
barely changed yesterday at 6.66 yuan
per dollar.
CITYA.M. 15 SEPTEMBER 2010 Investment | Foreign Exchange 29

THE
Rate rises and TIPSTER
WEAK BUCK
DOMINATES
risk appetite to FX MARKET

T
HE greenback’s woes continue with the
trade-weighted dollar index hitting a

boost the krona new five-week low. Dollar investors con-

There is still further upside for the Swedish
currency against the euro, writes Jessica Mead
WESTERN central bank able to raise
tinue to be nervous about the ability of
the world’s largest economy to avoid a dou-
ble-dip recession given the latest slew of poor
economic data. This suggests that further
weakness in the greenback could well be
ahead. Capital Spreads quotes a price of
82.230-82.260 for the US dollar index
December contract.
Euro-US dollar has been flirting with the
$1.29 level for several weeks now and has
tried twice to break through this firm resist-
ance. Traders should watch out for move-
more rate hikes over the coming year, then ments in the currency around this level,

A interest rates without sparking con-

cerns of excess monetary tightening
is still something of a rarity. But the
Swedish Riksbank has been able to do just
that. Earlier this month, it raised rates to
0.75 per cent and signalled that it intended
to increase them to 1.75 per cent by the
end of 2013 with one further rise this year.
The hike attracted further speculative
flows into the Swedish krona, which has
strengthened considerably over recent
months. Against the euro, it has gained
almost 10 per cent since the start of the
year to 9.1935kr. Against the greenback it
has appreciated 13 per cent over the past
three months to trade at 7.1395kr.
Strategists have attributed the krona’s
strength to the rebound in equity markets,
a resurgence in risk appetite over the sum-
mer as concerns about the Eurozone sover-
eign debt crisis die down and a general
improvement in the global economy.
This strength is expected to continue:
“There is a continued search for G4 alterna-
tives that are still fundamentally strong, so
yield will ensure the Swedish krona finds
support against the euro in the months
ahead,” says RBS’s Ankita Dudani.
Saxo Bank’s FX consultant John Hardy
says that as long as the mood remains opti-
mistic and the market prices in a couple
euro-krona could continue to appreciate
slowly. But an export-led economy like
Sweden will feel the effects of a slowdown
acutely so any risk aversion could see the
euro strengthen.
Currencies Direct’s Mark O’Sullivan
points out that a lot of good news is
already priced in to the Swedish krona. “An
important level is 9kr to the euro. Euro
bears may be wary of pushing it even lower
so if we get better-than-expected Eurozone
data then the single currency may enjoy a
short-term bounce.” But he says that these
bounces should provide an ideal point at
which to buy the krona.
Besides trading euro-krona, there are
other ways in which traders can play the
krona. In the short-term, export-orientated
Sweden will benefit from the positive
Chinese data showing a rebalancing of the
economy. Therefore, BNP Paribas’ Ian
Stannard recommends selling dollar-krona
corrective rebounds towards 7.19kr with a
stop placed at 7.24kr and a target of 6.80kr.
Krona-yen is an actively traded pair at
the moment, says O’Sullivan. If you think
the yen is currently overbought, then you
could go long on the krona to benefit from
both the carry and the expected reversal in
the yen if global risk appetite continues to
strengthen, he suggests.
which could point to both strength in and
momentum behind the single currency. This
could push the market to as high as $1.31.
Cantor Index offers a daily euro-dollar
spread of $1.2854-$1.2855
In yet further evidence of a weakening
dollar, the Swiss franc yesterday broke
through parity with the dollar for the first
time in nine months as traders continued to
seek safe haven plays for their funds. There
may be no shortage of positive economic sig-
With further rates pencilled in, the Take a chance on the nals, including the stronger than forecast US
krona should continue to gain against the krona retail sales numbers, but there’s still an
euro and the greenback. Use any periodic underlying theme of pessimism. Each time
weakness in the Swedish currency to buy Picture: GETTY another wave of fear goes through the mar-
at cheaper levels. ket, the Swiss franc has the potential to
edge slightly higher. The current IG Index
ANALYSIS l Euro-Swedish krona since April 2008 price on dollar-Swissie is SFr1.0038-
Kr SFr1.0041.
11.5
As gold hit a new all-time high of
$1,276.50 yesterday, the South African rand
11 dipped towards its recent four-year lows of
R10.85 versus sterling, reaching a low of
10.5 R10.95. The South African rand, of course,
has a close positive correlation with gold and
10 any continued strength in the yellow pre-
cious metal should see it take out those four-
9.5 year lows and head towards R10.50 or even
R10.00. Spread Co offers a spread on ster-
ling-rand of R10.9852-R11.0052.
2008 October 2009 Jul 2010 Jul Jessica Mead

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
JOHN KICKLIGHTER ILYA SPIVAK JOEL KRUGER

My pick: Stay short cable from $1.55; long euro-dollar above $1.2925
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day-1 week
We have seen lots of volatility this past week; but a clear direction on
underlying trends is still eluding us. Short-term setups are what I’m
looking under these conditions; but for a weekly time frame, I want to
balance the outcome of a potential break. I’ll remain with my short
sterling-dollar setup from $1.55. To this, I will look for a confirmed bull-
ish break from euro-dollar above $1.2925 (with a 100 basis point initial
target and stop).
My pick: Remain short euro-US dollar at $1.2660
Expertise: Global macro, classic technical analysis
Average time frame of trades: 1 week-6 months
I sold euro-dollar at $1.2660 on 23 August. Prices found interim support at a
minor rising trend line set from mid-August, with a sentiment-driven bounce
higher taking out a horizontal barrier at $1.2762 on the back of the Basel III
announcement and a robust set of Chinese data. The trade remains within
established parameters while the drivers behind the advance appear short-
lived, hinting it is little more than a correction. I will remain short, targeting
$1.2130. A stop-loss will be activated on a daily close above $1.2925.
My pick: Buy dollar-yen at ¥80
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
A few weeks back we recommended a long position by ¥84. We now
recommend exiting this position and standing aside in anticipation of
another drop in the pair to retest the critical all-time lows of 1995 at
¥79.75 over the coming days. The markets are very aware of the ¥79.75
level and, more often than not, these levels are tested before any possibil-
ity of reversal can occur. Buy at ¥80 with an objective of ¥100 and a
stop at ¥74.
 City Focus
30 CITYA.M. 15 SEPTEMBER 2010

| Law

HP poaching row
shows limits of
employment law
ple, may seek to prevent an employee from
working for a competitor for a fixed peri-
od following their departure) unless those
restrictions were issued in connection
with the sale of a business. Accordingly, it
appears to be the view of most US legal
commentators that HP’s legal action will
only succeed if HP can show Hurd has
knowledge of trade secrets relating to spe-
NICK THOMAS cific technical know-how, as opposed to
JONES DAY the knowledge of HP’s business plans and
structure that, as CEO, he will inevitably

T
HE business world continues to
monitor with interest what appears
to be a growing rift between tech-
nology giants Oracle and Hewlett
Packard (HP), competitors who have until
recently enjoyed a relationship of coopera-
tion and collaboration. The apparent ani-
mosity arises out of Oracle’s decision to
appoint to its board former HP CEO, Mark
Hurd, only a few weeks after he left HP
amid various allegations of inappropriate
conduct.
Within 24 hours of Hurd’s appointment
being announced, HP launched a law-suit
in the Californian courts seeking to pre-
vent it, ostensibly on the grounds that his
proposed position on the Oracle board
made it inevitable that he would disclose
HP’s trade secrets, thereby causing signifi-
cant damage to HP’s business.
Both Hurd and Oracle are perhaps fortu-
nate that they are based in California,
widely regarded to be the US state in
which the courts are least likely to inter-
fere with an employee’s fundamental
right to change jobs. Specifically, and
unlike most other states, the Californian
courts will not as a general rule uphold
any post-termination restrictive covenants
of the sort common in UK-based execu-
tives’ service agreements (which, for exam-
be aware of.
Were Hurd based in the UK, the legal
position would be somewhat different.
Although, as a matter of public policy, the
courts approach any attempt to restrict an
individual’s employment opportunities as
an unlawful restraint of trade, unlike
their Californian counterparts a UK court
will uphold restrictive covenants con-
tained in an individual’s employment con-
tract provided it is satisfied that those
restrictions are reasonable and necessary
to protect an employer’s legitimate busi-
ness interests. Jodie Fisher, who poaching of all of an employer’s cus- faced by HP in California: there will be a
With a range of potential options open accused Mark Hurd of tomers is unlikely to be enforceable, but need to demonstrate that abuse of trade
to an employer, from a blanket ban on sexual harassment one that is limited only to those cus- secrets and/or highly confidential infor-
competition to preventing the poaching of tomers with whom the employee had sub- mation has occurred or is inevitable. In
specific customers or other employees, the Picture: GETTY stantial dealings may be. practice, this presents an evidential hur-
question of what is “reasonable and neces- As a general rule, if the court concludes dle that few employers in positions such
sary” is judged on the facts of each case, that a restriction is unreasonably wide, it as HP can surmount.
and has, perhaps not surprisingly, proved will not amend it in a way that makes it Against this backdrop, the current dis-
fertile ground for employment lawyers. It more palatable, but instead will disregard pute between Oracle and HP and the
is however possible to distil particular it entirely. An employer is therefore better potential damage that Hurd’s change of
judicial trends which all employers would advised to include in its employment con- employer could cause to the latter’s busi-
do well to heed. Primary among these is tracts relatively narrow restrictions that ness represents a salutary reminder to UK
the court’s requirement that any restric- give it some comfort as opposed to more employers of the need to ensure that its
tion be sufficiently personalised to an wide ranging restrictions that the courts key employees are subject to appropriate
individual’s role to provide targeted pro- will not enforce. and legally enforceable contractual provi-
tection to the employer that goes no wider In the absence of any express restrictive sions that will restrict their competitive
than is genuinely necessary. So, for exam- covenants on which to rely, the UK posi- activities after their employment comes to
ple, a restriction seeking to prevent the tion is not all that different to the one an end.

Tweeting about the boss can get you the sack

line between working lives and private
HELEN BODDY & lives is becoming blurred. Employers are
ADAM LANDY more regularly monitoring their employ-
ees’ online activities, both to protect the
STEVENS & BOLTON LLP privacy of other employees and to prevent
the employee from bringing the organisa-
tion into disrepute or breaching commer-
without the employer’s knowledge.
Where, for example, an employee makes
comments online about another employ-
ee, the employer may be liable regardless
of when or where those comments were
made.
While employers will no doubt be keen
place so that staff understand what is
expected of them in their private lives
both off and online.
The bottom line for employees is to
recognise that what they post as their
online status could adversely affect their
employment status. However, as

W
HEN England cricketer Kevin
Pietersen vented his anger on
Twitter at not being selected in
the England cricket squad to
face Pakistan recently, he became the lat-
est person to fall foul of his employer via
social networking. After issuing an apolo-
gy saying that the message was sent by
mistake, he was handed an undisclosed
fine from the England and Wales Cricket
Board, but escaped further punishment.
Others have not been so lucky.
Over recent years the use of social net-
working and media sites such as Facebook,
YouTube and Twitter has grown signifi-
cantly and more and more people are
using these sites to post blogs, comments,
photographs and videos about their daily
lives. Consequently, employees’ private
lives are becoming more public, and the
cial confidentiality.
Many employees are unaware of the
consequences that their online posts
could have on their employment, think-
ing their behaviour outside working
hours, on “private” websites is unconnect-
ed to their employment. However, acts of
misconduct which occur on social media
sites are no different from any other act of
misconduct and if such activities are per-
ceived to be sufficiently detrimental to
their employer, this could count as gross
misconduct and justify their dismissal.
Employers are naturally wary of employ-
ees’ use of social networking sites, as
under anti-discrimination legislation they
can be vicariously liable for the acts of
their employees. Acts performed by an
employee can be treated as having been
done by the employer, even if it is done
to monitor the activities of their staff,
employees still have a right to a personal
life and provided they do not breach rea-
sonable conduct guidelines, employers
should respect this. However, employers
do need to respond to the potential for
online activities to cross the line into mis-
conduct territory by establishing clear
standards of behaviour online. Employers
should ensure they have a clear policy in
ONLINE ABUSE | NETWORK ERRORS
l In 2008 13 Virgin Atlantic flight attendants were
dismissed for describing passengers as “chavs” on a
social networking website.
l A number of Marks & Spencer employees were dis-
ciplined when they were caught calling customers
“idiots” on a Facebook forum.
Generation Y are more likely to have
online profiles, employers should be
aware of the potential for indirect age dis-
crimination claims if they monitor
employees’ activities on social networking
sites during their employment and dis-
miss them as a result of what they find,
on the basis that such action would have a
disproportionate effect on the younger
employees in the workplace.
l Several employees of directory enquiries company
118 118 were sacked after setting up a Facebook page
dedicated to trading insults about their customers.
l An employee of Ivell Marketing & Logistics was
fired after describing her job as “boring” on her
Facebook page.
 Lifestyle
31

| Motoring WORDS BY
RYAN BORROFF

Mixed signals from THE FACTS:

MAZDA CX-7
PRICE: £26,995

Mazda’s crossover
0-62MPH: 11.3 secs
TOP SPEED: 124mph
CO2 G/KM: 199g/km
MPG COMBINED: 37.7mpg
THE VERDICT:
DESIGN hhiii
PERFORMANCE hhhii
PRACTICALITY hhiii
VALUE FOR MONEY hhiii

Big but not spacious, sporty but not

versatile. So who is the CX-7 for?

F
ROM the outset, Mazda makes a pret-
ty bold claim: a crossover car with
the practicality and space of an SUV
combined with the sporty driving
dynamics of a sports car. And not just any
sports car, but an MX-5, one of the best
sports cars ever and certainly one of the
most fun to drive.
So I’m expecting a practical SUV that is
fun to drive. And it’s fair to say that that’s
exactly what the CX-7 is. Almost.
Looks-wise it’s a well-groomed mongrel
that’s not going to appeal to everyone. I
contest that it’s handsome enough, partic-
ularly in profile when the side windows
slope towards the front – called the shoul-
derline. Large wheel arches add to the
sporty looks. And its new face – with its
large wide mouth grille – adds to the car’s
unique image. So rather than featuring
the boxy SUV styling that has become dis-
appointingly ubiquitous, the CX-7 looks
quite different and for that, Mazda should
be commended. First seen in 2006, the
design is actually beginning to age – this is
a face-lifted version with a new diesel
engine – although in its segment it’s still
one of the most interesting.
When accelerating it feels so much
faster than the published figure of 11.3
seconds (0-62mph) that I tripled checked it
to ensure I hadn’t made a mistake. As it
has a new 2.2 litre diesel engine economy
it does pretty well (37.7mpg combined).
The cabin is also very quiet, unusual for
this type of car with a noisy diesel engine
under the bonnet. The handling too was
especially good, such that it felt like a
much more nimble and svelte car than it
actually is. The result was that the car
became more and more endearing as the
week went on.
Mazda’s new Inside there’s a sporty leather-wrapped
crossover. steering wheel and sport-orientated cock-
pit, a leather and piano-black trimmed
interior, a sat-nav – with a small, and thus
not obtrusive, screen in the dash – and
deep set dials. There’s also a Bose stereo,
with excellent Bluetooth compatibility
built in, so good that I could just sit my
iPhone on the centre console and stream
music from it, and I only docked it once.
The system would even remember where
the music left off when we returned to the
car. Space-wise the driver-focused nature of
the cockpit means the car feels cosy in the
front while in the back there is genuinely
plenty of room, even for the tallest passen-
gers. The seats fold down to increase the
quite average 455 litres of boot space to 755
litres. The car is comfortable but I felt that
it just lacks some of the practicality that I
had expected from a car this big.
Really, I’m just not sold on crossovers.
It’s like taking two really good games, say
rugby and football, combining them and
then trying to suggest that the resulting
game is better. But the CX-7 manages to be
an SUV that isn’t a dullard to drive and in
that sense at least, it’s a success. But it’s no
off-roader and makes no claims to be. So if
it’s an SUV/coupe crossover but without
the off-road capability, is it not then just a
big old sports car with lots of space? Not
exactly, since we weren’t blown away by
the space either. Which means if you’re
somebody that is in the market for an
SUV, who likes an elevated seating posi-
tion, but who has no need for a genuine
off-roader and would like something more
fun to drive, then the CX-7 could be for
you. But if you want a fun family car with
loads of function and flexible space, then
this probably isn’t the car you’re after.

CAR TALK BY RYAN BORROFF

The facts:
you can afford a Mercedes
The figures:
mercedes-benz.co.uk/offers
For more information on our tailor-made
packages or to book a test drive, visit us online.

LEXUS HATCHBACK GOES ZERO CARBON
Emissions are now officially the new battleground. Lexus
has announced that its new CT 200h compact hatchback
will have emissions as low as 96g/km of CO2 – beating
the magical sub-100g/km figure – thanks to its full hybrid
powertrain. This means road tax will be zero when the
car goes on sale in the UK early next year. Combined
cycle fuel economy should be as low as 68.9mpg too.
SAY HELLO TO A BRITISH SUPERCAR
Say hello to the very latest British supercar, the AF10,
from Arash Motor Company. The car, which has a modu-
lar carbon-fibre chassis and a 7-litre V8 engine (from a
Corvette-sourced 7.0-litre V8) delivers 550bhp and costs
£620,000. It will be on show at MPH The Prestige &
Performance Motor Show at Earls Court from 4
November.
A TASTE OF F1
Ferrari has released an online virtual simulator which
allows anyone to experience what it's like to drive a
Ferrari F10 race car. Ferrari used authentic race car data
to develop the software, along with the help of Ferrari's F1
team drivers. Players can compete online driving the
Fiorano, Mugello and Nürburgring race circuits.
www.ferrarivirtualacademy.com
 32 Lifestyle | TV& Games CITYA.M. 15 SEPTEMBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Bang Goes the Theory
8pm CHOICE Waterloo Road
9pm The Young Ones
10pm BBC News
10.25pm Regional News
10.35pm The National Lottery
Draws
10.45pm Reggie Perrin
11.15pm FILM The Best Man
2005; National Lottery Update
12.50am Sign Zone: Dragons’
Den
1.50am Ben Fogle’s Escape in Time
2.35am Watchdog 3.35am Britain’s
Empty Homes 4.05am-6am BBC
News
6pm Eggheads
6.30pm Climbing Great
Buildings
7pm Benedict: Trials of a Pope:
Mark Dowd examines the life of
Pope Benedict XVI.
8pm The Hairy Bikers: Mums
Know Best: Recipes passed
down through generations.
9pm The Big School Lottery
10pm Later 250 – with Jools
Holland
10.30pm Newsnight; Weather
11.20pm Bobby Moore: World
Cup Hero
12.10am Gareth Malone’s
Extraordinary School for Boys
1.10am BBC News 4.05am-6am
Close
6pm London Tonight
6.30pm ITV News
7pm Emmerdale: Declan makes
it clear he is not giving up his
share in Home Farm.
7.30pm CHOICE Live UEFA
Champions League: Arsenal v
SC Braga (Kick-off 7.45pm).
10pm ITV News at Ten
10.30pm London News
10.35pm UEFA Champions
League: Extra Time
12.25am The Zone; ITV News
Headlines
2.30am FILM Ready When You
Are, Mr McGill: Satirical comedy,
starring Tom Courtenay. 2003. 4am
The Jeremy Kyle Show 4.55am-
5.30am ITV Nightscreen
6pm The Simpsons 6pm Home and Away
6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Channel 4 News 7pm Five News at 7
7.55pm 4thought.tv 7.30pm Michaela’s Zoo Babies;
8pm Food Five News Update
9pm CHOICE Grand Designs: 8pm Emergency Bikers; Five
New series. Creating a home on News at 9
the Isle of Wight. 9pm NCIS
10pm Michael Jackson and 10pm Law & Order: Criminal
Bubbles: The Untold Story Intent
11.05pm Ramsay’s Best 11pm Law & Order WATERLOO ROAD
BBC1, 8PM
Restaurant 11.55pm Poker
12.10am FILM Alien 1979 12.55am SuperCasino Josh vents his own frustrations on a
2.10am The Album Chart Show 4.05am Chinese Food in Minutes new gay student, and gets involved in a
Spotlight 2.25am FILM Beyond 4.30am House Doctor 4.55am fight with Finn following the spread of
JFK: The Question of Conspiracy Rough Guide to Weekend Breaks malicious gossip around the school.
4.05am Night Walking 4.10am 5.10am The New Tomorrow
FILM The Men 1950 5.35am- 5.35am-6am Michaela’s Wild
6.20am Countdown Challenge

SKY SPORTS 1 1.30am Champions Tour Golf 3am UFC All Access 3.30am E4 4.40am Mystery Investigator
SATELLITE & CABLE

7pm Sky Sports News 7.30pm
Soccer Special 10pm You’re on
Sky Sports! 11.30pm FIFA
Futbol Mundial 12am Total
Rugby 12.30am UEFA
Champions League Goals
1.30am Boots ‘n’ All 2.30am
You’re on Sky Sports! 4am FIFA
Futbol Mundial 4.30am UEFA
Champions League Goals
5.30am-6am Total Rugby
SKY SPORTS 2
6pm UEFA Champions League
Pre-Game Show 7.30pm Live
UEFA Champions League 10pm
UEFA Champions League Goals
11pm Watersports World 12am
Transworld Sport 1am-3am
Poker Million
SKY SPORTS 3
7pm Ocean Ride 7.30pm Total
Rugby 8pm Boots ‘n’ All 9pm
Transworld Sport 10pm Boots
‘n’ All 11pm European Challenge
Tour Golf 12am Golfing World
1am European Tour Weekly
2.30am European Challenge
Tour Golf 3.30am-4am
European Tour Weekly
BRITISH EUROSPORT
6.20pm Equestrian 7.50pm
Riders Club 7.55pm US Tour
Golf 9.55pm Ladies European
Tour Golf 10.15pm Sailing
10.45pm Golf Club 10.50pm
Yacht Club 10.55pm Wednesday
Selection 11pm Rallying
11.15pm-12.30am Table Tennis
ESPN
6.15pm Premier League Preview
7.15pm ESPN Premier League
Kicks 7.30pm ESPN Kicks Extra
7.45pm Press Pass 2010 8.15pm
AFL Review Show 9.15pm
ESPN Kicks Extra 9.30pm ESPN
Game of the Week 10pm 30 for
30 11pm ESPN Kicks Extra
11.15pm Eredivisie Review
Show 12.15am ESPN Premier
League Kicks 12.30am Press
Pass 2010 1am Live Ultimate
Fighting Championship
UFC Unleashed 4.30am ESPN
Scottish Premier League Kicks
4.45am-5.15am ESPN Game of
the Week
LIVING
7pm Four Weddings US 8pm
Psychic Sally 9pm Ghost
Whisperer 10pm CSI: Miami
11pm Criminal Minds 12am CSI:
CSI 2am Medium 3am Charmed
3.50am Girls of the Playboy
Mansion 4.40am Make Me a
Supermodel US 5.30am-6am
Home Shopping
BBC THREE
7pm Great TV Mistakes 8pm
Don’t Tell the Bride 9pm FILM
Serendipity 2001. 10.25pm
Family Guy 11.10pm American
Dad! 11.55pm Ideal 12.25am
Him and Her 12.55am The Real
Hustle 1.25am Great TV
Mistakes 2.25am Ideal 2.55am
Him and Her 3.25am The Real
Hustle 3.55am-4.55am Don’t
Tell the Bride
7pm Hollyoaks 7.30pm Friends 5.30am-6am How Does That
9pm Ugly Betty 10pm FILM Work?
Clueless 1995. 12am RuPaul’s
Drag Race 1am Scrubs 1.55am
DISCOVERY HOME &
Joan of Arcadia 3.20am HEALTH
RuPaul’s Drag Race 4.05am 7pm Multiple Mums 8pm The LIVE UEFA CHAMPIONS LEAGUE
Samantha Who? 4.30am The Real Life Thumbelina 9pm ITV1, 7.30PM
Hills 4.50am-6am Switched Hospital Sydney 10pm Untold Arsenal v SC Braga (Kick-off 7.45pm).
Stories of the ER 11pm The Adrian Chiles presents all the action
HISTORY Trauma Team 12am Hospital from the Emirates Stadium, as both
7pm How the Earth Was Made Sydney 1am Untold Stories of sides play their opening Group H match.
8pm Mega Movers 9pm Ax the ER 2am The Trauma Team
Men 10pm Sliced 11pm Mega 3am The Real Life Thumbelina
Disasters 12am Ax Men 1am 4am A Baby Story 5am-6am
The Lost Evidence 2am How the Bringing Home Baby
Earth Was Made 3am SAS
4am-5am The Universe SKY1
8pm Vet Adventures 9pm Must
DISCOVERY Be the Music 10.15pm Must Be
8pm How Do They Do It? the Music – Meet the Finalists
8.30pm How It’s Made 9pm 11pm An Idiot Abroad 11.30pm
Man on Earth 10pm The 9/11 Michael Jackson’s Private Home
Faker 11pm 9/11: After the Movies 12.30am Road Wars GRAND DESIGNS
Towers Fell 12am Bear Grylls 1.25am Night Cops 2.15am UK CHANNEL4, 9PM
1am Deadliest Catch Border Force 3.05am Oops TV New series. Kevin McCloud follows the
2am Chris Barrie’s Massive 3.30am The 4400 4.20am progress of an architectural designer
Engines 3am Top Tens 3.50am Crash Test Dummies 5.10am- and his wife as they try to create their
Special Forces Heroes 6am Sell Me the Answer dream home.

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

QUICK CROSSWORD
    

SUDOKU KAKURO
16 34 15 8 41 12 30 
13 20
14  
35 9
Place the numbers from 1 to 9 in each empty cell so that each 24 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 12 22
38
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 12 29
  
above or to the left of it. 10
You can only use the digits 1-9 17 11
    and you must not use the
26 38
34  
same digit twice in a block. 15
   The same digit may occur 24 22
10 27
   more than once in a row or
column, but it must be in a
28
8 21
15
   
25 6
    separate block.
9 
11 34
 
6 11

    ACROSS DOWN
1 Cramp (5) 1 Small branch (5)
  
   WORDWHEEL O T
3 Savoury jelly (5)
7 Tubular wind
instrument (4)
2 One who wastes
money (11)
3 Assistance (3)
Using only the letters in the Wordwheel, you have
    ten minutes to find as many words as possible,
B E 8 Jolly ___, pirates’ 4 Interactive program
flag (5) enabling a user to
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters B 9 Plays, theatre (5) lay out financial data
on a screen (11)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N S 11 Britain’s largest
bird of prey (6,5) 5 Popular vegetable (3)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
A R 14 Swimming 6 Discontinue (5)
costume (7,4) 10 Asinine, silly (5)
QUICK CROSSWORD 9 7 6 8 4 8 7 9 16 Coil of knitting wool (5) 12 Female reproductive
& $ % ( 5 & ( / / 6
8 6 2 1 1 6 2 3 SUDOKU          19 Birthplace of cells (3)
9 4 9 8
8 ; + , &          Mohammed (5) 13 Hawaiian garland
2 3 1 5 2 4 3 1
) / $ 7 7 5 ( 0 2 5          20 At a great distance (4) of flowers (3)
) / 2 3 , 2 $ 9 8 3 6 2 4 7 1 5
        
6 & $ / ( 6 / 8 0 3 9 8 7 21 Contaminated (5) 14 Assigned to a station (5)
        
% 5 2 7
& / $ : 6
6
( / , 7 (
9 5 4 8 1 3 6 2
5 1 2 7 1 8 4
7
9
WORDWHEEL          22 Collection of maps (5) 15 Snares (5)
8 6 8 1 $ 1 (          17 Listening organ (3)
% $ 7 0 $ 1 5 ( $ 5 7 9 2 1 The nine-letter word
9 3 7 8 1 7 3 2          18 Word indicating a
( ( ' & ,
was CREDULOUS         
' , 5 * ( & + $ ) ( 6 2 8 9 7 9 5 8 negative answer (3)
 Sport
I’ll never overtake Federer,
says US Open champ Nadal
US OPEN
2010
BY FRANK DALLERES
HE may be the newest member of a
select band of greats to have won all
four Grand Slam titles, but newly-
crowned US Open champion Rafael
Nadal does not even rate himself the
best player currently on the men’s
tour.
Of course, that is because Nadal
has the misfortune to be competing
in the same era as Roger Federer, win-
ner of 16 major tournaments to the
Strauss is definitely our man Cidermen top the table as
AT THE CREASE WITH
ANDY LLOYD
A
T last it seems Andrew Strauss
has silenced those critics who
still don’t believe he is the right
man to lead England into the
World Cup on the sub-continent next
year.
The England captain is at the very
top of his game and showed in his
century at Headingley that is equally
Spaniard’s nine, and to many
observers the finest player of all time.
Yet Nadal’s triumph at Flushing
Meadows late on Monday night – a
title-clinching 6-4, 5-7, 6-4, 6-2 defeat
of Novak Djokovic, underlined his sta-
tus as world No1 and strengthened
the argument that he has now
usurped Federer as the man to beat.
Not that the 24-year-old will coun-
tenance such talk.
“The titles say he’s much better
than me, so that’s true at the
moment. I think it will be true all my
life. For me, always Roger was an
example, especially because he
as comfortably in the one-day arena
than he is at Test level.
Strauss looks supremely confident
with bat in hand right now. He’s effi-
cient, good in the field and well
respected by his team-mates. Why on
earth wouldn’t you want him leading
from the front?
Sunday’s second one-dayer was the
best game we’ve seen all summer.
Pakistan batted well and fielded a lot
better, meaning England had to be on
the money to come through. That
bodes well for when they face tougher
opposition in Australia this winter.
Leading 2-0, England will be expect-
ed to wrap up the series, and comfort-
ably, but I wouldn’t be surprised if the
word ‘ruthless’ is used in the dressing
room for the third one-day at the Oval
on Friday.
improved during all his career,” said
Nadal.
“So I try to copy this and I know
Roger and me are different, much dif-
ferent styles. Being better than Roger
– I don’t think it’s the right moment
to talk about that because I don’t
think that.”
Asked whether he could overhaul
Federer’s tally of 16 Grand Slams,
Nadal added: “It’s very far. For me, it’s
too far to think about that. I think
talk about if I am better or worse
than Roger is stupid.”
Federer’s grace and unflappable
temperament on court are in direct
This is also the final week of the
county season and what a shame that
the weather could play a part in deter-
mining the key issues. Your heart
must go out for Nottinghamshire who
now need two positive days at Old
Trafford to hold off Somerset and pre-
serve their lead at the top.
Credit to the Cidermen though,
who, incredibly, are searching for
their first County Championship title.
I remember playing against the
likes of Viv Richards, Joel Garner and
Ian Botham all in the same team –
and even they couldn’t bring title suc-
cess to Taunton.
Marcus Trescothick’s got a great set-
up down there in the west country
and if they hold on to the lead they
currently hold, they’ll be popular
champions.
“THAT IS QUITE A
GOOD TEAM OUT”
GUNNERS BOSS WENGER
BEMOANS HIS LENGTHY
INJURY LIST: P35
Nadal’s victory
over Djokovic in
Monday’s US Open
final took his tally
of Grand Slam
wins to nine.
Picture: GETTY
THE TOP TWO | HEAD TO HEAD
FEDERER NADAL
29 Age 24
63 Titles 42
16 Slams 9 has poured cold water on suggestions
81 Win % 82
£37m Prize money £23m
CAREER SLAMS | THE SUPER 7
Fred Perry (GB) – 1933 - 1935
Don Budge (USA) – 1937 - 1938
Rod Laver (Aus) – 1960 - 1962
Roy Emerson (Aus) – 1961 - 1964
Andre Agassi (USA) – 1992 - 1999
Roger Federer (Swi) – 2003 - 2009
Rafael Nadal (Spa) – 2005 - 2010
contrast to Nadal’s feral, power-driv-
en game and ensure the Swiss will
always have his cheerleaders when
the two are compared.
But Djokovic knows who he rates
as the preeminent force in 2010, and
it is the man from manacor, Majorca,
who currently boasts the French
Open, Wimbledon and US Open
titles.
“He has the game now for each sur-
face and he has won each major,” said
the Serbian world No2. “He has
proven to the world that he’s the best
in this moment, so there is no ques-
tion about it.”
Notts are left frustrated
▲
COUNTY CRICKET
SOMERSET moved two points clear at
the top of the County Championship
as heavy rain continued to play havoc
with the final round of matches.
Former England opener Marcus
Trescothick smashed 75 as the
Cidermen picked up four bonus
points to leapfrog Nottinghamshire
in pursuit of a first-ever title.
Somerset finished the day on 226-4
after bowling Durham out for 286 at
the Riverside.
They took full advantage of Notts’
inactivity against Lancashire at Old
Trafford, where only 28 overs have
been possible in two days. The leaders
33
Henson deal
denied by
Wasps boss
Edwards
▲
RUGBY UNION
BY FRANK DALLERES
WASPS head coach Shaun Edwards
the club have struck a deal to sign
Wales centre Gavin Henson.
British and Irish Lions star Henson,
who is currently on a break from the
sport and competing in Strictly Come
Dancing, is said to have agreed to join
when he completes his run on the tel-
evision contest.
But Edwards dismissed his signing,
insisting that although he has not
played for them since March 2009,
Henson is still contracted to Ospreys
and therefore not in Wasps’ sights.
“He plays for Ospreys doesn’t he? So
it would be pretty hard to say you’ve
signed somebody who plays for some-
one else,” said Edwards. “Do you nego-
tiate with someone who is contracted
to another club? No. We have never.”
Emphasising that they would not
pay a transfer fee, he added: “We are
not in a position to do that. Our owner
has spent £4m up to the salary cap
and we are very grateful to him for
that. We are not in a position to pay
transfer fees for players.”
Henson has been on unpaid leave
from the Welsh side for more than a
year while he decided whether to
make his hiatus permanent.
But the 28-year-old is thought keen
to return to the game and stake a
claim for a place in the Wales squad
for next year’s World Cup finals.
His contract, which has a year left
to run, remains an obstacle but could
be broken if compensation were
agreed.
l Former Harlequins physio Steph
Brennan has been struck off by the
Health Professions Council for his role
in the Bloodgate scandal.
Brennan admitted to faking blood
injuries on five occasions, including
the infamous instance of Tom
Williams during a Heineken Cup
clash with Leinster in April 2009.
ended the day on 89-2.
Elsewhere, Dewald Nel halted
Yorkshire’s title assault with 6-62 as
relegation-threatened Kent fought
back at Headingley. The Tykes were
dismissed for 261. Kent then rallied to
216-6 in reply.
Fellow strugglers Warwickshire
finished on 29-0 in response to
Hampshire’s 217.
Matthew Hoggard took 5-48 as
Leicestershire made one last push
towards promotion to division one
against Northamptonshire.
Second place Glamorgan were frus-
trated by the weather as rain washed
out day two of their match against
Derbyshire at Cardiff.
 34 Sport | Football CITYA.M. 15 SEPTEMBER 2010

Results
UEFA CHAMPIONS LEAGUE GROUP A
FC Twente ....................(2) 2 Inter Milan .......................(2) 2
Janssen 20, Milito 31 (og) Sneijder 13, Eto'o 41
Att: 20,000
Redknapp in a
rage as Spurs
Werder Bremen........(1) 2 Tottenham.........................(2) 2
Hugo Almeida 43, Marin 47 Pasanen 12 (og), Crouch 18
Att: 40,000
P W D L F A GD Pts
FC Twente 1 0 1 0 2 2 0 1
Inter Milan 1 0 1 0 2 2 0 1
Tottenham 1 0 1 0 2 2 0 1

let slip a Euro

Werder Bremen 1 0 1 0 2 2 0 1
GROUP B
Benfica............................(1) 2 Hapoel Tel-Aviv..............(0) 0
Luisao 21
Cardozo 69 Att: 35,125
Lyon...................................(1) 1 Schalke 04........................(0) 0
Howedes 21 (og) Att: 36,000

advantage
P W D L F A GD Pts
Benfica 1 1 0 0 2 0 2 3
Lyon 1 1 0 0 1 0 1 3
Schalke 04 1 0 0 1 0 1 -1 0
Hapoel Tel-Aviv 1 0 0 1 0 2 -2 0
GROUP C
Bursaspor ....................(0) 0 Valencia ..............................(2) 4
Costa 16, Aduriz 41
Att: 25,000 Pablo 68, Soldado 76
Man Utd.........................(0) 0 Rangers...............................(0) 0
something from the game despite

Valencia
P W D L F A GD Pts
1 1 0 0 4 0
Att: 74,408

4 3
WERDER BREMEN 2 clinching a first Champions League
point. “What lessons can I learn
Man Utd 1 0 1 0 0 0 0 1 because they score? What can I do?”
Rangers
Bursaspor
1 0 1 0 0
1 0 0 1 0
0
4 -4 0
0 1
TOTTENHAM 2 Redknapp raged.
“How can they learn lessons? We’re
GROUP D
Barcelona .....................(3) 5 Panathinaikos .................(1) 1 always talking about lessons. Did you
▲

Messi 22, 45, Villa 33 Govou 20 CHAMPIONS LEAGUE learn a lesson? Was it a lesson in
Pedro 78, Dani Alves 90 Att: 90,000 BY JON COUCH Champions League football? No, it’s a
FC Copenhagen........(0) 1 Rubin Kazan.....................(0) 0 game of football. We’re 2-0 up;
Ndoye 87 Att: 33,000
P W D L F A GD Pts HARRY REDKNAPP last night lashed they’ve got a goal out of nothing – it
Barcelona 1 1 0 0 5 1 4 3 out at suggestions his Tottenham side happens. It could happen at Hackney
FC Copenhagen 1 1 0 0 1 0 1 3 had been taught a Champions League Marshes on Saturday afternoon.
Rubin Kazan 1 0 0 1 0 1 -1 0 lesson despite throwing away a two- “We went away to play Young Boys,
Panathinaikos 1 0 0 1 1 5 -4 0
goal lead in their Group A opener we went 3-0 down. We came back and
NPOWER CHAMPIONSHIP
with Werder Bremen. got two goals back that won the tie Crouch is
Barnsley.........................(1) 5 Leeds......................................(1) 2 congratulated
O'Connor 42, O'Brien 49 Howson 3, Somma 86 Spurs threatened to rack up a con- for us. It happens in football. If we
Arismendi 65, Collins 82 (og) vincing victory after a Petri Pasanen play like that every game, we won’t after scoring
Hammill 83 Att: 20,309 Tottenham’s
own goal and a Peter Crouch header go too far wrong.”
Bristol City..................(0) 0 Watford ...............................(1) 2 second.
Att: 13,998 Sordell 3, Graham 47
had put them in control. Redknapp had vowed to be more Picture: PA
Crystal Palace............(1) 4 Portsmouth.......................(1) 1 But they were made to pay for a loss cautious away from home after their
Vaughan 14, 55, 59 Kitson 24 of concentration when Hugo Almeida qualifying scare by Young Boys, but
Danns 81 (pen) Att: 14,219 halved the arrears two minutes before you wouldn’t have known it as his Six minutes later, Spurs were in 3-0 as Spurs piled forward – and it
Doncaster .....................(1) 3 Norwich ..............................(0) 1
Coppinger 14, 50, 86 R Martin 64; Att: 9,314
half-time before Marko Marin levelled side took the game to their hosts from dreamland when surprise starter proved costly when Almeida headed
Hull.....................................(1) 2 Derby ....................................(0) 0 a minute into the re-start. the off. Just 12 minutes in, Benoit Jermaine Jenas fed Rafael van der home to make it 2-1.
Ayala 43, Koren 82 Att: 19,714 Both Tottenham and Redknapp are Assou-Ekotto’s brilliant ball released Vaart with a fine volleyed pass on the Marin’s low skidding drive restored
Ipswich..........................(0) 0 QPR.........................................(2) 3 novices at this level, but the Spurs Gareth Bale down the left and his low left and the Dutchman picked out parity, but Spurs might have nicked it
Mackie 31, 42
Att: 19,931 Helguson 68 (pen) boss snapped angrily to reporters’ cross was turned in by Petri Pasanen Crouch to head past Tim Wiese. near the end when Bale’s tantalising
Leicester.......................(0) 2 Cardiff ..................................(1) 1 suggestions that his side could learn under pressure from Crouch. Bale twice could have then made it cross just eluded Crouch.
King 51, 68 Naylor 26
Att: 20,510
Middlesbrough.........(0) 2 Burnley................................(0) 1

Valencia injury caps bad night for United

Kink 79, 90 Bikey 65; Att: 15,033
Millwall..........................(0) 0 Reading...............................(0) 0
Att: 11,061
Preston ...........................(1) 1 Nottm For ..........................(0) 2
Parkin 42 McGugan 68, 81; Att: 9,779
Sheff Utd......................(0) 0 Scunthorpe .......................(1) 4
Dagnall 33, 73, Mirfin 63
Att: 19,390 Woolford 90
Swansea ........................(1) 2 Coventry ............................(0) 1 Valencia faces a
Pratley 19
Sinclair 47
P W D L F A GD Pts
Turner 56
Att: 12,411
MANCHESTER UTD 0 lengthy lay-off after
suffering a suspect-
QPR 6 5 1 0 17 2 15 16 ed fractured ankle.
Cardiff
Millwall
6 4 1 1 12 4
6 3 2 1 12 5
8 13
7 11
RANGERS 0 Picture: PA
Doncaster 6 3 2 1 11 9 2 11
Ipswich 6 3 2 1 8 6 2 11
▲

Burnley 6 3 1 2 10 7 3 10 CHAMPIONS LEAGUE

Barnsley 6 3 1 2 12 11 1 10
Norwich 6 3 1 2 9 8 1 10 BY JON COUCH
Leeds 6 3 1 2 10 10 0 10
Scunthorpe 6 3 0 3 9 6 3 9 SIR ALEX FERGUSON suffered a
Reading 6 2 3 1 8 5 3 9 Champions League double whammy
Watford 6 2 3 1 9 7 2 9 after lacklustre Manchester United
Swansea 6 3 0 3 8 7 1 9
Coventry 6 2 2 2 9 9 0 8 were held to a goalless draw by
Nottm For 6 1 4 1 6 6 0 7 Rangers in a match marred by a seri-
Hull 6 2 1 3 5 9 -4 7 ous injury to Antonio Valencia.
Middlesbro' 6 2 1 3 4 9 -5 7 Resolute Rangers showed great
Sheff Utd 6 2 1 3 3 9 -6 7
Crystal Pal 6 2 0 4 8 12 -4 6 resistance to shut out a makeshift
Leicester 6 1 2 3 6 10 -4 5 United line-up, which showed 10
Bristol City 6 1 2 3 6 11 -5 5 changes from the side held at Everton
Derby 6 1 1 4 6 10 -4 4 on Saturday.
Preston 6 1 0 5 5 13 -8 3
Portsmouth 6 0 2 4 2 10 -8 2 It capped a frustrating night for the
2008 champions, who saw Valencia
TODAY’S DIARY carried off with a suspected fractured
(7.45pm unless stated)
ankle midway through the second
UEFA Champions Lge half following an innocuous sliding
Group E tackle from Kirk Broadfoot.
Bayern Munich v Roma ............................................................................................ “He has gone to hospital. It looks as
CFR Cluj-Napoca v Basle.......................................................................................... if it is a dislocation and a fracture,”
Group F Ferguson admitted. “It’s a bad one, it
MSK Zilina v Chelsea ................................................................................................
Marseille v Spartak Moscow.................................................................................. will keep him out for a long time. He
Group G seemed to dig his toe in the turf.”
AC Milan v Auxerre.................................................................................................... Wayne Rooney was recalled to the
Real Madrid v Ajax .................................................................................................... starting line-up, but barely got a sniff
Group H as Walter Smith’s game plan to missed the target as the Scottish European campaign. against Chelsea in the Charity
Arsenal v Braga .......................................................................................................... employ a stubborn rearguard suc- champions held firm. Ferguson later defended his deci- (Community) Shield. It’s a terrific
Shakhtar Donetsk v Partizan Belgrade..............................................................
npower Football League One ceeded in limiting United to half England captain Rio Ferdinand was sion to field a weakened team, squad of players we have and there
Milton Keynes Dons v Southampton .................................................................. chances despite dominating the pos- also making his first start for four adding: “The criticism will be why was no problem playing them.
session. months after his knee ligament didn’t I play a stronger team, I think I “They should have won that game,
SPORTS EDITOR JON COUCH Javier Hernandez headed just wide injury, but not even he could inspire played a very strong team. but give credit to Rangers, their sys-
email sport@cityam.com early on, while Darron Gibson twice United to a winning start to their “People forget eight of them played tem is very difficult to break down.”
CITYA.M. 15 SEPTEMBER 2010 Sport | Football 35

Holders Inter Terry’s back as Carlo names his charges

are held but while captain John Terry has shaken Slovakian rookies lightly.

Barca cruise MSK ZILINA off a rib injury and is also named.
The Blues are, however, without
Frank Lampard, who is still out with a
“We score a lot of goals, we started
well this season but you have to pay
attention to every game,” he added.
CHELSEA hernia problem, while Didier Drogba “We are here to win because we want
CHAMPIONS Sky Sports 2, ko 7.45pm
is suspended and Ashley Cole rested.
“Terry has no problem to play
to start this season well. Tomorrow we
have to keep attention, stay focused.
LEAGUE 2010-11 tomorrow, he is fit, he trained yester- “Our aim is to win this group but it

▲
CHAMPIONS LEAGUE
BY FRANK DALLERES day without problems so for this rea- will not be easy. Every team has a
BY JON COUCH
son he is ready to play tomorrow,” quality and tomorrow Zilina can
HOLDERS Inter Milan opened the CHELSEA coach Carlo Ancelotti last Ancelotti said. “The team will be show fantastic motivation because
defence of their Champions League night took the unusual step of Cech, Ivanovic, Alex, Terry, Zhirkov, for them it is an important game.
title with an unconvincing 2-2 draw announcing his starting line-up 24 Benayoun, Essien, Mikel, Malouda, “Zilina is a good team. I saw the
at FC Twente. hours before tonight’s Champions Anelka and Sturridge.” game against Sparta Prague, they
Wesley Sneijder put Rafael League clash with MSK Zilina. But despite handing rare starts to deserved to move on. They have very
Benitez’s side in front after 13 min- The Italian says he will hand first his fringe stars, Ancelotti has warned good organisation defensively and
utes but the Dutch rookies fought starts of the season to Yossi Benyoun, his side against complacency and ability up front and we have to pay
back through Theo Jansson and a Yuri Zhirkov and Daniel Sturridge, insists he will not be taking the attention to this.”
Diego Milito own goal.
Inter, however, restored parity
through Samuel Eto’o to ensure
Group A remained in deadlock.
Barcelona also had to come from
behind, but they went on to record a
thumping 5-1 win over Panathinaikos.
The Greek side took a shock lead
through Sidney Govou but a brace
from Lionel Messi and goals from
David Villa, Pedro and Dani Alves
capped a comfortable night.
The other game in Group D saw
Copenhagen beat Rubin Kazan 1-0.
Valencia were also winners, beating
Bursaspor 4-0 away with Ricardo
Costa, Aritz Aduriz, Hernandez Pablo
and Roberto Soldado all scoring.
In Group B, Benfica beat Hapoel Tel-
Aviv 2-0, while Lyon won 1-0 against
Schalke after Benedikt Howedes
scored an own goal and was sent off.

Arsenal depleted
as Diaby is ruled
out indefinitely
already out. Now Vermaelen and
ARSENAL Diaby, so that is quite a good team
out.”
This evening’s visitors to the
BRAGA Emirates Stadium, Braga, may be
ITV 1, ko 7.45pm newcomers to the Champions League
but Wenger is mindful of underesti-
mating a team who have already out-
▲

CHAMPIONS LEAGUE
BY FRANK DALLERES muscled more prestigious names on
their route.
ARSENAL manager Arsene Wenger “What impresses me is that they
admits he is cursing the loss of finished in front of Porto,” said
several key players as he prepares to Wenger of last year’s Portuguese run-
launch yet another tilt at European ners-up. “Also in the qualifying round
success. they knocked Sevilla out, that helps
Midfielder Abou Diaby, inset, and us to be on our
defender Thomas Vermaelen are the toes. They have
latest names on a Gunners’ injury list a strong
that is already mounting just a few Brazilian
weeks into the season. influence in
Forwards Robin van Persie and their team,
Theo Walcott are also recent casual- are physi-
ties, while Nicklas Bendtner and cally strong
Aaron Ramsey are longer-term absen- and are well
tees. organised.”
“Diaby is out with an ankle prob-
lem following the tackle from
[Bolton’s Paul] Robinson and I do not
know for how long,” said Wenger, has
taken Arsenal beyond the group
stage in each of the last 10 years.
“He will not play [against Braga
tonight] and certainly not at the
weekend [at Sunderland]. Thomas
Vermaelen is out as well with an
achilles problem coming back
from Belgium, so we do not
have him either.
“We have Walcott, Van App Store is a service mark of Apple Inc
Persie, Bendtner and Ramsey
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