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Issue 1,229 Tuesday 28 September 2010




THE International Monetary Fund (IMF) gave
its full backing to the coalition govern-
ment’s deficit reduction plans yesterday,
announcing that the UK economy is on the
mend after the longest and deepest reces-
sion of the post-war era.
In its annual health check of the UK econ-
omy the IMF said the recovery was under-
way, unemployment had stabilised and the
health of the financial sector had improved.
Calling the government’s deficit reduc-
tion plan “appropriately ambitious” the IMF
report said: “The government’s strong and
credible multi-year fiscal deficit reduction
plan is essential to ensure debt sustainabili-
ty.” It added the plan “greatly reduces the
risk of a costly loss of confidence in public
finances and supports a balanced recovery.”
Fiscal tightening would dampen short-
term growth, said the report, but not stop it
as other sectors of the economy emerged as
drivers of recovery, supported by continued
monetary stimulus.
The backing of the IMF will come as a
huge vindication of chancellor George
Osborne’s proposals to cut public spending
by £83bn in order to get the £155bn budget
deficit under control. The chancellor will
reveal where the cuts will come when he
announces the results of the comprehensive
spending review on 20 October. Chancellor George Osborne’s
The chancellor welcomed the IMF report deficit reduction plans were
saying: “They have made it pretty clear that called “strong and credible”
the deficit reduction plan that we have set by the IMF yesterday
out is essential for bringing about sustain- Picture: GETTY
ability in our budget. It reminds us that if we
divert from the course the new government
has set out then we really will be heading
back into a disastrous period of economic cautious pace in a way that is going to help Inflation should also fall back to the govern-
instability for Britain.” our economy, not hinder it”. ment’s two per cent target by early 2012.
The report puts the new Labour leader, Ed But while there were risks to economic In another boost for the government the
Miliband, under immediate pressure ahead recovery given the “continued fragility of IMF said financial sector reform ”would be
of his conference speech today. Earlier this confidence and “signs of renewed housing crucial to move to a safer system that fea-
week the Labour leader described the gov- market weakness,” the IMF predicted GDP tured stronger capital and liquidity buffers,
ernment’s policies as “economically danger- growth would be two per cent in 2011, rising supported by tighter regulation and supervi-
ous” and called for deficit reduction “at a gradually to 2.5 per cent the following year. sion.” ALLISTER HEATH: P2


BANKING arm. Those jobs losses were described by wealth management division which

BY STEVE DINNEEN & MATTHEW WEST Unite, which represents staff at the bank as includes Coutts, the bankers to the Queen,
“horrific”. National officer Rob MacGregor and Adam & Co. In May it said 2,600 posi-
ROYAL Bank of Scotland (RBS) will shed up to said it would be particularly difficult for tions would go at its insurance and retail
500 jobs from its investment banking arm, it staff to accept as RBS had decided to move banking arms.
announced to staff yesterday. some of the jobs abroad. An RBS spokesman said: “We continue to
City A.M. understands the redundancies – At the time he said: “Just three weeks ago make efficiencies across our business to
most of which will affect London-based staff were boosted to hear of the £1.1bn half ensure that we have the right people and
employees – will be in the bank’s backroom year profit yet today thousands of them are resources in place to meet our client needs.
departments with its IT and marketing told that they have no future at the bank. We will do all we can to support our staff,
departments likely to be most affected . Unite is appalled that this 84 per cent tax- offer redeployment opportunities wherever
Client-facing staff are thought to be safe payer-supported institution has since 2009 – possible and keep compulsory redundancies
for the time being. under the banner of a strategic review – cut to an absolute minimum.”
The news comes less than a month after 21,500 staff.”
RBS announced that up to 3,500 support Just three months earlier RBS announced Certified Distribution
staff jobs will go from its consumer banking redundancies among back-office staff in its 02/08/10 – 29/08/10 is 93,782

FTSE 100 ▼ 5,573.42 -25.06 DOW ▼ 10,812.04 -48.22 NASDAQ ▼ 2,369.77 -11.45 £/$ ▼ 1.58 -0.01 £/¤ ▲ 1.18 +0.01 ¤/$ ▼ 1.34 -0.01
2 News CITYA.M. 28 SEPTEMBER 2010

IMF is right – but savings crisis looms NEWS | IN BRIEF

Rolls-Royce sued over patent
In a continuing battle over engine part
designs, jet engine-maker Pratt &
ery continues strongly. More emphasis £141,000. Only the top five per cent of Second, the corporate exodus. Whitney yesterday sued Rolls Royce,
should be given to reducing public sec- households have any substantial Wolseley, a heating and plumbing accusing the British company of mis-
tor compensation wage premia and amount of liquid assets – and even firm with a turnover of £13.2bn, will leading the US Patent and Trademark
achieving savings in benefits through then only the truly rich have anything adopt a Jersey structure and base itself Office to obtain a patent. Pratt &
better targeting, it argues, policies like enough. Someone aged 54 and in Switzerland for tax reasons. The Whitney, a subsidiary of United
that will be music to Osborne’s ears as earning £150,000 with £200-£500,000 move will save it millions of pounds Technologies, said in its lawsuit that
he prepares for next week’s party con- in liquid wealth will only take home and lower its tax rate substantially. Rolls-Royce’s patent is invalid and unen-
ference in Birmingham. an annual retirement income of The result for Britain will be an even forceable. The East Hartford-based com-
EDITOR’S LETTER But while the IMF is right to high- £20,000-£31,000. higher deficit, fewer jobs and less pany accused Rolls Royce of unlawfully
light Britain’s economic recovery and The study demolishes the myth that investment. The government is con- using its patent and taking other actions
ALLISTER HEATH cyclical upswing, many longer-term “my house is my pension”. sulting on a reform of the tax system to harm Pratt & Whitney.
challenges remain for Britain. Two in Downsizing won’t unlock enough but UK Plc has run out of patience –
GEORGE OSBORNE was a happy man particular stole the limelight yester- cash for the majority of the popula- understandably, given the growing Crossrail plans efficiencies
yesterday, courtesy of the usually dour day. First, pensions. According to a tion; most would only have £30,000 anti-capitalist mood music. Britain is Crossrail set out a series of cost savings
International Monetary Fund (IMF), study by A.T. Kearney, the manage- left in equity, after stamp duty and the only country in the world which to its £16bn budget yesterday but said
which released an unusually effusive ment consultancy, 95 per cent of other costs. The government’s Nest appears actively to want to chase away there would be no cuts in its planned
and gushing endorsement of the coali- Britons will find themselves having to scheme to auto-enrol those on lower its multinationals. stations or branches. Instead efficien-
tion’s macroeconomic policies. downgrade their lifestyle significantly incomes into approved pension plans So the IMF is largely right about the cies would be found by making use of
The IMF is upbeat for 2011, predict- or be plunged below the poverty line will be a case of too little, too late. short-term – but Britain’s longer-term existing train designs, rather than build-
ing growth of two per cent. It makes it in retirement. Charlie Bean, the Bank of England’s prospects remain dire. Osborne is ing new carriages from scratch as origi-
clear that slashing the deficit and con- The bottom 88 per cent of British deputy governor, was being too short- understandably concerned primarily nally planned. The latest cuts are part of
trolling public spending is the only households own only £7,000 on aver- termist when he called yesterday on with fire-fighting right now, but he Crossrail's ongoing review of costs on
way forward to avoid a sovereign debt age in liquid assets, with many relying consumers to save less and spend will eventually also have to address the line, which will run for more than 73
crisis. While squeezing state spending on downsizing their homes when more – low savings are a much greater those extraordinarily difficult issues if miles from Maidenhead and Heathrow in
will slow growth, the IMF is confident they get older. The next four per cent threat to the UK’s prosperity than a he truly wishes to make his mark as a the west, through new, twin-bore 13-
that liberating resources for the pri- own an average of just £71,000, with couple of years of weak consumer reforming chancellor. mile tunnels under central London to
vate sector will ensure that the recov- the next 2.8 per cent an average of spending and sluggish GDP growth. Shenfield and Abbey Wood in the east.

7th Floor, Centurion House,

24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Moody’s adds to euro woes
Editorial EUROZONE around our necks,” says Bill Blain, a

Editor Allister Heath BY HARRY BANKS fixed income trader at Matrix in

Deputy Editor David Hellier London.
News Editor Ben Griffiths CREDIT ratings agency Moody’s Meanwhile, in another part of the
Night Editor Katie Hope slashed its ratings on Anglo Irish fragile Eurozone area, the OECD rec-
Associate Editor David Crow Bank’s lower-grade debt yesterday, ommended that Portugal swiftly con-
Business Features Editor Marc Sidwell unnerving investors as Dublin tots up solidate public finances to restore
Lifestyle Editor Zoe Strimpel the final cost of rescuing a lender investor confidence and stand ready to
Art Director Darren Soulsby whose soured loans have crippled the raise value-added and property taxes if
Pictures Alex Ridley country’s economy. necessary. The OECD warned that the
Yields on 10-year government country’s high sovereign debt spreads
Commercial bonds increased to 430 points above could put recovery at risk, and urged
Sales Director Jeremy Slattery the equivalent German securities as labour market reforms to boost com-
Commercial Director Harry Owen investors fretted over a writedown of petitiveness. “I am confident Portugal
Head of Distribution Nick Owen debt. will weather this crisis,” OECD
Moody’s cut the nationalised Secretary-General Angel Gurria said.
Distribution helpline bank’s senior unsecured debt by The OECD’s warning came as the
If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email three notches to Baa3 -- just one notch Financial Stability Board said yester- above junk status -- citing a small risk day that the global financial system
the government would not continue Irish finance minister Brian Lenihan says its “unthinkable” Ireland will default on debt remains vulnerable because of contin-
Editorial Statement to support that class of debt, the uing fiscal tensions in developed
This newspaper adheres to the system of agency said. It slashed Anglo Irish’s front of investor concerns about the Finance minister Brian Lenihan economies and fragile banks, and
self-regulation overseen by the Press Complaints subordinated debt by six notches to sustainability of sovereign debt in the has said it is unthinkable that Ireland warned that these risks could be
Commission. The PCC takes complaints about the Caa1. Eurozone. would default on senior debt but, in amplified by weakening economic
editorial content of publications under the Editor’s
Code of Practice, a copy of which can be found at The steadily mounting scale of the The government has previously the absence of such assurances given conditions. “The potential for adverse bank’s rescue has put massive pres- indicated the bailout of Anglo Irish on subordinated paper, analysts say feedback loops between weak
Printed by Newsfax International,
sure on already strained public will cost around €25bn (£21.3bn), those might face a buyback at well economies, fragile banking systems
Beam Reach 5 Business Park, finances, propelling the former although Standard & Poor’s has esti- below par. and fiscal strains remain significant,”
Marsh Way, Rainham, Essex, RM13 8RS “Celtic Tiger” economy to the fore- mated it could be as high as €35bn. “Anglo Irish is the millstone it said.


the move.


ALERT The German government believes it VINCE CABLE GULF OF MEXICO WILL BE SLOW Large corporations and other employ-
An “interntaional currency war” has could take until spring for the trou- The man who runs one of the City’s BP has admitted that a resumption of ers are turning up the heat on the UK
broken out according to Guido bled publicly owned Landesbanken to most respected institutional investors deepwater drilling in the Gulf of government as it finalises new immi-
Mantega, Brazil’s finance minister, as agree the first steps of a reorganisa- has hit back at Vince Cable, describ- Mexico is likely to be slow, delivering a gration rules that industry says
governments around the world com- tion after the global financial melt- ing his attack on shareholder short- blow to the thousands in the region would restrict their ability to recruit
compete to power their exhange rates down and Eurozone crisis. Steffen termism as “disappointing”. Keith whose livelihoods depend on it. It’s key talent. Border authorities in June
to boost competiveness. Mantega’s Kampete, deputy finance minister Skeoch, chief executive of Standard likely to be “a phased restart,” Doug introduced a temporary cap on how
comments in Sao Paulo follow a said consolidation was vital to “win Life Investments, accused the Suttles, BP’s chief operating officer for many skilled and highly skilled work-
series of interventions by central back the confidence” of the markets. Business Secretary of ignoring “all exploration and production,” told the ers employers can hire from outside
banks in Japan, South Korea and “I don’t think we’ll get anythinng the good work done” by investors in Presidential commission investigating the European Union. In the coming
Taiwan in an effort to make their cur- definitive by year’s end. But we’ll see improving the way they hold compa- the spill. months the government is expected
rencies cheaper. the contours by spring 2011,” he said. nies to account in the past year. to announce the permanent rules
TOPSHOP TO OPEN SECOND US STORE that will take effect in April.
Carillion has successfully persuaded AIG will keep a minimum stake of 30 Procter & Gamble has pledged to on its second US shop, in Chicago. The Ford still expects to make a “solid
the body responsible for deciding the per cent in AIA for at least a year after power its factories with 100 per cent 35,000 sq ft store on the city’s North profit” this year and plans to invest
sectors in which listed companires its Asian businesses are listed in Hong renewable energy. The world’s largest Michigan Avenue will open in £1.5bn in the UK over the next five
are categorised to backtrack on a Kong next month. It will also be consumer products company also autumn 2011. He is also in talks to years, the car manufacturer's presi-
recent decision to reclassify it as a banned from selling any shares at all said it would use only renewable and open shops in Los Angeles and Las dent and chief executive Alan Mulally
constrution company. Carillion called for six months after the listing. The recycled materials in all its products Vegas, and is considering San said yesterday. He added he expects
on the Industry Cassification lock up will also apply to AIA itself and packaging and would report on Francisco. Topshop opened its first US the car manufacturer to post an
Benchmark committee to ‘correct’ and cornerstone investors. its progress annually. store – in New York – in 2009. improvement in performance in 2011.
CITYA.M. 28 SEPTEMBER 2010 News 3

Former US
JPM sets up Treasury chief
alternatives joins BA board

unit in the US

FORMER US Treasury secretary John
Snow, and Telefónica chairman César
Alierta, are to join the board of the
newly formed International Airlines
Group (IAG) as non-executive direc-
tors, it was announced yesterday.
The company, which is being

BANKING Mike Stewart, co-head of the invest- formed by the planned merger of
BY HARRY BANKS ment bank’s global emerging mar- British Airways and Iberia, will create
kets business, will run the new RIM founder Mike Lazaridis with the new Blackberry PlayBook Picture: REUTERS Europe’s second-largest airline by
JPMORGAN Chase is starting a new business, according to the memo. market value after Lufthansa. Under

RIM unveils Blackberry

alternatives unit in its asset manage- Stewart will work with Larry the rules of the merger, BA had to
ment business, formed from traders Unrein, head of private equity and nominate a Spaniard to the board,
who are no longer allowed to trade hedge funds within asset manage- Iberia had to choose a Briton and
for the bank’s own account under ment, in establishing the business. both had to pick someone who was

PlayBook as rival to iPad

new US rules, according to a company JPMorgan expects to complete the neither Spanish nor British.
memo. transition over several years, accord- Alierta and Snow, an appointee of
The fate of the JPMorgan traders ing to the memo. former US president George W. Bush,
has been up in the air as banks scram- Chief Executive Jamie Dimon had are two of four new faces on the 14-
ble to come to terms with the so- said earlier this month the bank member board of IAG, which will be
called Volcker rule restricting banks would remove some traders from its chaired by Antonio Vázquez, current
from betting with their own money, investment bank unit because of reg- TECHNOLOGY Shares of RIM jumped nearly two Iberia chairman.

among other regulatory changes. ulatory changes. BY MATTHEW WEST per cent to $49.29 in after hours trad- Willie Walsh, BA chief executive,
A person familiar with JPMorgan’s Dimon has complained about the ing following the announcement at will become chief executive of IAG.
changes said about 45 traders will scattershot nature of US financial RESEARCH in Motion (RIM) unveiled the company’s annual developers’ Patrick Cescau, former Unilever chief
move from its investment bank to a reform, which he says is making its own tablet computer to rival conference in San Francisco. executive and Kieran Poynter, former
new unit within its asset manage- banking businesses more complicat- Apple’s iPad yesterday. RIM expects to ship the device to chairman of PricewaterhouseCoopers
ment business. ed rather than improving the finan- The computer, named BlackBerry corporate customers and developers are the other two non-executive direc-
“We are confident that clients will cial system. PlayBook, has a seven-inch screen and in October. It will become commer- tors.
benefit from their investment experi- JPMorgan, the second-largest US dual facing cameras. cially available early in 2011. Last week the merger cleared a sig-
ence and insight,” wrote investment bank by assets, also expects revenues It is WiFi and Bluetooth enabled While yet to set an exact price RIM nificant hurdle when Iberia said it
bank and asset management heads to be hurt by new rules that limit the but needs to link with a BlackBerry said the PlayBook will fall in the had decided not to exercise its right
Jes Staley and Mary Erdoes in the charges it can apply to credit card and smartphone to access the mobile lower range of prices for consumer to cancel the deal over a BA employ-
memo to employees. current account customers. phone network. tablets already on the market. ees’ pensions deficit of £3.7bn.
4 Focus on Unilever CITYA.M. 28 SEPTEMBER 2010

This purchase makes financial sense

INVESTORS should keep their hair share is just two per cent, however, ing – acquisition.
on. Financially, this deal makes sense. although it does have a strong show-
Unilever’s $37.5bn-a-share offer, ing in North America, where it has 11 ANALYSIS l Unilever
which values Alberto Culver at per cent of the market compared to 1,950 p
around $3.6bn, is good value. The six per cent for Unilever. 27 Sep
offer, which is worth around 12 times Still, the North American strength
prospective earnings for 2011, is pret- belies an international weakness. 1,850
ty cheap when compared to similar Around 75 per cent of Alberto’s rev-
deals. enues come from more mature mar-
Which is just as well, because the kets. Hopefully Unilever will be able 1,750
deal – while sensible – is not going to to squeeze value from the acquisition
change the world. It will strengthen by using its strong emerging markets
Unilever’s number three position in network to distribute brands like VO5 1,650
the haircare market, but that’s about and TRESemme. 7 JJul 27 Jul 16 Aug 6 Sep 24 Sep
it. Procter & Gamble has a 23 per cent Savings of around €150m a year,
share of the global haircare space, while welcome, are hardly big news
compared to 18 per cent for L’Oreal
and 11 per cent for Unilever. Alberto’s
either. This is what Unilever does
best: a sensible – if somewhat bor-
Analysis by David Crow

Unilever boss
Paul Polman said
the personal care
sector is growing

Picture: GETTY

Unilever is
hoping for a
good hair day
unspecified cost savings.

BY STEVE DINNEEN Execution Noble called the deal
“more evidence of a strategically and
UNILEVER yesterday announced it financially sound re-investment phi-
will buy US hair and skin care special- losophy at Unilever” and Charles
ist Alberto Culver in a deal worth Stanley reiterated its “accumulate”
$3.7bn (£2.34bn). recommendation in the wake of the
The acquisition of the firm behind news.
household names such as V05 and The acquisition follows a yet-to-be
TRESemme marks the single biggest completed deal to buy Sara Lee’s
Unilever acquisition in almost a body care division for $1.3bn. The
decade. firm’s largest value acquisition was
The new brands will complement the massive $20.3bn acquisition of
Unilever’s existing portfolio, which Bestfoods in 2000.
includes Dove, Clear and Sunsilk in Chief executive Paul Polman said:
hair care, and Vaseline in skincare. It “Personal care is a strategic category
will also enhance Unilever’s presence for Unilever and growing rapidly.
in key emerging markets such as “Ten years ago it represented 20 per
Mexico. cent of our turnover; strong organic
Moreover, the deal will bolster growth has driven it to now reach
Unilever’s flagging hair care sales in over 30 per cent, with strong posi-
its core US market. In the last year tions in many of the emerging mar-
Alberto Culver generated sales of kets.”
$1.6bn and earnings of $250m. Unilever shares closed up 1.28 per
It is also likely to herald as-yet cent on the back of the news yesterday.

Unilever takeovers

Bestfoods Inmarko TIGI Sara Lee Alberto

$20.3bn $? haircare Bodycare Culver
$412m $1.3bn $3.7bn
2000 2008 2009 2010 2010
CITYA.M. 28 SEPTEMBER 2010 News 5

The new shape of business travel.

The resignation of star manager Gervais Williams has led to further changes at Gartmore

New setback
for Gartmore Speedy Boarding

FINANCIAL SERVICES of the trust’s issued share capital. If

BY STEVE DINNEEN they stay invested they will receive Add it to your reservation and you’ll get the pick of the seats.
shares in the Artemis fund at 98.5 per
EMBATTLED fund manager Gartmore cent of asset value.
suffered a fresh setback yesterday After GGO started its review of man-
when it lost the mandate to run a agement, 14 investment managers
£50m investment trust following the including Gartmore submitted propos-
resignation of a star manager. als. Artemis Alpha Trust said the
The Gartmore Growth Opportunities enlarged fund will be managed by John
fund (GGO), said it has reached agree- Dodd and Adrian Paterson.
ment in principle with Artemis Alpha Williams’s departure from Gartmore
Trust for a merger of the two compa- marked the latest in a succession of set-
nies’ assets. The proposal will be put to backs this year for the fund manager.
a shareholder vote in December. Star manager Guillaume Rambourg No hand We fly you to Change to an We charge Missed your flight
GGO said earlier this month it was quit in July to focus on a regulatory baggage weight main airports earlier flight you less home? Catch the
considering its management arrange- probe, having been suspended as part limit home for free next available
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ments after the resignation of smaller of an internal investigation which
companies manager Gervais Williams sparked heavy outflows of assets as
from Gartmore. clients took their money elsewhere.
Shareholders in GGO can opt for a The company’s shares have lost near-
cash exit at 95 per cent of asset value ly half their value since listing last
but that will be limited to 30 per cent December.

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6 News CITYA.M. 28 SEPTEMBER 2010

Wolseley boss Ian

Meakins says the
move to
Switzerland will
save the firm
£23m in tax

Wolseley blames UK
tax for Swiss move

Chief financial officer John it of £450m last financial year, it

BY MARION DAKERS Martin said: “It is 100 per cent the announced yesterday, driven by
CFC regime in the UK. It’s not very cost cutting. Revenue fell nine per
PLUMBING group Wolseley sparked helpful to Wolseley. The principle cent to £13.2bn.
talk of another exodus of firms reason for that is 81 per cent of our Wolseley added that Gareth
from the UK yesterday by announc- revenue is from outside the UK.” Davis, the former boss of Imperial
ing plans to move its base to The CBI called yesterday for the Tobacco, would succeed John
Switzerland for tax reasons. government to do more to keep Whybrow as chairman after the
The group said it expects to save companies here: “We hope the cor- annual shareholders meeting in
£23m a year by setting up a Swiss- porate tax roadmap due to be January.
based holding company, but announced in the autumn will pro- Shares closed down 0.65 per cent
stressed that it will continue to pay vide companies with greater clarity at £15.16 yesterday.
tax on its UK operations. on planned reforms.”
“Clearly if there hadn’t been the The government said it could ANALYSIS l Wolseley
difference in the tax rate we would- not comment on individual compa-
n’t have made this proposal,” chief nies, but a Treasury spokesperson 1,550 p 1,516.00
executive Ian Meakins said on a call said: “The Government is commit- 27 Sep
with journalists yesterday. ted to reform of the CFC rules and 4,150
The company spoke to the will introduce new rules in 2012.
Treasury and HMRC before making Any changes will deliver a more ter-
the decision. It blamed the move ritorial approach refocusing on 1,350

on controlled foreign companies artificially diverted UK profits and

(CFC) rules, which tax UK compa- exempting genuine commercial 1,250
nies for certain profit made activities.”
abroad. Wolseley made flat trading prof- 7 Jul 27 Jul 16 Aug 6 Sep 24 Sep


MEAN FOR WOLSELEY? Interviews by Marion Dakers


“ ”
Wolesley’s news has come out of the blue. But the question is whether it will make much difference to the compa-
ny; I think probably not. It's symptomatic of the tax situation in this country. Wolesley has the majority of its busi-
ness abroad, and it’s logical to move to benefit shareholders. It’s absolutely a part of an exodus to overseas.


“ ”
The move doesn’t really change the way we should look at the shares. It’s financial management rather than an
operational change; they will still have a sizeable plumbing business in the UK. For shareholders, it’s clearly a helpful
move, if an international company is in the position to do it. The results as a whole were largely as expected.


“ ”
It’s obviously a beneficial move for the company, though it does raise the broader question of whether companies
have the proper incentive to stay in the UK. The company’s performance has improved as the year has gone on, and
they have cut costs. The share price has gone up recently, and we saw some profit-taking after the announcement.”
CITYA.M. 28 SEPTEMBER 2010 News 7

Tax rules create a hole in

coalition plans for growth
unreasonable, given the 2006 rul- difficult for companies to wait for
ing of the European Court of much-needed reforms, especially if
Justice (ECJ) in a case involving at the end of the process they find
Cadbury Schweppes that UK CFC that changes are neutralised by the
rules restricted the right to free- desire to keep milking them for
dom of establishment. their money.
Unfortunately the ECJ argued that Britain needs growth, and com-
the rules could continue if they panies that locate themselves here
COMMENT were restricted to “wholly artifi- need the freedom to grow if they
cial” cases. Vodafone found itself at are not to move elsewhere. We
MARC SIDWELL the mercy of an unclear legal posi- need to remember the lessons of
tion on what constituted genuine nations that have lowered taxation

HE coalition is well aware of economic activity overseas. It is on the productive economy radical-
Britain’s problems with its scarcely a surprise that in the face ly and reaped great rewards. Angus
Controlled Foreign Company of such certain costs and uncertain Maddison’s 2003 research for the
(CFC) rules. George Osborne’s outcomes, companies with large OECD shows that from the 1950s to
June budget promised that the gov- overseas operations are moving. the 1990s, Hong Kong, with a 15
ernment was “committed to The coalition government finds per cent tax rate, grew by 800 per
reform”: new CFC rules are to be itself in a disastrous position, and cent while Britain, with a 98 per
legislated in the spring of 2012 and not entirely an inherited one. cent top rate in the 1970s and a 35
interim measures to improve the Despite fine words, plans for a per cent basic rate, grew by 175 per
current rules will be legislated in slow, careful review with full cent. Low tax regimes like
the spring of 2011. industry consultation were not just Switzerland dominate the list of
The CFC rules allow the UK to tax a matter of good practice. They are the wealthiest global jurisdictions,
the profits of some subsidiaries of also George Osborne’s attempt at according to World Bank figures.
UK firms that are resident in low- footdragging to maintain tax Light taxation drives growth and
tax jurisdictions. Wolseley is only receipts in the face of the vast gov- increases the pie from which tax
the latest company to be affected ernment deficit. That thinking is receipts are taken. The coalition
and to find the promised timetable clear in the promised review: the has apparently decided that if com-
for reform too slow. CFC rules have new rules promised for 2012 are panies are pressed artfully they
been a problem for years, with “to provide adequate protection of will still pay out as they used to. It
Vodafone’s decade-long legal battle the UK tax base”. is the difference between wasting
only ending this summer. But if our economic situation is time trying to find a better milk-
Vodafone agreed to pay £1.25bn hard on Britain’s government, it is maid instead of aiming to build a
after losing an appeal that the CFC harder still on private enterprise. bigger herd. Only a serious ambi-
rules should not apply to them Despite a nascent recovery, the eco- tion for growth can help Britain
under EU law. That case was not nomic environment remains too thrive in the hard years ahead.


Wolseley Switzerland was taxed in the UK at 34%, new tax 28% £23m a year saved
November 2010
Informa Switzerland 26 - 27%, new tax 26 - 27% £50m a year saved
May 2009
Ineos Switzerland tax rates unknown £100m a year saved
April 2010
WPP Ireland 25.3%, new tax 23.8% unknown amount saved
September 2008
Henderson Ireland 28%, new tax 20% unknown amount saved
August 2008
UBM Ireland 17%, basic new rate of 12.5% unknown amount saved
April 2008
Shire Ireland 22%, basic new rate of 12.5% unknown amount saved
April 2008

Tax Exodus: The companies which have lost

patience with waiting for a change in rules
WOLSELEY’S announcement yes- expect to save €450m (£390m) in Switzerland “does not seek to
terday has sparked fears in govern- tax over four years. impose tax on the unremitted
ment of a second wave of Many of the biggest US firms profits of subsidiary companies in
UK-based companies decamping operating in Europe, including other jurisdictions”.
to Switzerland as frustration Kraft and McDonald’s, which Its move follows similar deci-
grows with the long wait until moved its European headquarters sions from fellow publisher
2012 before the pledged improve- to Geneva, followed suit. United Business Media (UBM)
ments to Controlled Foreign Switzerland and its 26 which generates 85 per cent of its
Company (CFC) rules are unveiled. autonomous cantons have also earnings overseas and WPP, the
It was a row over profits gener- welcomed publishing and confer- advertising group, both of whom
ated overseas that prompted the ences group Informa – the profes- moved to Ireland.
first exodus of major businesses sional publisher behind Lloyd’s Ireland has proved a haven for
in 2008 with several high-profile List – which generates four fifths several companies keen to reduce
businesses quitting to take up res- of its earnings overseas. their tax bills, with Dublin’s 12.5
idence in low-tax havens. At the time, Informa said that per cent corporation tax rate
Ineos, the world’s third-largest Switzerland had “a less complex attracting pharmaceutical firm
chemicals group and the UK’s taxation system which offers Shire, engineering business
largest private company, moved to upfront certainty of treatment” Charter, Sir Martin Sorrell’s adver-
Switzerland in April this year and in a direct complaint about tising group WPP and the invest-
where it said the company could “double taxation” it said that ment firm Henderson.
8 News CITYA.M. 28 SEPTEMBER 2010

BoE says spend not save

British savers suffer poor returns on might be suffering now “there will be

their deposits following the Bank’s times in the future as there have been
BY MATTHEW WEST intervention in the financial crisis times in the past when they will be
THE deputy governor of the Bank of which have brought interest rates to doing very well out of the fact that
England called for Britain’s 22m their lowest level in history. interest rates are at a relatively high
savers to eat into their reserves and Bean said this was part of an level.”
spend more to help stimulate the “aggressive policy” designed to deal The deputy governor added it was
economy yesterday. with a “once-in-a-century” financial Bank policy to “encourage more
Charlie Bean said the BoE wanted crisis. spending” although he admitted the
households to spend more rather In an interview with Channel 4 BoE would prefer to see that in the
Charlie Bean says the Bank of England wants people to start spending than save. Bean’s comments come as News Bean added that while savers form of more business spending.

Eurozone Price of
lending up gold could
in August hit $1,500

LENDING in the Eurozone increased THE price of gold could reach record
in August by the fastest rate in more highs of up to $1,500 (£949) an ounce
than a year, the European Central in the next twelve months delegates
Bank (ECB) said yesterday. at the London Bullion Market
Loans to the private sector were 1.2 Association (LMBA) annual confer-
per cent higher in August than a year ence said yesterday.
earlier, the fifth monthly rise in a row The majority of delegates saw the
and the fastest growth since June last price of gold rising to $1,406 an ounce
year, the ECB said. by September next year but 32 per
Meanwhile, loans to companies cent of delegates believed the price
also rose in August but remained neg- could rise beyond that.
ative over the year down 1.1 per cent. The news came as spot gold hit a
The ECB stressed loans to compa- record $1,300 an ounce as an initially
nies typically lag the economic cycle weaker dollar and speculation that
but added it was keen to see a sus- the US Federal Reserve might further
tained resumption in lending to resort to quantitative easing to give
firms, especially after banks had ben- the economy a leg up, supported sen-
efitted from two years of cheap and timent.
generous liquidity supply. The Fed said last week it was pre-
Loans to households rose at an pared to take action to help the recov-
annual rate of 2.9 per cent in August ery and lift inflation. Many analysts
up from 2.7 per cent the previous expect it to resume buying longer-
month, with loans for house pur- term government debt later in the
chase up 3.5 per cent over the year. year to drive borrowing costs down
Overall, money supply growth also further.
jumped, although it remained short In the last 12 months, the gold
of the level the ECB sees as a warning price has risen by 30 per cent against
of inflation. a backdrop of volatile currencies,
M3 money supply, the amount of stocks and bonds and doubt over the
cash readily available to spend, which resilience of the global economy.
is a leading indicator of inflation, With investors looking to protect
jumped 1.1 per cent in August com- against potential inflation, or defla-
pared with a year earlier and against tion, analysts have also said that gold
expectations of a 0.3 per cent rise. It is a viable investment for both scenar-
was also the strongest growth in a ios.
year. One of the major forces feeding
At 0.5 per cent, the three-month investor demand has been the prolif-
moving average of M3 growth eration of exchange-traded funds
remains well below the ECB’s refer- backed by physical metal held in
ence rate of 4.5 per cent, above which vaults. This has made investing in
the bank would see a danger to medi- gold a reality for retail investors for
um-term price stability. the first time.
Societe Generale economist James At the LBMA’s event in Edinburgh
Nixon warned: “If this kind of growth last year, at which the association
is sustained month after month, then conducted a formal price poll on the
maybe in six months time the ECB last day of the conference, delegates
will start thinking about raising inter- forecast a gold price of $1,18 by this
est rates, but it is still early days.” September.

CFOs call for less rules in financial narrative FSA slams asset auditing
that over 65 per cent of some 230 sures, according to 83 per cent of As a result it will work alongside


BY EMMA SADOWSKI CFOs interviewed said they would like CFOs, while meeting the needs of the Auditing Practices Board for the
a reporting environment with more shareholders came marginally below THE Financial Services Authority next three months to review the cur-
MORE discretion and less regulation discretion and less regulation. this at 82 per cent. (FSA) has launched a review into the rent landscape. It will focus on clarify-
is needed when auditors deliver Almost 60 per cent said there Isobel Sharp, Deloitte audit part- auditing standards of client assets ing current standards, improving
financial commentary at the front of should be an emphasis on forward ner, said: “Companies are trying to after deeming current practices as firms’ governance oversight and cre-
annual reports, according to a raft of looking information in narrative serve two masters at the same time. flawed. ating more consistency in the sector.
chief financial officers (CFOs) at large reporting found at the front of annu- They want to inform shareholders of After reviewing auditors’ reports of The review comes after the FSA
commercial companies. al accounts. what is happening in the business. client assets, the watchdog said it slapped JP Morgan with a mammoth
A new report published by Deloitte Meanwhile, meeting legal and reg- They need to satisfy regulators by found “a number of serious failings” £33.3m fine for “failing to protect
and the Association of Chartered ulatory requirements were the most meeting all the disclosure rules. To that indicated a raft of general defi- client money” in June.
Certified Accountants (ACCA) found important drivers for narrative disclo- achieve both is a major challenge.” ciencies within the practice. A policy statement is due in 2011.
CITYA.M. 28 SEPTEMBER 2010 Labour Conference 9

Alistair Darling
warned the party
to stick to the cen-
tre ground and
Ignoring the deficit
would be a disaster,
not tack to the left

The new leader of

the Labour party
Darling warns party
Ed Miliband
wants his brother POLITICS Labour leadership campaign.

to be shadow BY DAVID CROW His comments come as new Labour
chancellor leader Ed Miliband tries to convince his
ALISTAIR Darling yesterday warned of brother David, who he defeated in the
“disastrous consequences” if the Labour contest to lead the party, to become shad-
party ignores Britain’s £160bn budget ow chancellor.
deficit. But while David Miliband is fully
Darling, who as chancellor pledged to signed up to Darling’s deficit reduction
halve the deficit within four years, said proposals, his younger brother this week
the party needed to set out a “credible said it was a plan that needed to be
plan with conviction and confidence”. “improved”.
But David He added: “People know there is a David Miliband has refused to say
Miliband is refus- deficit, they know it needs to come down whether he will serve in his brother’s
ing to be drawn and if you deny that, frankly, people will shadow cabinet, leading to speculation
on his future not listen to you, they will walk away and he will quit frontline politics this week.
it will have a disastrous consequence.” Sources close to Ed Miliband are
Pictures: PA/ The former chancellor has previously annoyed at his brother’s refusal to set
REUTERS said Labour lost the election because it out his position. “The will he stay, will he
was dishonest about the deficit. go show is a massive distraction,” a cam-
Darling’s remarks will be seen as a paign aide said yesterday.
thinly-veiled attack on Ed Balls, the for- Balls and wife Yvette Cooper are being
mer schools secretary who argued for a considered as contenders for the top eco-
slower pace of deficit reduction in the nomic brief if David Miliband does quit.

Miliband the elder

wows the crowds
The elder brother has out in the race to become Labour’s
new leader, seems to have tri-
ly pro-American. But yesterday
David Miliband said: “It’s not the
left the crowd wanting umphed where his tutor failed.
Yesterday, he delivered a barn-
opposite of an independent foreign
policy to choose to work with
storming speech, his best confer- President Obama and Secretary
more, says David Crow ence address ever. He was gracious Clinton. Britain’s values and inter-
in defeat, but also had a stark warn- ests are best pursued with a super-
WHEN Tony Blair stood down as ing for those who want the party to power whose leaders share our
Prime Minister, an embarrassing tack to the left under his brother values and interests.”
memo detailing plans for his exit Ed. Labour went into politics “not David Miliband is refusing to say
from office was leaked to the press. to practice class war, but to end it,” whether he will serve under Ed, but
“He needs to go with the crowds he said. this speech sounded more like a
wanting more. He should be the star The elder Miliband also appeared swansong than a pitch for a shadow
who won’t even play the last to contradict his brother and leader cabinet job. He won’t announce his
encore,” it read. on foreign policy. In his campaign, intentions until tomorrow after-
In the end, Blair’s departure left Ed promised a foreign policy based noon, for fear of overshadowing his
the public – and the party – on “values” not “alliances”, a nod to brother’s big speech today. If he
strangely cold. But his disciple those Labour members who think does go, it will certainly be with the
David Miliband, who narrowly lost the former government was slavish- crowds wanting more.

Interviews by Victoria Scholar



“No – Ed’s policies are far Yes, because with Ed as leader the “If the Labour Party wants to strangle
too anti-business and Labour Party will never beat the the UK’s dominant wealth
I think it is a real Conservatives. I generating sector
shame. His policies think Ed’s reformist then Ed was the
are not conducive views are mis- right choice. Ed
to recovery nor aligned with the Miliband and Vince
with the much needs of today’s
Cable seem to
needed re-estab- economy. We need
have been living in
lishment of the to encourage
City’s reputation for entrepreneurialism a dream world and
successful wealth rather than head have no chance of
creation in the towards a situa- tackling today’s
aftermath of the tion of more over- economic
2008 crisis.” regulation.” challenges.”
The Capitalist


IT’S been a tiring week for HSBC, married as HSBC itself to the bank’s graphic separation of the chairman
which is currently juggling the han- traditional policy of appointing man- in London and the chief in Hong
dling of a full-scale management agement from within. Kong. (The latter, of course, has been
game of musical chairs, the fallout Corporate governance concerns a problem for far longer – with
from its leaky succession-planning have centred around the appoint- Standard Life’s head of corporate gov-
AND a band of disgruntled sticklers ment of the finance director to the ernance Guy Jubb raising the issue,
for corporate governance among its chairman’s position – particularly as along with his concerns over board
shareholder base. Douglas Flint has worked so closely in remuneration, at the group’s AGM
So it’ll come as a welcome surprise the past with new chief executive back in May. “Our experience and
for the bank to learn that a conserva- Stuart Gulliver – and the practical sharpened sense of stewardship sug-
tive core of its investors remains as problems associated with the geo- gests to us that the arrangement is

Flint’s appointment to chair HSBC has governance sticklers hot under the collar Pic: REX

not sustainable,” Jubb warned.) Ideologies”. It’s not the first time
But one large investor The Capitalist Cattelan has courted controversy,
chatted to yesterday, who wished to either – his work includes a sculpture
proffer his support to the bank’s of Pope John Paul being hit by a mete-
embattled board anonymously, hit orite, as well as an installation of
back at the boffins with the rule three baby puppets hanging from the
book. “This is bureaucracy gone mad branch of a tree – both of which,
– who cares!” he roared. “If the unsurprisingly, have provoked heated
finance director is the best person to protests in the past.
be chairman, then so be it – and sucks Luckily for the financial workers at
to the legions of trainspotters in the the Italian exchange, Cattelan insists
City getting their knickers in a twist.” the hand sculpture is meant more as
That’s told’em. an “act of love” than a middle-finger-
up to the banking villains-du-jour…

Despite less-than-enthusiastic reviews BRAGGING RIGHTS
from critics, the second Wall Street Ping! In zooms an invitation to a
whole host of debates being organised
by Mayor of London Boris Johnson as
part of the Story of London festival at
the beginning of October – including
one, the first of the bunch, on the role
of the City.
“Bankers and Bonuses: What has
the City ever done for London?” is its
acerbic title, and it will feature,
among others, entrepreneur Luke
Johnson, financial journalist Daniel
Ben-Ami (author of “Cowardly
Capitalism: The Myth of the Global
Financial Casino”) and… musician
The cast of Wall Street 2: Money Never Sleeps Billy Bragg.
That’s the same Billy Bragg who
movie, “Money Never Sleeps”, man- earlier this year threw his penny’s
aged to clean up on its opening week- worth into the debate by refusing to
end at the US box office. pay his taxes unless the government
The film made $19m (nearly £12m) acted to curb RBS bonuses. Should
at US cinemas – hardly a record-break- turn out to be an insightful spectacle,
er in itself, but not at all shabby for then…
director Oliver Stone, representing
the biggest gross debut weekend
of his career, behind the $18.7m
opening of World Trade Center.
Something of a fillip for Nationwide
And for Michael Douglas – aka chief executive Graham Beale, who
the film’s star “Gordon Gekko”, Paddy Power has decided is top of the
it’s his second-biggest debut ever, list of runners and riders to succeed
behind You, Me and Dupree’s Eric Daniels as the next chief execu-
$21m. tive of Lloyds Banking Group.
The bookie has Beale at 5/2, with
Lloyds insider favourite Helen
FINGER SALUTE Weir coming in at 11/4.
The Italians aren’t exactly Former trade minister
known as a nation of and Standard Chartered
shrinking violets, but a boss Lord Davies and RBC
new sculpture erected boss Gordon Nixon are at
in front of the Milan 4/1 and 6/1 respectively.
Stock Exchange has Given those odds, it
challenged even their might bode well to have a
free-and-easy attitude to quick flutter on ex-Barclays
life. retail and commercial bank-
The sculpture, which ing boss Fritz Seegers, con-
stands 11 metres high and is sidered a top contender by
called “L.O.V.E.”, features a the City but looking long
hand with the middle finger with at 12/1.
sticking up in the tradition- Or perhaps former
al gesture of profanity. JP Morgan Cazenove
It is part of a retrospec- chief executive
tive dedicated to the work Naguib Kheraj, who
of contemporary Italian doesn’t get a look-
artist Maurizio Cattelan, in with Paddy at
labelled “Against all?
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12 News CITYA.M. 28 SEPTEMBER 2010

AIG forced to defend suit

over subprime exposure
go forward and could pave the way default swaps (CDS) and a securities

BY HARRY BANKS for a trial over AIG’s near collapse. lending program.
The government rescue led taxpayers Swain wrote that the allegations in
A JUDGE yesterday refused to dismiss to take a nearly 80 per cent stake in the class-action lawsuit were suffi-
a securities fraud lawsuit accusing the New York-based insurer. cient to suggest there was “a strong
American International Group (AIG) AIG spokesman Mark Herr inference of fraudulent intent” in
of misleading investors about its declined to comment. how AIG communicated publicly
exposure to subprime mortgages, Investors led by the State of about the risks in the portfolio of
which led to a liquidity crisis and Michigan Retirement accused AIG, credit default swaps. The lawsuit cov-
$182.3bn of federal bailouts. executives and directors of failing to ers investors who owned AIG securi-
The ruling by US district judge disclose the risks that AIG had taken ties between 16 March 2006, and 16
Laura Taylor Swain allows the case to on through its portfolio of credit September 2008. Among the defendants are former AIG chief executive Martin Sullivan Picture: REUTERS

EU ends Apple probe Flash crash sparked by order surge
European Union competition regulators A surge in quote traffic immediately fol-
said yesterday they will drop an investi- lowed by heavy sales of key securities
gation into US computer giant Apple sparked the “flash crash” on US stockmar-
after the company eased restrictions on kets on 6 May, datafeed vendor Nanex
programming tools and cross-border said yesterday. The sale of $125m worth
warranties for the iPhone. The move of Chicago Mercantile Exchange S&P500
comes after Apple changed its policies to stock index e-mini futures contracts fol-
make it easier for iPhone users to get lowed 25 milliseconds later by the sale of
repairs under warranty in an EU country more than $100m worth of exchange-
other than where it was bought. traded funds triggered the sell-off it said.
CITYA.M. 28 SEPTEMBER 2010 News 13

Aberdeen inflows
up on equity sales

BY HARRY BANKS funds and multi-asset funds – saw “We remain firmly focussed on
clients exit. organic growth, generating cash
FUND firm Aberdeen Asset The numbers appear to counter and strengthening our balance
Management said yesterday that the wider sector short-term trend, sheet further,” said chief executive
inflows accelerated over the sum- with flows statistics for July from Martin Gilbert.
mer, with clients favouring equity Lipper FMI showing sustained
funds despite volatile markets strength in sales of bond funds ANALYSIS l Aberdeen Asset
which have made investors cau- while new money invested in equi- p
tious. ty products slumped. 43
The firm reported a net £621m Combined with buoyant markets, 27 Sep
of new inflows during July and the inflows lifted Aberdeen’s assets 41
August, above the £337m in the under management – on which
previous three months. fund firms earn fees – 2.6 per cent 39
The firm’s equity and money to £168.8bn. Almost 70 per cent of
markets funds saw net inflows, that is evenly split between equities 37
while its bond funds and alterna- and fixed-income products, with
tive portfolios – which include alternatives and property at about
higher-margin funds of hedge 17 and 13 per cent respectively. 7 JJul 27 Jul 16 Aug 6 Sep 24 Sep


fresh stimulus
as growth slows

JAPANESE Prime Minister Naoto Kan
ordered his ministers yesterday to
plan a second budget for the remain-
der of the financial year amid con-
cern the country’s economy is
A government official said spend-
ing could total 4.6 trillion yen
(£34.5bn) but would not require addi-
tional government bonds to be issued.
However, economics minister Banri
Kaieda called for Japan’s central
bank – Bank of Japan (BoJ) – to lift its
ceiling on government bond purchas-
es effectively calling for a resumption
of quantitative easing. The BoJ could
lift the ceiling by as early as next week.
The news came as official figures
from the ministry of finance showed
CHINA Airlines yesterday pleaded guilty and agreed to pay a $40m (£25.2m) exports slowed for the sixth straight
fine in the US for price-fixing related to its cargo business. The US Department month. For the twelve months to
of Justice has said that the Taiwan-based airline conspired to fix cargo prices August exports grew by 15.8 per cent,
between January 2001 and February 2006. China Airlines will pay the fine in well down from a peak in February of
annual instalments over the next five years. 45.3 per cent.
14 News CITYA.M. 28 SEPTEMBER 2010

Carlyle launches student

housing investment push
and Islington and are progressing The excess demand has led to long-

BY VICTORIA BATES work on a further three sites in term average rental growth of around
London, to build an initial portfolio seven per cent – a figure which grew
CARLYLE Group, the private equity worth around £350m. to 10 per cent in 2009, Carlyle said.
firm known for its large-scale invest- The private equity giant believes The firm expects the number of
ments in the defence industry, yester- student housing is an attractive long- post-graduate and overseas students -
day sealed a joint venture deal with term investment proposition due to a group which tends to favour secure
Generation Estates, kickstarting its excess demand and a shortfall of sup- purpose-built accommodation – to
next big push in the student accom- ply, particularly in London. There are grow by around 15 per cent over the
modation sector. currently over 260,000 full time stu- next couple of years. But it said cur-
Carlyle, led by co-founder David dents in the capital, yet purpose-built rent supply will struggle to keep up,
Rubenstein, and Generation said they accommodation can only cater for with only 4,000 new beds due for
had acquired one site in Highbury around 16 per cent of them. delivery between 2010 and 2012.

Flybe, the best case Carlyle co-founder David Rubenstein sees

student accommodation in London as an

for doing business in attractive investment

Picture: PA

a day from London.

8.30am e Meet
7.10am me Catch Flyb clients
Leave ho flight

Wifi in
7.30pmr with
6.00p ii with Dinne
W family
m Play ds
4.00p flight the ki

Keeping Business on the move

Based on a London Gatwick to Jersey day return.

CITYA.M. 28 SEPTEMBER 2010 News 15

3i ramps up debt operations

with £18m Mizuho purchase
infrastructure arms. Jeremy Ghose will move over to 3i

BY VICTORIA BATES The new business – 3i Debt with his 28-strong team as chief exec-
Management – will have assets under utive of the debt management arm.
PRIVATE equity group 3i yesterday management of around £4bn, almost The move by 3i comes just over a
moved to expand its reach into the £3.7bn of which come from MIM. week after chief executive Michael
debt management space, snapping MIM’s management and 3i’s exist- Queen initiated a revamp of the
up debt specialist Mizuho Investment ing debt management employees are group’s private equity operations,
Management (MIM) for £18.3m. to sink their own capital into the new merging the buyout team with its
China’s Bright Foods is weighing MIM will merge with 3i’s existing business to acquire a 45 per cent growth capital arm.
a bid for United Biscuits and its small-scale debt activities to create a stake, while 3i will retain a 55 per 3i lost one of its top dealmakers,
iconic brands third substantial string to the firm’s cent controlling interest. head of buyouts Jonathan Russell, as
bow, alongside its private equity and MIM’s current chief executive a result of the shake-up.

China bid for

UB gives Cable
a headache
Food. Other parties linked with the


BY STEVE DINNEEN group included Kraft and Campbell
UNITED Biscuits could be the next United Biscuits has struggled in
iconic British firm to be snapped up recent years, with analysts criticising
by a foreign buyer, posing a fresh it for failing to take the initiative in
problem for embattled business secre- emerging markets.
tary Vince Cable. The Chinese firm, which recently
China’s Bright Food Group has its lost a bidding war for Australian
eye on a $3.2bn (£2bn) bid for the sugar refiner CSR, has a diverse port-
maker of Jaffa Cakes and McVities bis- folio that includes a taxi business in
cuits. Shanghai, ham and milk production
Cable has campaigned for tougher facilities, a property empire and a
regulation to make it more difficult tourism business.
for foreign firms to buy UK compa- Despite being formed just four
nies after Kraft’s controversial years ago, Bright Food now has sales
takeover of Cadbury earlier this year. topping £4.3bn and profits of £200m.
However, he appears to be power- United Biscuits employs 7,000 peo-
less to stop the deal going through if ple in Britain at 11 factories.
owners Blackstone and PAI Partners The company, which has been in
decide to cash in on the business they business for over 100 years, has other
bought for £1.6bn four years ago. of well-known brands including
It would be the first time a Chinese Jacob’s, Carr’s, McCoy’s and Hula
firm has taken outright control of a Hoops.
major European food firm. United Biscuits grew its profit for a
Bright Food has hired Rothschild to fifth straight year in 2009, when its
help broker the deal, although both earnings grew by 13.7 per cent to
firms declined to comment. £223.4m. That year, the firm notched
It is understood US-based a 5.1 per cent rise in its revenues to
Blackstone and French PAI had been £1.3bn. The food firm in recent years
planning an auction for the firm but has made inroads to the US and
are now in exclusive talks with Bright Australian markets.

Third time lucky for Cinven as it

snaps up Spice at 70p per share
ible institution with substantial

funds at its disposal. As an investor,
SPICE, the UK’s biggest installer of Cinven will take a long-term perspec-
water meters, yesterday succumbed tive on our business with a view to
to a £251.1m takeover bid from supporting continued delivery of
Cinven, after the private equity group excellent service levels to our cus-
twice sweetened its offer. tomers and opportunities for our
Cinven submitted its recommend- employees.”
ed bid through its investment vehicle The 70p-per-share offer represents a
Cilantro Acquisitions at 70p per 5.3 per cent premium to Spice’s clos-
share, after offering 54p a share for ing share price of 66.5p last Friday,
the firm in May and raising the bid to though it remains substantially lower
62p-65p in July. than the 130p highs at which the
Spice chief executive Martin Towers stock was trading prior to the finan-
said the offer would prove “good for cial crisis in 2007.
customers, employees and sharehold- Spice was advised by boutique
ers” alike. Hawkpoint and Cinven by investment
He added: “Cinven is a highly cred- bank Altium.
CITYA.M. 28 SEPTEMBER 2010 News 17

Sirius completes share placing WYG says it will continue

ENERGY announce the results of the share company will receive 40 per cent.
to slim down after cuts

BY MARION DAKERS placing later this week, before Sirius has signed four joint ven-
resuming its AIM listing. ture agreements with local compa-
SIRIUS Petroleum is close to complet- Sirius froze its shares in February nies, who will work with Chevon, ed in the current financial year, said

ing a $40m (£25.2m) money-raising to work on a $2m takeover of the Ke Shell and Mobil to develop oil chairman Mike McTighe.
drive to pay for its first oil field in field from a Nigerian company, Del deposits in the region. TROUBLED engineering consultant “The much awaited outcome of
Nigeria, more than seven months Sigma Petroleum. The firm said the Emerging markets investment WYG said yesterday its major restruc- both the comprehensive spending
after suspending its shares on the rest of the cash would be spent on banks Renaissance Capital and turing was on track, after announcing review and the strategic defence
AIM market. developing the field in the Niger Strand Hanson are working on the pared losses for the year of £21.9m. spending review continues to induce
Sirius is set to beat its $40m target delta. equity raise with Sirius, which was The company, which undertook a paralysis across both the public and
with both a share placing with insti- Under the terms of the deal, Sirius set up in 2009 with the aim of invest- debt for equity swap with its lenders private sector markets,” said Tighe
tutional investors and a debt agree- will receive a net preferential cash ing in Nigerian oil assets. in January, said it cut 620 jobs in the Revenue at the firm fell 16 per cent
ment, a person close to the company flow of 78 per cent from revenues Shares in the company froze in year to 30 June, costing £8m in redun- to £220.6m. Shares in the firm, which
said yesterday. once oil is produced, until full recov- February at 9p, valuing the company dancy payments and office closures. was recently demoted to the AIM
The group is expected to ery of its investment. After this the at £46.87m. More cost-saving measures are expect- market, dropped 8.8 per cent to 28.5p.

US vote over

firms too big to

decision on fail postponed

Travis Perkins

US BANKING regulators yesterday put
off proposing how the government
would use its new authority to dis-
mantle large, collapsing financial
companies, saying they need more
time for industry and other regula-
PROPERTY group would overtake Wolseley, the tors to weigh in.

BY MARION DAKERS current market leader that yesterday The Federal Deposit Insurance Corp
said it was moving its base to (FDIC) had tentatively planned to vote
BUILDING merchant Travis Perkins Switzerland. yesterday on issuing an interim final
said yesterday its £558m purchase of The enlarged group would repre- rule that would have put in place
BSS Group has been delayed after the sent around a quarter of the sector, some aspects of how the agency
Office of Fair Trading (OFT) said it prompting the OFT to open a consul- would handle the winding down of
needed more time to examine the tation shortly after the deal was large financial firms previously con-
deal. agreed in July. sidered “too big to fail.”
Travis Perkins, which also runs the Travis Perkins has said the deal The so-called resolution authority
Wickes DIY chain, told the stock mar- will deliver £25m in savings by 2013, was a main plank in the financial
ket the OFT had extended the deci- and become profit-making the fol- reform legislation, and is designed to
sion date on whether to approve the lowing year. avoid massive government bailouts
deal to 19 October. Shares in Travis Perkins fell 1.6 per such as the one for AIG, and destruc-
The company’s original timetable cent to 840p yesterday, while BSS tive bankruptcies like Lehman
for completing the deal will now not closed down one per cent at 450p. Brothers.
be met and it said will update the ANALYSIS l Travis Perkins On a separate matter, the board
market in due course. It had planned approved yesterday a final rule that
to complete the acquisition on 22 43
p 840.00 gives federal protection to securities
October. 27 Sep backed by home loans and other con-
Travis Perkins said in May it was 41 sumer debt if they meet higher stan-
interested in buying BSS, and agreed dards and banks retain some of the
a 435.8p a share deal in July. 39 risk associated with the products.
The deal would create the biggest TFL named the 17 companies it had chosen to make £320m worth of repairs to the Tube Industry officials criticised this
plumbing and heating trade and 37
network yesterday. The work includes new plumbing, fire prevention and an upgrade to move, saying the FDIC rule only
retail distribution business, with the communications system. Companies that have won three-year contracts include applied to some parts of the market,
19,000 employees and a combined Siemens, Atkins and MJ Quinn, which will focus on the stations previously maintained creating an uneven and unfair play-
turnover of more than £4bn. The 7 JJul 27 Jul 16 Aug 6 Sep 24 Sep by Metronet. Picture: PA ing field.

Roast New Season Grouse

with a glass of
Justerini & Brooks Red Burgundy
Game dish of
the year
Magazine 2008
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
18 News CITYA.M. 28 SEPTEMBER 2010

System C sees profit up 32pc AstraZeneca drug fails in

key prostate cancer trial

from £14.7m. Final dividend was “At System C, we are completing
BY HARRY BANKS increased to 0.50p from 0.44p, with our five-year strategic investment in
HEALTH and social care solutions total dividend up 14 per cent to 0.75p. our Medway software and bringing The failure of zibotentan to

provider System C Healthcare yester- The acquisition of Liquidlogic in the products to market at a time improve overall survival in the late
day reported a 32 per cent rise in pre- July 2009 for £10.2m had given when NHS Trusts have been newly ASTRAZENECA’S experimental stage, or Phase III, study follows simi-
tax profit to £5.4m from £4.1m for System C entry into the social care IT freed from central purchasing obliga- prostate cancer pill Zibotentan failed larly unsuccessful trials for two other
the year to 31 May. market, while acquisition of Conscia tions. to improve survival in a late-stage clin- AstraZeneca pills, Recentin in colon
Revenue surged by 75 per cent to Enterprise Systems in October for “We are now experiencing a surge ical trial, dealing a fresh blow to the cancer earlier this year and
£38.3m from £21.9m. Excluding new £0.8m had strengthened the group’s in procurement activity and have company’s drug pipeline. Vandetanib in lung cancer in 2009.
acquisitions, revenue increased by 44 expertise in web-based technologies. already achieved strategic contract As a result, AstraZeneca plans no Vandetanib has since gone on to
per cent to £31.5m. Meanwhile, earn- Chief executive Ian Denley said: wins, including The Royal Devon & regulatory submissions for ziboten- show benefits in thyroid cancer, a
ings per share were up nine per cent “This is a time of great upheaval for Exeter NHS Foundation Trust.” tan at this time and a spokesman said smaller potential market.
at 4.07p from 3.72p. the NHS, in both policy and econom- Denley added that services rev- yesterday it was discussing the impli- Zibotentan, a once-daily tablet, is
System C said its strong cash gener- ic terms, with changes under way enues were down but holding steady cations of the setback with investiga- being studied in more than 3,000
ation had been strong, with a net that are generating both risks and and the sales pipeline for Medway tors working on other studies men with prostate cancer in a pro-
position at the year-end of £18.6m, up opportunities. had “never been stronger”. involving the drug. gramme of clinical trials.


products company

to open new
St Tropez, whose
fake tan spray is
used by celebrities
such as Victoria
Beckham (left), has
been sold again. Its

nutrition unit
UK owner LDC, the
private-equity arm
of Lloyds Banking
Group, sold the
firm for £62.5m to
PZ Cussons, the
maker of Imperial
Leather soap and
world’s biggest producers of Carex handwash, it

processed foods, including Nesquik announced yester-
drink and Haagen-Dazs ice cream, day.
NESTLE, the world’s biggest food with sales of SwFr108bn last year. Luis
group, is setting up a new company to Cantarell, currently head of opera-
develop products it says will treat dis- tions in the Americas, will head the
eases like diabetes. new company from the start of next
The maker of Nescafe coffee, and year. Nestle chairman Peter Brabeck-
KitKat chocolate bars has been Letmathe said: “Personalised health Picture: GETTY
advancing into healthy foods to tap science nutrition is about finding
into growing consumer awareness of efficient and cost effective ways to
the benefits of a healthier diet. prevent and treat acute and chronic

Sanofi-Aventis sticks to its $69 per

Nestle chief executive Paul Bulcke diseases in the 21st century.”
said the market was still crystallising, Around 285m people have dia-
with some estimating it to be worth betes, one of the major causes of pre-
up to $150bn (£94bn). The firm said mature illness and death worldwide.

share offer for drugmaker Genzyme

Nestle Health Science, to be opera- Vevey-based Nestle said as a result
tional from 1 January 2011, will con- of Cantarell’s move, Chris Johnson
duct research into foods that can would join the Nestle executive
improve health and longevity. board.
The parent company will invest
around SwFr500m (£321m) the next ANALYSIS l Nestle 52.80
decade and the new offshoot will 27 Sep made ... We would like to enter into a lenders did not change prospects for
43 CHF

compete with companies such as dialogue.” a deal as funds were already available
Abbott Laboratories, chairman Peter SANOFI-AVENTIS has not changed its He declined to comment on a Wall for the move. Sanofi has said it
Brabeck said. It will be run at arm’s 41 offer of $69 per share for drugmaker Street Journal report released over already has financing from JP
length from Nestle’s main food, bev- Genzyme, it said yesterday. the weekend that said Sanofi had Morgan Chase, BNP Paribas and
erages and nutrition activities, and 39 Genzyme rejected Sanofi’s offer, approached Citigroup and Bank of Societe Generale.
will incorporate its HealthCare claiming it had dramatically under- America about additional financing The French drugmaker wants to
Nutrition unit. The HealthCare valued the US company. as it contemplates raising its $18.5bn reach an agreement but has not ruled
Nutrition unit had a turnover of 37 But Sanofi spokesman Jean-Marc (£11.6bn) bid. out a hostile offer made directly to
SwFr1.6bn in 2009. Podvin said yesterday: “We have one Industry analysts said the fact that Genzyme shareholders if its efforts
Nestle as a group is one of the 7 JJul 27 Jul 16 Aug 3 Sep 23 Sep offer at $69. No other offer has been Sanofi may have roped in more continue to be blocked.

Actelion shares fall after haemorrhage Healthcare Locums sees

drug fails to impress in experts’ study profits drop as cuts bite
lyst David Kaegi. The failure in the long-awaited


“The study was potentially the Phase III study means it is very unlike- HEALTH priorities in the run-up to the general
most important catalyst for Actelion ly that clazosentan will make it to election.”
ACTELION’S experimental drug shares this year. market, although a company SPENDING cuts by NHS managers The firm places medical staff
Clazosentan is unlikely to make it to “According to my estimates, cla- spokesman said all the data still need- have hit profits at medical staffing including doctors, specialist nurses,
market after it failed in a late-stage zosentan had sales potential of up to ed to be evaluated and the group company Healthcare Locums. and physiotherapists with the NHS
study, dealing the biotech group SwFr1bn (£850m),” he said. would provide an update with The firm said yesterday pre-tax and private-sector clients. However,
another blow following a setback for Actelion, which is trying to cut its Actelion’s third-quarter results on 21 profits dived 21 per cent to £6.8 m in the NHS accounts for less than half of
its key drug Tracleer. dependence on heart and lung treat- October. the first half of 2010. Healthcare’s revenues and the pres-
Shares in the Swiss group closed ment Tracleer, said clazosentan failed Another late-stage trial is still ongo- Executive vice-chairman Kate ent uncertainty in the UK has been
down almost eight per cent at SwFr to meet its primary endpoint in the ing. Bleasdale said: “We have experienced partly offset by strong international
40 yesterday. Conscious-2 trial in patients with “We have four drugs on the market challenging trading conditions in our growth, it said. Bleasdale said trading
“The failure of clazosentan is bad aneurysmal subarachnoid haemor- and a growing revenue stream,” the NHS operations as a consequence of would improve as the coalition had
news for Actelion,” said Sarasin ana- rhage, a type of bleeding in the brain. spokesman said. managers’ uncertainty over spending secured frontline spending.
CITYA.M. 28 SEPTEMBER 2010 News 19

Google keeps
World’s Top 10 acc to BUSINESS STUDENTS World’s Top 10 acc to ENGINEERING STUDENTS
1. Google (1) 1. Google (1)

top ranking as
CEO: Eric Schmidt CEO: Eric Schmidt

2. KPMG (8) 2. Microsoft (2)

CEO: Timothy Flynn CEO: Steven Ballmer

best employer 3. Ernst & Young (5)

CEO: Jim Turley

4. PricewaterhouseCoopers (2)
3. IBM (3)
CEO: Sam Palmisano

4. Sony (7)
CEO: Dennis Nally CEO: Howard Stringer

RECRUITMENT have also climbed up the business

“We’re witnessing the auditing 5. Deloitte (10) 5. BMW (4)
GOOGLE is the most attractive firms and consumer goods compa- CEO: Jim Quigley CEO: Norbert Reithofer
employer in the world, according to nies re-conquering their talent group
new research, which shows that after a brief love-affair with the IT
fewer students and graduates are industry,” said Universum chief exec- 6. Procter & Gamble (6) 6. Intel (5)
turning to the financial services utive Michal Kalinowski.
CEO: Bob McDonald CEO: Jane Shaw
industry for work. IT companies such as Microsoft,
Up to 130,000 job seekers with IBM and Sony remain popular choices
either a business or engineering back- among students looking to start an 7. Microsoft (3) 7. General Electric (6)
ground have voted the internet giant engineering degree, according to the
into the top spot in employment con- survey results. While BMW is still the CEO: Steven Ballmer CEO: Jeff Immelt
sultancy Universum’s annual survey. most powerful employer brand in the
Google has maintained the leading automotive sector, according to the
ranking both as a business and as an survey. 8. The Coca-Cola Company (13) 8. Siemens (8)
engineering employer for the second But employers within the banking, CEO: Muhtar Kent CEO: Peter Löscher
year in a row. oil and gas, and management consul-
Universum cited Google’s profes- tancy sectors which were once popu-
sional training opportunities and its lar among young jobseekers, are now 9. J.P. Morgan (7) 9. Procter & Gamble (10)
strong brand as some of the reasons perceived as responsible for the finan-
CEO: Jamie Dimon CEO: Bob McDonald
why it held on to the top spot. cial crisis and are therefore less
However, the search engine is fac- attractive, said Universum. Goldman
ing increasingly stiff competition Sachs, which ranked as the fourth 10. Goldman Sachs (4) 10. Apple (NEW ENTRY)
from the world’s largest accounting most popular business to work for in
firms, as KPMG, Ernst & Young, 2009 fell to tenth place, while JP CEO: Lloyd Blankfein CEO: Steve Jobs
PricewaterhouseCoopers and Deloitte Morgan dropped to ninth place.
20 News CITYA.M. 28 SEPTEMBER 2010

Vivendi sells its NBC stake Southwest to expand its

seven-year lows – largely underper- temporarily lifting its flagging stock.
presence with AirTran buy

forming peers – on concerns about Vivendi raised its 2010 guidance to
BY STEVE DINNEEN acquisitions, the cost of a US class- an “increase” in Ebitda, compared
VIVENDI has offloaded its stake in action lawsuit and intensifying com- with a previous forecast of “slight sents a unique opportunity to grow

NBC Universal to General Electric (GE) petition in the French telecom growth”. It also gave guidance on its Southwest Airlines’ presence in key
for $2bn (£1.26bn). sector. adjusted net income for the first SOUTHWEST Airlines is to purchase markets we don’t yet serve and takes
The French conglomerate sold a Vivendi’s company structure – time, forecasting it would rise from AirTran Holdings for $1.04bn (£656m) a significant step toward positioning
third of its 20 per cent stake and says under which it does not wholly own €2.59bn (£2.15bn) in 2009. First-half in cash and stock in a deal that will us for future growth,” said Southwest
it will sell the remainder for $3.8bn its major divisions – has led investors operating profit rose to €3.24bn. allow Southwest to expand its pres- chief executive Gary Kelly.
when GE completes a separate deal to apply a 25 to 40 per cent conglom- ence in major East Coast US markets. He also said the deal with Atlanta-
with entertainment firm Comcast. erate discount. Earlier this month Vivendi chief executive The merger, announced yesterday, based AirTran would allow Southwest
Earlier this month Vivendi chief Vivendi, Europe’s largest telecom and is the first among leading low-cost US to expand in markets such as New
executive Jean-Bernard Levy said the entertainment group, raised its profit
Jean-Bernard Levy has airlines and the second notable deal York LaGuardia, Boston Logan, and
group could use the NBC sale pro- targets on the back of forecast-beat- tried to reassure this year after United Airlines and Baltimore/Washington.
ceeds to buy telecom operator SFR, of ing first-half results. investors about his Continental Airlines. Delta Air Lines It also allows the airline access to
which it currently owns 56 per cent. It also attempted to reassure firm’s acquisitions bought Northwest Airlines in 2008. leisure markets in the Caribbean and
Vivendi has seen its shares slide to investors on its acquisition strategy, “The acquisition of AirTran repre- Mexico.


€ 52.74
27 Sep
ANALYSIS l Virgin media
27 Sep
ANALYSIS l InterContinental Hotels
27 Sep

to offer $4bn
1,400 1,150

1,300 1,100
1,200 1,050

for Massmart
1,100 1,000

28 Jun 16 Jul 5 Aug 25 Aug 15 Sep 28 Jun 16 Jul 5 Aug 25 Aug 15 Sep 28 Jun 16 Jul 5 Aug 25 Aug 15 Sep


UBS sees Lukoil as cheap stock with a Like all telecoms companies, Virgin Media InterContinental Hotels has seen asset
ing on cost cuts and international number of positive short-medium term cat- is heavily operationally geared with high ownership diminish, while growth is

growth. alysts not yet priced in. The broker, which gross margin services layered on top of skewed more to Asia, says Credit Suisse.
“Massmart is a very good fit with reiterates a “buy” rating for the Russian fixed network running costs, according to An “outperform” rating is retained by the
WAL-MART is in talks to buy South their business,” said Bryan Roberts, energy group, says on a relative basis, JP Morgan Cazenove. The broker forecasts broker, which has increased the price tar-
Africa’s Massmart, in a $4bn global research director at London
(£2.52bn) deal that would give the US industry research firm Planet Retail. Lukoil is starting to receive tax breaks and 70 per cent of additional revenue added in get for the hotels group to 1343p. The bro-
retailer a big presence in fast-grow- Some analysts have said the acqui- is probably set to acquire the most desired 2010-15 to drop through to cash flow and ker expects concerns about the US system
ing Africa and boost its emerging sition might not be the best use of upstream assets at a reasonble price. gives Virgin Media an “overweight” rating. to be compensated by Asian profit impact.
markets strategy. Wal-Mart’s cash.
Wal-Mart has made a non-binding “Wal-Mart should be allocating its
proposal of 148 rand (£13) per capital first and foremost to develop- To appear in Best of the Brokers email your research to
Massmart share, valuing it at around ing US urban stores and then return-

Takefuji eyes bankruptcy as it becomes

30 billion rand (£2.7bn), a premium ing cash to shareholders,” said Wall
of nearly 10 per cent over its last clos- Street Strategies analyst Brian Sozzi.
ing price of 134.75 rand. Wal-Mart would become the first
Massmart said it has granted the major international retailer to enter

the biggest Japanese lender to collapse

US firm an exclusivity period and South Africa, but others could soon
there is no certainty of a formal offer. follow by targeting one of
But Massmart’s share price jumped Massmart’s local competitors,
11 per cent to 150 rand, above the Roberts said.
value of the proposed offer.
Buying Massmart, South Africa’s ANALYSIS l Massmart
third-largest listed retailer by value, 15,000 rand 149.00 n’t have the financial backing of any ed,” it said in a statement.

would give Wal-Mart a considerable 14,000 27 Sep of Japan’s big banks, is making final Shares of Takefuji closed untraded
network in Africa’s biggest economy JAPAN’S Takefuji Corp is preparing to preparations to file for bankruptcy yesterday due to a glut of sell orders.
and a foothold in 13 other countries file for bankruptcy with $5.2bn protection. Trading in the stock had been sus-
in sub-Saharan Africa. 12,000 (£3.2bn) in debts, making it the Once Japan’s largest moneylender, pended by the Tokyo bourse for most
The world’s largest retailer has 11,000 biggest consumer lender to fail under Takefuji said it had not decided to file of the day due the news.
recently been hit by weakness in the the weight of court-ordered interest for bankruptcy, but would not com- Analysts have said this highlights a
United States where low-income repayments and tighter lending ment on whether it was considering major risk to the industry. A Japanese
shoppers are particularly vulnerable 9,000 rules. such a move. court in 2006 ruled the lenders had
to unemployment and higher gaso- 9,000 Takefuji, which has been consid- “It is untrue that we made such a charged too much in interest and
line prices. It has responded by focus- 12 Oct 09 4 Mar 10 27 Aug ered at risk for failure because it does- decision as some media have report- ordered them to repay borrowers.

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

Jenkins joins from Barclays Wealth, of business development in the Channel

London Stock Exchange where he spent the past three years, Arbuthnot Securities Islands. Murray joins from Kleinwort
The exchange has named Paolo Scaroni (pic- latterly as a director. He was previously The bank has appointed Adam Lloyd as Benson, where he spent the past 13
tured), the chief executive of Italian oil and gas head of investments for the Americas its new director of corporate broking. years as head of business development,
group Eni and one of its non-executive direc- at Ansbacher in the Cayman Islands. Lloyd joins from Evolution and has also head of product development and a
tors, as its new deputy chairman. worked at Albert E Sharp, James Capel, senior private banker.
The LSE also said Massimo Tononi has joined Drax Group Merrill Lynch and Durlacher.
the board as a non-executive director. Tononi The power group has taken on Tim Arbuthnot has also hired Andrew Equatorial Palm Oil
was a partner at Goldman Sachs until July this Cobbold, the former chief executive of Kitchingman from Brewin Dolphin as a The Aim-listed sustainable oil palm
year and, between 2006 and 2008, was Chloride Group, as a non-executive director in corporate finance and Emma plantation group has appointed
Treasury undersecretary at the Italian Ministry director. Harrison from Altium as an investor Shankar Varadharajan, a representative
of Economy and Finance in Rome. Following Emerson Electric’s $1.5bn relations manager. of its strategic partner the Siva Group,
takeover of Chloride earlier this year, as a non-executive director.
Cobbold now holds responsibility for Collins Stewart Varadharajan, 36, has over 13 years
GAM hired Andrew Jenkins as a portfolio the Chloride group of companies within The bank’s wealth management arm of experience in management positions
The investment management firm has director in its UK private client team. Emerson. has hired Murray Montgomery as head at Motorola and the Tata Group.

To appear in CITYMOVES please email your career

updates and pictures to

Lurking behind the financial crisis:

the Fed puppeteer and the trader
Wall Street’s bankers “It wasn’t
always thought they greed that
had another card to made
play: the US bailout Lehman CEO
proved them right Dick Fuld ride
his $1bn in

“ WANTED it to be like that Quentin
Tarantino movie: every person should shares right
come away with a different picture. I
wanted to almost do it with no judg- down to
Andrew Ross Sorkin is in London for the $56,000.”
Samuel L Johnson literary awards after
Too Big To Fail, his best-selling account of
the financial crisis, was short-listed for the
prize. But before heading off to a string of
other engagements, he finds time for a
leisurely iced tea with City A.M., to talk all
things Wall Street.
His desire to write the book “without
judgment” is hardly surprising coming
from the star finance reporter of the New
York Times, a paper that regards itself as a
keeper of historical records.
But Sorkin has a further reason to write
this particular story “without judgment”:
his aim was to complicate the convention-
al narrative about “greedy bankers” bring-
ing down the economy. “Part of the goal of
the project was to put the reader in the
room with them. When you get inside the
room, your field of vision changes,” he
says. His tactic is to take readers so close to
the main characters of his story – charac- bottom right) could hardly maintain faith Sorkin has become a portrays this society of “masters of the hand has a puppeteer: the Federal
ters that include former US Treasury sec- in the cool effectiveness of centrally regular talking head universe”, many of them self-made, who Reserve”. It was not until later he discov-
retary Hank Paulson and former Lehman planned regulation. on all things Wall thrived by pursuing their goals relentless- ered the full extent of it: “Really, I don’t
Brothers CEO Dick Fuld – that we can see Street ly in the face of setbacks and losses. These think I ever appreciated how active a role
the dandruff on their collars. At this mag- TRADER’S PHILOSOPHY were CEOs who, until the dying days of the US government was playing behind
nification, a simple reading of who is to And more broadly, he does not believe Picture: REX their empires, were unable to really com- the scenes,” he tells me.
blame for what becomes easily confused. that rules can prevent financial misdirec- prehend the idea of final, total failure. In Active, of course, does not mean compe-
And he applies this nuanced narrative tion. As he says: “The desire for power and Sorkin’s words: “There was a collective tent and Sorkin does not gloss over the
about blame and hindsight to his views on pride is something you can’t legislate.” failure to imagine how bad it could be.” Treasury’s chaotic interventions. He just
the need for regulatory changes prompted This might sound like typical banker-bash- doesn’t see a better option.
by the financial crisis. “It’s about the poli- ing, but there is a subtle difference PLAYING THE LAST CARD The problem is that Sorkin’s thinking
tics of the regulation – somebody has to be between Sorkin’s view and the usual “Wall And as it turned out, many of them – with brings him to a dead-end. He readily
the policeman,” he says. But on the other Street versus Main Street” lament. Asked the exception of Dick Fuld – were vindicat- admits the incentive problem created by
hand: “You can’t prevent the next crisis. why “greed” was supposedly allowed to ed in their denial. A forced merger in government bail-outs, but his suggested
The only thing you can do is create param- trump self-interest in the pursuit of exces- unfavourable conditions is hardly a good solutions – a resolution authority, higher
eters to limit the damage and give regula- sive risks, he disputes the premise: “To me, outcome, but it is a far cry from bankrupt- capital ratio requirements, a bank-funded
tors tools to mitigate the crisis.” Wall Street is less about greed than it is cy and defaulting on creditor loans. In “rainy day fund” for bailouts and a return
As a man who has spent years getting as about power and pride – it wasn’t greed that sense, that one card in the back pock- to banking by private partnerships – carry
close as possible to the behemoths of Wall that made Dick Fuld ride his $1bn in stock et turned up trumps, in the form of a gov- an air of compromise, the echo of a shrug
Street and their Treasury counterparts down to something like $56,000.” ernment bailout – and numerous about the how and when: “What’s
(since they are often the same people), Instead, Sorkin blames Fuld’s over- state-brokered deals. So deeply involved depressing is you have to do it on a global
Sorkin seems vaguely resigned to the whelming desire to win and, when every- was the Treasury that, during bankruptcy basis,” he says. “And if you’re a bank not
imperfections and contradictions of regu- thing went pear-shaped, not to lose face court proceedings, the judge deemed lending now, you won’t be lending under
lation. After all, a man who chronicled the for driving Lehman off a cliff. In his book, Lehman a “victim” whose “real tragedy” Basel III.”
making of Paulson’s bailout plan (see box Sorkin is at pains to convey the fierce cul- was to have been the only firm not includ- It is clear that Sorkin’s instincts push
ture that made beating rivals the be-all ed in the government’s rescue package. him towards regulating the actions of the
and end-all for Wall Street’s CEOs: money In fact, for a financial collapse so often hubristic characters he covers on Wall
CV | ANDREW ROSS SORKIN is important, undoubtedly, but above a blamed on the untamed forces of capital- Street. But his tendency is tempered by an
certain level of wealth, it serves more as a ism, what is striking about Sorkin’s book awareness of the practical pitfalls of law-
measure of one’s prowess and superiority is how central a role the government takes making: do it wrong, he says, “and you
Age: 33 than as a measure of buying power. And as in backroom deal-making from the very have yourself a sequel!” And even with the
Sorkin chronicles the thrill of deal-mak- beginning. As Sorkin wrote after the sale acclaim his first book has brought, not
Education: Cornell University ing and the cut and thrust of the trading of Bear Stearns: “Adam Smith’s invisible even Sorkin wants that.
floor, it becomes clear that this is a story
Career: After stints writing for the New being told by a man who cannot help but
empathise with Wall Street’s culture. As
York Times as an intern during university,
Sorkin joined the paper in 1999 and lived he comments of his book: “To write it, you
have to want to live with the characters for
from a “What about $1 trillion?” Kashkari said. tions. Whatever the sum turned out to be,
in London covering mergers and acquisi-
tions (M&A). In 2000 he moved to New a year.”
This makes Too Big To Fail as much a
trader’s “We'll get killed,” Paulson said grimly. they knew they could count on Kashkari to
York where he also covers M&A on Wall “No way,” Fromer said, incredulous at the perform some sort of mathematical voodoo
Street. psychological study as it is a historical nar-
rative. Because, to Sorkin’s mind,
philosophy – sum. “Not going to happen. Impossible.” to justify it… As he plucked numbers from
“Okay,” Kashkari said. “How about $700 thin air even Kashkari laughed at the absurd-
Biggest moment: The 2008 financial cri-
although the banking system was flawed
in its interconnectedness and systemic
there’s always billion?” ity of it all.
sis and the publication of his book. “It was
a very terrible thing for most of the world
importance, it was not merely the banks
that were “too big to fail”; it was the men
another trade, “I don't know,” Fromer said. “That's better
than $1 trillion.” Too Big to Fail: Inside the Battle to Save
and I’ve been an odd beneficiary in a way.
The book allowed me to use all I’d learned
running them.
“All this stems from a trader’s philoso-
a way out or The numbers were at best, guestimates,
and all three men knew it. The relevant fig-
Wall Street by Andrew Ross Sorkin is pub-
lished by Penguin Books for £12.99.
over the past decade covering Wall Street.
As a journalist, you’re almost sitting, wait-
phy,” he explains. “There’s always another
trade, a way out or another card to play.
another card ure would ultimately be the one that repre- The book is shortlisted for the 2010
sented the most they could possibly ask from FT/Goldman Sachs Business Book of the
ing for this moment,” he says. Dick Fuld always thought he had one
more card in his back pocket.” The book
to play.” Congress without raising too many ques- Year Award.
22 Markets & Investments CITYA.M. 28 SEPTEMBER 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor -
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 . . . . . . . . . . . . . . . . . . . . . . . .286.50 –1.50 310.00 246.90 Compass . . . . . . . . . . . . . . . . . .538.50 –5.00 574.50 353.00 JPMorgan Emerg Mkts . . . . . . . .581.50 +1.50 587.50 441.00 SABMiller . . . . . . . . . . . . . . . . .2013.00 –14.00 2090.00 1450.00
3i Infrastructure . . . . . . . . . . . . . 113.80 –0.30 115.00 97.00 Cookson . . . . . . . . . . . . . . . . . . . 511.00 –4.00 616.00 347.60 Jupiter Fnd Mgmt . . . . . . . . . . . .251.90 +12.90 256.50 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .266.30 +8.10 268.30 208.20
A.B. Foods . . . . . . . . . . . . . . . .1061.00 –10.00 1096.00 790.00 Croda Intl . . . . . . . . . . . . . . . . .1458.00* +8.00 1468.00 637.00 Kazakhmys . . . . . . . . . . . . . . . .1442.00* +21.00 1634.00 955.00 Sainsbury(J) . . . . . . . . . . . . . . . .390.30 –4.70 395.60 307.60
Aberdeen Asset Man . . . . . . . . . .161.00 +1.20 163.20 111.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .525.00 +13.50 539.00 381.00 Kesa Electricals . . . . . . . . . . . . .144.20* +2.50 162.00 98.45 Schroders . . . . . . . . . . . . . . . . .1436.00 –4.00 1454.00 1055.00
Admiral. . . . . . . . . . . . . . . . . . .1623.00 –9.00 1686.00 1003.00 Dana Petroleum . . . . . . . . . . . .1801.00 +4.00 1817.00 968.50 Kingfisher . . . . . . . . . . . . . . . . . .232.50 +1.20 255.00 196.50 Schroders N/V. . . . . . . . . . . . . . 1165.00 –5.00 1187.00 864.00
Aegis . . . . . . . . . . . . . . . . . . . . .123.40* +0.60 137.30 103.10 Davis Service . . . . . . . . . . . . . . .404.90* +3.10 442.30 356.00 Ladbrokes . . . . . . . . . . . . . . . . .138.40* +0.60 171.31 114.60
Afren . . . . . . . . . . . . . . . . . . . . . 110.30 +1.80 111.10 73.00 Debenhams . . . . . . . . . . . . . . . . .66.30 +0.70 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .342.00* — 349.90 156.70 Scot. & Sthrn Energy. . . . . . . . . 1125.00* — 1206.00 357.50
African Barr Gold . . . . . . . . . . . .578.50* –18.00 685.00 520.50 Derwent London . . . . . . . . . . . .1522.00 –18.00 1562.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .563.50* +4.00 565.00 416.70 Scottish Mortgage. . . . . . . . . . . .630.50 –1.50 637.50 475.00
Aggreko . . . . . . . . . . . . . . . . . .1536.00* +2.00 1639.00 664.50 Dexion Absolute . . . . . . . . . . . . .140.80 +0.60 148.00 128.30 Land Securities . . . . . . . . . . . . . .641.50* +3.00 743.50 543.00 SEGRO . . . . . . . . . . . . . . . . . . . .267.50* +0.50 389.90 244.00
Alliance Trust . . . . . . . . . . . . . . .333.80 –3.00 352.70 292.80 Diageo . . . . . . . . . . . . . . . . . . . 1100.00* +2.00 1176.00 930.50 Legal & General . . . . . . . . . . . . .103.90* +0.90 105.00 69.05 Serco . . . . . . . . . . . . . . . . . . . . .621.00* –4.50 656.50 485.60
AMEC . . . . . . . . . . . . . . . . . . . . .985.50 –8.00 1002.00 724.50 Dimension Data . . . . . . . . . . . . . 119.50 –0.30 125.50 59.30 Lloyds Banking Gp . . . . . . . . . . . .75.84 –0.81 79.15 45.30 Severn Trent . . . . . . . . . . . . . . .1330.00 –10.00 1404.00 939.50
Amlin . . . . . . . . . . . . . . . . . . . . .395.00* –3.40 437.60 350.80 Dixons Retail . . . . . . . . . . . . . . . .24.87 +0.63 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .126.20* +1.00 149.10 100.80 Shaftesbury . . . . . . . . . . . . . . . .445.50 –6.50 456.00 341.70
Anglo American . . . . . . . . . . . .2531.00 –4.00 3015.50 1846.50 Domino’s Pizza . . . . . . . . . . . . . .470.50 –2.30 481.10 273.10 London Stk Exchange . . . . . . . . .706.50 +4.00 949.50 540.50 Shire. . . . . . . . . . . . . . . . . . . . .1458.00* –14.00 1532.00 999.00
Antofagasta . . . . . . . . . . . . . . . 1195.00* +14.00 1222.00 699.50 Drax . . . . . . . . . . . . . . . . . . . . . .400.40 +5.70 479.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1692.00 –26.00 2198.00 1344.00 Smith & Nephew . . . . . . . . . . . . .569.50 –7.00 700.50 525.50
Aquarius Platinum . . . . . . . . . . .340.30* +3.20 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .387.90 –3.00 438.40 303.00 Man . . . . . . . . . . . . . . . . . . . . . .219.30 –2.50 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . .1207.00 –20.00 1253.00 814.00
ARM Holdings . . . . . . . . . . . . . . .409.50* –5.10 419.50 134.40 Easyjet . . . . . . . . . . . . . . . . . . . .375.10 –2.90 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .378.80 –1.70 412.70 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .435.30 –6.40 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .335.10 +5.00 338.00 215.00 Edinburgh Inv Tst . . . . . . . . . . . .424.00 –3.10 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .300.20* +0.30 331.00 220.10 Spectris . . . . . . . . . . . . . . . . . .1043.00 +27.00 1046.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3280.00 –54.00 3389.50 2668.00 Electrocomponents . . . . . . . . . . .231.70 –2.10 246.30 142.90 Melrose . . . . . . . . . . . . . . . . . . .269.40* +3.90 275.10 160.00
Atkins(Ws) . . . . . . . . . . . . . . . . .745.00* +6.00 801.00 532.50 EnQuest . . . . . . . . . . . . . . . . . . . 116.80 +1.10 125.90 87.35 Mercantile IT . . . . . . . . . . . . . . . .965.00 +4.00 1002.00 822.50 Spirax-Sarco Eng . . . . . . . . . . .1790.00 +26.00 1799.00 1005.00
Autonomy Corp . . . . . . . . . . . .1800.00 +29.00 2012.00 1278.00 Essar Energy . . . . . . . . . . . . . . .438.50 –2.50 475.90 358.50 Michael Page Intl. . . . . . . . . . . . .454.70* –3.20 470.70 314.40 Spirent Comms . . . . . . . . . . . . . .139.00 –0.90 145.10 84.15
Aveva . . . . . . . . . . . . . . . . . . . .1455.00 +20.00 1487.00 856.50 Eurasian Nat Res . . . . . . . . . . . .907.00* +4.00 1276.00 781.00 Micro Focus . . . . . . . . . . . . . . . .385.20* +19.20 550.00 272.20 Sports Direct Intl . . . . . . . . . . . . .131.70 –3.10 136.50 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .398.70* –2.20 474.00 290.20 Euromoney Inst Inv . . . . . . . . . . .613.50 +12.50 630.00 308.50 Millen & Copthorne . . . . . . . . . . .527.50* +4.00 547.00 321.40 SSL Intl . . . . . . . . . . . . . . . . . . . 1157.00 –1.00 1190.00 603.50
Babcock International . . . . . . . . .554.00 +3.50 660.50 489.00 Experian . . . . . . . . . . . . . . . . . . .681.50 +3.00 686.50 516.50 Misys . . . . . . . . . . . . . . . . . . . . .289.40 +1.10 295.80 192.60 St James’s Place . . . . . . . . . . . . .288.30 –0.60 296.90 203.40
BAE Systems . . . . . . . . . . . . . . .346.40 –1.10 389.90 288.10 Ferrexpo . . . . . . . . . . . . . . . . . . .293.20 –0.50 396.20 138.00 Mitchells & Butlers . . . . . . . . . . .296.30 –5.30 343.90 228.30 Stagecoach. . . . . . . . . . . . . . . . .184.60 +0.40 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .269.40 +1.20 304.80 228.60 FirstGroup . . . . . . . . . . . . . . . . .348.60 –2.30 443.90 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .199.00 +0.60 257.00 187.80 Standard Chartered . . . . . . . . . .1910.50* –19.00 1946.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .310.75 –1.00 394.25 253.40 Foreign & Col Inv Tst. . . . . . . . . .285.10 –0.20 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .504.50 –5.00 519.00 300.70 Standard Life . . . . . . . . . . . . . . .231.10* –0.70 237.00 170.00
Barratt Development . . . . . . . . . .104.00 –0.10 178.75 89.10 Fresnillo . . . . . . . . . . . . . . . . . .1225.00 –7.00 1240.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .317.00 –5.00 324.80 265.00 SuperGrp . . . . . . . . . . . . . . . . .1223.00 –7.00 1312.00 499.00
BBA Aviation . . . . . . . . . . . . . . .190.50* –2.50 220.00 145.90 G4S . . . . . . . . . . . . . . . . . . . . . .252.90* –7.30 285.70 217.70 Morrison Wm . . . . . . . . . . . . . . .301.70 –0.20 307.10 255.00 TalkTalk . . . . . . . . . . . . . . . . . . .149.50 +3.90 150.50 106.60
Bellway. . . . . . . . . . . . . . . . . . . .593.50 –6.50 848.50 510.00 Genesis Emerging Mkts Fd . . . . .506.00 –0.50 511.50 370.00 Murray Intl Tst . . . . . . . . . . . . . . .879.00 –3.00 907.50 720.00 Talvivaara Mining . . . . . . . . . . . .472.00 +9.40 501.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .818.50 –11.50 949.50 735.00 GKN . . . . . . . . . . . . . . . . . . . . . .165.00* –1.90 172.60 100.40 National Express. . . . . . . . . . . . .238.50 +2.10 258.60 155.86 Tate & Lyle . . . . . . . . . . . . . . . . .468.30 –4.30 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . . 1166.00 –3.00 1248.00 966.90 GlaxoSmithKline . . . . . . . . . . . .1272.50* +8.00 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .543.00 — 607.65 474.80
BHP Billiton . . . . . . . . . . . . . . .2010.00* +0.50 2346.00 1583.50 Great Portland Estates . . . . . . . .339.40 –2.40 346.60 236.60 Next . . . . . . . . . . . . . . . . . . . . .2200.00 –19.00 2360.00 1726.00 Taylor Wimpey . . . . . . . . . . . . . . .28.89 –0.07 46.34 24.29
BlackRock Mining . . . . . . . . . . . .627.00 –2.50 654.50 474.00 Greene King . . . . . . . . . . . . . . . .421.90 –3.80 484.00 372.50 Northumbrian Water . . . . . . . . . .335.40 –1.00 353.00 225.20 Telecity . . . . . . . . . . . . . . . . . . . .532.50 +17.50 546.00 311.30
BlueBay . . . . . . . . . . . . . . . . . . .347.10 +5.10 393.00 251.00 Halfords . . . . . . . . . . . . . . . . . . .440.00 –3.20 562.50 339.40 Ocado Grp . . . . . . . . . . . . . . . . .136.80 –1.20 169.00 132.00 Templeton Emrg Mkts . . . . . . . . .610.00 +3.00 614.00 449.00
Bluecrest Allblue GBP . . . . . . . . .169.00 +0.40 169.00 144.40 Halma . . . . . . . . . . . . . . . . . . . . .305.50 –0.20 320.50 210.30 Old Mutual . . . . . . . . . . . . . . . . .138.30 –1.40 140.50 94.75 Tesco . . . . . . . . . . . . . . . . . . . . .434.00 –5.00 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .48.39 +0.20 49.99 37.50 Hammerson . . . . . . . . . . . . . . . .403.60* –2.60 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .280.10 –3.90 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .183.30* –0.80 277.20 172.30
BP . . . . . . . . . . . . . . . . . . . . . . .403.90 –1.00 658.20 296.00 Hargreaves Lansdown . . . . . . . .435.00* –2.00 478.00 259.40 Pearson . . . . . . . . . . . . . . . . . . .985.00 –7.50 1069.00 751.50 Travis Perkins . . . . . . . . . . . . . . .840.00 –14.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1028.00 –1.00 1045.00 709.00 Hays . . . . . . . . . . . . . . . . . . . . . . 111.50 +0.60 119.00 82.50 Pennon . . . . . . . . . . . . . . . . . . . .581.00* –3.50 616.50 440.40 TUI Travel . . . . . . . . . . . . . . . . . .221.20* –2.80 313.90 189.20
British Airways . . . . . . . . . . . . . .243.60 –0.30 255.80 172.40 Henderson . . . . . . . . . . . . . . . . .123.50* –1.30 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .404.50 –2.00 520.00 335.90 Tullett Prebon . . . . . . . . . . . . . . .406.20 +9.80 436.20 261.20
British Amer. Tob . . . . . . . . . . .2395.00* –35.50 2439.00 1832.00 Heritage Oil. . . . . . . . . . . . . . . . .303.80 –7.00 585.00 298.20 Petrofac . . . . . . . . . . . . . . . . . .1391.00* –20.00 1446.00 900.00 Tullow Oil . . . . . . . . . . . . . . . . .1295.00 –4.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .461.60 –1.10 467.90 338.50 Hikma Pharma . . . . . . . . . . . . . .719.00* +17.50 813.00 445.00 Petropavlovsk . . . . . . . . . . . . . .1226.00 +1.00 1370.00 834.00 UK Commercial Prop. . . . . . . . . . .79.15 –1.15 84.90 69.10
British Land . . . . . . . . . . . . . . . .472.20 –0.10 515.00 416.00 Hiscox . . . . . . . . . . . . . . . . . . . .364.90* –5.10 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .680.00* — 775.00 550.50 Ultra Electronics . . . . . . . . . . . .1722.00* +40.00 1774.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .475.60 +1.20 518.00 340.00 Hochschild Mining . . . . . . . . . . .445.00 +7.00 449.80 220.00 Premier Farnell . . . . . . . . . . . . . .258.10* –0.80 272.60 140.60 Unilever . . . . . . . . . . . . . . . . . .1816.00 +23.00 2024.00 1662.00
Brown(N.) . . . . . . . . . . . . . . . . . .237.10 –4.70 284.30 204.80 Home Retail . . . . . . . . . . . . . . . .208.20 –3.00 326.30 207.40 Premier Oil . . . . . . . . . . . . . . . .1658.00 –1.00 1703.00 984.00
BSkyB . . . . . . . . . . . . . . . . . . . .710.00 +1.00 732.00 521.00 Homeserve . . . . . . . . . . . . . . . . .478.40 +5.40 502.00 435.40 Provident Financial . . . . . . . . . . .820.00 –7.00 986.00 795.00 United Utilities . . . . . . . . . . . . . .572.00 +1.00 620.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .140.70 –2.40 151.00 108.40 HSBC Hldgs . . . . . . . . . . . . . . . .660.90* –5.40 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .615.50 — 665.00 475.70 Utd Business Media . . . . . . . . . .624.50* +4.00 656.50 408.30
Bunzl . . . . . . . . . . . . . . . . . . . . .760.50 –11.00 784.50 613.50 Hunting . . . . . . . . . . . . . . . . . . .622.50 –1.50 659.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .364.00* –0.80 382.70 230.10 Vedanta Resources . . . . . . . . . .2292.00 +11.00 2967.00 1795.00
Burberry . . . . . . . . . . . . . . . . . . .998.00 –4.00 1007.00 483.90 ICAP . . . . . . . . . . . . . . . . . . . . . .432.70 +1.20 478.30 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . . 112.20 +1.20 179.10 103.50 Victrex . . . . . . . . . . . . . . . . . . .1266.00 +21.00 1320.00 726.50
Cable & Wire Comms . . . . . . . . . .59.15 –1.60 150.00 53.00 IG . . . . . . . . . . . . . . . . . . . . . . . .503.50* +2.00 532.00 291.00 Randgold Resources. . . . . . . . .6370.00 –115.00 6620.00 3930.00 Vodafone . . . . . . . . . . . . . . . . . .159.05 –1.90 164.95 126.50
Cable & Wire Wwide . . . . . . . . . . .74.55 –0.40 94.80 60.05 Imagination Tech Gp . . . . . . . . . .388.30 +3.50 399.00 154.00 Reckitt Benckiser . . . . . . . . . . .3515.00* –23.00 3667.00 2945.00 Weir . . . . . . . . . . . . . . . . . . . . .1405.00 +25.00 1459.00 635.00
Cairn Energy. . . . . . . . . . . . . . . .464.30 +4.40 497.60 306.80 IMI . . . . . . . . . . . . . . . . . . . . . . .765.00* +7.00 786.00 410.00 Reed Elsevier . . . . . . . . . . . . . . .535.50 –5.00 566.00 454.60 Wellstream Hldgs . . . . . . . . . . . .775.00* –1.00 810.00 429.70
Caledonia Invs . . . . . . . . . . . . .1625.00 –15.00 1759.00 1496.00 Imperial Tobacco. . . . . . . . . . . .1923.00 –17.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .77.50* +1.50 125.50 64.05 WH Smith . . . . . . . . . . . . . . . . . .449.90 +1.50 551.00 392.20
Capita . . . . . . . . . . . . . . . . . . . . .766.00* –5.00 829.50 693.00 Inchcape. . . . . . . . . . . . . . . . . . .307.60 +3.00 347.00 235.00 Renishaw . . . . . . . . . . . . . . . . .1039.00* +17.00 1048.00 479.00 Whitbread . . . . . . . . . . . . . . . . .1628.00 +6.00 1650.00 1141.00
Capital & Counties . . . . . . . . . . .132.50 — 137.50 99.60 Informa . . . . . . . . . . . . . . . . . . . .420.90 +2.60 439.40 263.30 Rentokil Initial . . . . . . . . . . . . . . .102.50 –1.10 140.20 91.15 William Hill . . . . . . . . . . . . . . . . .172.40 –0.50 217.80 160.50
Capital Shopping Centres . . . . . .370.00 +1.40 533.50 300.10 Inmarsat . . . . . . . . . . . . . . . . . . .688.50 –14.50 831.00 526.00 Resolution . . . . . . . . . . . . . . . . .235.90* +2.60 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .463.30 –1.70 487.00 396.30
Carillion . . . . . . . . . . . . . . . . . . .317.60* –0.20 361.90 263.90 Intercontl Hotels . . . . . . . . . . . . 1133.00* –1.00 1244.00 762.50 Rexam . . . . . . . . . . . . . . . . . . . .309.50* –1.00 348.80 253.40
Carnival . . . . . . . . . . . . . . . . . .2485.00 –26.00 2937.00 1876.00 Intermediate Capital . . . . . . . . . .298.40 +5.40 308.30 233.50 Rightmove . . . . . . . . . . . . . . . . .735.00 –7.00 796.50 456.90 Wolseley . . . . . . . . . . . . . . . . . .1520.00 –10.00 1742.00 1155.00
Catlin . . . . . . . . . . . . . . . . . . . . .341.10* +0.80 394.60 303.20 Intertek . . . . . . . . . . . . . . . . . . .1813.00 –14.00 1863.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .3703.50 +8.00 4104.00 2435.00 Wood Group (John). . . . . . . . . . .430.30 +4.50 432.80 279.60
Centamin Egypt . . . . . . . . . . . . .182.00 –1.80 194.40 92.00 Intl Personal Fin . . . . . . . . . . . . .278.10* +12.60 283.00 137.00 RIT Capital Partners . . . . . . . . . 1118.00 –15.00 1215.00 940.00 WPP . . . . . . . . . . . . . . . . . . . . . .720.00 –2.50 744.00 520.50
Centrica . . . . . . . . . . . . . . . . . . .327.50 –5.80 347.00 236.30 Intl Power . . . . . . . . . . . . . . . . . .387.00 –0.80 396.80 248.20 Rolls Royce . . . . . . . . . . . . . . . .589.00 –1.50 631.50 434.50 Xstrata . . . . . . . . . . . . . . . . . . .1220.50* –14.00 1344.50 815.00
Charter Intl . . . . . . . . . . . . . . . . .683.50 +22.50 855.50 563.50 Invensys . . . . . . . . . . . . . . . . . . .294.40 +0.70 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1716.00* +62.00 1732.00 1091.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .3000.00 +6.00 3711.00 2365.00 Investec . . . . . . . . . . . . . . . . . . .500.00 –2.50 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .48.81 –0.48 58.95 28.25
Close Bros . . . . . . . . . . . . . . . . .727.00 +5.00 806.50 657.00 ITV . . . . . . . . . . . . . . . . . . . . . . . .58.70 –0.25 71.75 41.04 Royal Dutch Shell A . . . . . . . . . 1911.00 +4.00 2068.50 1621.00 * Ex-Dividend † Suspended
Cobham . . . . . . . . . . . . . . . . . . .233.40 –0.60 278.60 205.50 Jardine Lloyd Thompson. . . . . . .572.00* –5.00 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1849.00 +4.00 1997.50 1550.00
COLT Group . . . . . . . . . . . . . . . .122.30 –1.50 144.20 107.70 Johnson Matthey . . . . . . . . . . .1760.00 –3.00 1814.00 1302.00 RSA Insurance . . . . . . . . . . . . . .130.60* +0.10 142.00 114.10


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FTSE led lower as Smiths Group and Wall Street tumbles but
banks fall despite gains by Unilever investors remain positive
and high US but low emerging mar-
ket sales exposure, while leaving its
target price unchanged at 1,350p.
cash to boost its personal care busi-
On the downside, Wolseley, the
THENEW YORK month for stocks, Wall Street was on
track for one of its best months in a

REPORT Software firm Sage Group, mean-

while, topped the blue-chip leader
board, while peer Autonomy was
world’s biggest plumbing, heating
and building materials company, lost
0.7 per cent after it posted flat year
REPORT Several business deal announce-
ments lifted sentiment. Consumer
goods group Unilever plans to buy US
another good gainer after Barclays profit. It plans to move its tax status hair care group Alberto Culver for

HE FTSE 100 closed down 25.06 Capital initiated coverage on the to Switzerland in search of tax sav- S stocks slipped yesterday as $3.7bn. Alberto Culver surged 19.6 per
points, or 0.5 per cent, at European Software/IT services sector ings. Banks were also weaker, down investors took a break from a cent to $37.64, while Unilever's New
5,573.42, after gaining 1.6 per with a 1-Positive view. 0.8 per cent. four-week rally, but they York-traded stock added 1.1 percent to
cent last week, with Smiths Sage, which BarCap started as remained optimistic the $28.86.
Group out of favour while Unilever “equal-weight,” and Autonomy, which ANALYSIS l FTSE advance would resume as a flurry of Meanwhile Wal-Mart Stores the
rose after a US acquisition. the broker initiated as "overweight" 5,573.42 deals suggested companies were see- world's largest retailer, offered to buy
Broker recommendation and tar- and counts among its top picks, 27 Sep ing value in the market. Massmart, South Africa's third-largest
get price changes were behind some advanced 3.1 per cent and 1.6 pe 5,600 The Dow Jones industrial average retailer by value, for more than $4bn
of the individual equity moves. rcent respectively. closed down 48.22 points, or 0.44 per as it seeks to expand on the conti-
Smiths shed 1.6 per cent after Bank of A price target hike from Goldman cent, at 10,812.04. The Standard & nent. Wal-Mart, a Dow component,
America Merrill Lynch cut its rating Sachs helped miner Kazakhmys 5,200 Poor’s 500 Index was down 6.51 slipped 1.1 per cent to $53.48.
for the engineering group to "neutral" climb 1.5 per cent. 5,000
points, or 0.57 per cent, at 1,142.16. AirTran Holdings jumped 61.3 per
from “buy” in a review of the UK Unilever climbed 1.3 per cent after The Nasdaq Composite Index was cent to $7.34 after Southwest Airlines
Capital Goods sector. the consumer goods group agreed to 4,800 down 11.45 points, or 0.48 per cent, at offered to buy the regional carrier for
The broker said it downgraded buy United States-based hair care 4,600 2,369.77. But in defiance of $7.69 per share. Southwest shot up 8.7
Smiths due to the stock's re-rating group Alberto Culver for $3.7bn in 28 Jun 7 Jul 27 Jul 16 Aug 6 Sep September's track record as the worst per cent to $13.35.
CITYA.M. 28 SEPTEMBER 2010 Investment | Contracts for Difference 23

NOT MATCHED September was golden
but cooler days are due
US stock gains slow
but the Fed will help,
HE rally in equities this September has
wrong-footed those of us who felt that
the August sell-off was the start of
something more serious. Now we’re just
suggests Jessica Mead
a few days away from October, typically anoth-

er worrisome month for markets. While the EPTEMBER’S prodigious rally in the
major US indices have broken above significant American S&P 500 index has taken
resistance levels, recent moves in the Japanese many investors rather by surprise.
Nikkei and Spanish Ibex look less than convinc- Despite falling yields on US
ing. Similarly, although the FTSE is pushing Treasuries and gold rallying, the index is on
higher, the German Dax is struggling to break track for its third-best monthly perform-
above the highs it made earlier this summer. ance in the past decade.
The recent behaviour of crude oil suggests The S&P 500 has been driven higher by
that not everyone is convinced that the global tech stocks, which have risen 12.71 per cent
economic recovery is in place. Aside from one so far this month. Consumer discretionary
brief interlude this spring, Brent crude has and industrials also helped lift the index,
spent the last 12 months trading between $65- rising 11.82 per cent and 11.71 per cent
$85. Having tracked equities closely, oil has so respectively. These sectors’ better perform-
far ignored the latest rally. ance has been caused by defensive investors
If a global slowdown is in progress, then an seeking yield in a low interest rate environ-
overall fall-off in demand would make $80 ment. It is also no coincidence that both
crude look very expensive in the short-to-medi- tech stocks and materials firms have the
um term. Even now, many analysts reckon that highest international revenues exposure.
the fair price for oil given the current levels of More than half of tech firms’ earnings come
supply and demand should be nearer $45-$55, from outside the US while the figure for
and many speculate that current prices are due materials stocks is 41.6 per cent, according
to an overestimation of Chinese growth. to Bespoke Investment Group.
Going forward, there must be questions over Should contracts for difference (CFD)
future Chinese demand. The authorities have traders be expecting further gains in the
spent this year trying to dampen speculative index as we head into the back end of the
activity in the property and stock markets by year? Equity strategists are generally bullish.
tightening their banks’ reserve ratios. China’s The global economic expansion is expected
main export markets look vulnerable: the to continue, which should increase The S&P has
European sovereign debt crisis is unresolved, investors’ risk appetite and, by extension, been flying high
while the US has high unemployment and the their desire to own shares in S&P 500 stocks. in September, but
probability of a double dip in housing. There is While the US economic outlook is suffi- may dip lower in
rising discord over trade matters between the ciently gloomy for the Federal Reserve to the short term
US, China and Japan, which could finally under- hint strongly last week at another bout of
mine investor confidence. In this situation, oil quantitative easing (QE) come November,
would struggle. But a sharp sell-off could pro- this should support the equity markets.
vide investors with the perfect buying opportu- While Barclays Capital equity strategists, term and then the year’s highs of 1,219. likely to inch steadily upwards over the next
nity to get a cheap entry level to a commodity led by Barry Knapp, don’t believe QE2 is the However, the index has started to turn couple of months.
that is getting more and more difficult and most likely scenario, they do say: “If the eco- down towards the 200-day simple moving
expensive to find and extract, yet remains the nomic data continues to disappoint, there’s average at around 1,118 – a break below here ANALYSIS l S&P 500 INDEX
single most vital component in powering the little doubt the Fed would make a major should make CFD traders exceedingly wary
world’s future growth. effort to boost financial asset prices further: of adding to long positions. While either 1,200
The Greenspan put has thus become the better economic data or Fed action ought to
Bernanke put. With the economic cycle and keep the S&P relatively well supported over 1,150
central bankers decidedly supportive, how the coming months, traders should not rule
badly can financial markets perform?” out a short-term dip lower and be prepared
So what levels should CFD traders be to place stop losses appropriately if they
aware of when it comes to trading the S&P can’t stomach the volatility.
index? It is currently trading just below the The Bernanke put should ensure relative- 1,050
1,130 level, which has recently acted as a ly little downside for the US stock market
major resistance to the upside. A break but CFD traders should not be expecting a
higher would open up 1,170 in the short- sharp move higher; this is an index that is 2010 May Jun Jul Aug Sep

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CITYA.M. 28 SEPTEMBER 2010 Investment | Contracts for Difference 25

Even without a ANALYSIS l European air traffic

Source: AEA


runway, airlines 5%


-5% Revenue passenger km, % y/y

set for take-off

Available seat km, % y/y

Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10

No runway? No
problem for
British Airways tops es. Most brokers favour BA due to its
impending merger with Iberia (IB). Iberia’s
stock owners
the list of favourites, balance sheet will help as BA tries to plug
the huge hole in its pensions fund, while
at least for this year, IB’s South American routes add coverage to
an area where BA is currently limited.
writes Juliet Samuel And despite the markets pricing in some
of the good news, analysts at Goldman
Sachs say BA and Iberia both still look

AA’s Sir Nigel Rudd grabbed head- cheap: “The reason for this is that the
lines last week by denouncing the extent of change afforded by the two corpo-
ban on a third runway at Heathrow, rate tie-ups has yet to be absorbed and
claiming it would make the facility a quantified by the market due to the lack of
“second-tier airport”. His comments fol- related disclosure from the companies,”
lowed an update from the International Air they write.
Transport Association (IATA) that forecast a Moreover, the lack of a new runway at
likely 2010 profit of $8.9bn for the global Heathrow has a perverse effect on valua-
aviation industry – excepting Europe, tions. While it will stymie BA’s ability to
which is still expected to be in the red. grow in its central hub, the airline will
On the surface, the news suggests bleak instead be able to expand in Madrid
prospects for UK airlines. But in fact, con- through its merger. And as for smaller air-
tracts for difference (CFD) traders could lines like British Midlands, Lobbenberg
stand to gain from going long on airline points out: “The prime value of that busi-
equities in the coming months. Brokers ness is in its slot portfolio. If you created
remain almost uniformly positive about another runway you’d ruin that value.”
the industry and, for many, British Airways UBS analysts are similarly hopefully for the
(BA) tops the list of favourites. industry, recommending a “buy” on
For one thing, the IATA headline find- almost every major European carrier –
ings disguise what is actually an impres- except easyJet. With the firm still
sive recovery – in Europe and elsewhere. embroiled in a row over its brand and
RBS’s Andrew Lobbenberg says: “IATA punctuality failings with easyGroup owner
emphasizes the weaker European Sir Stelios, its outlook remains highly
economies, but the key issue is the vol- uncertain.
cano. Without that, the European industry And over the long-term, the same is true
would be in profit.” of BAA. Although it still has growth poten-
This recovery is driven mostly by yield tial on the horizon in the form of terminal
improvements, in part due to airlines decid- improvements, it is unclear how much fur-
ing not to add capacity during a period of ther the company can expand without a
sluggish growth. But high-margin premi- third runway, having been forced to sell off
um sales (that is, sales of all non-economy other major assets like Gatwick and
seats) have also proved more resilient than Stansted to rival Global Infrastructure
expected, such that IATA predicts that rev- Partners (GIP).
enues will be only $4bn below those But while CFD traders should stand to
achieved during the peak of 2008. make solid gains in the European airline
So airlines should be in a good position space, the strong recovery this year will not
to capitalise on higher demand until the necessarily follow through to 2011 as
end of 2010. With September passenger fig- growth slows further. After a long trade
ures due in early October, CFD traders over the next quarter, it might then be
should keep a keen eye out for any surpris- time to sell.

THE TIPSTER Food, further consolidation in the consumer

sector may well follow. Current IG Markets
LOOK FOR GOOD price on Unilever is £18.38-£18.39.
One popular pairs trade that looks attrac-
GDP FIGURES TO tive is British American Tobacco (BAT) and
Imperial Tobacco. The spread, which has
BE REFLECTED IN traded around £1.12 for most of the year,
and as low as £1.01 in January, has popped
MINING STOCKS out to £1.24 over the last few months. This
would normally be a signal to sell BAT and
buy Imperial, looking for the spread to con-

INING stocks have had a good run tract. But fundamentals show that Imperial
recently. With some important eco- is not performing as well as its peer and BAT
nomic data due this week in the form is more in favour, offering better opportuni-
of the UK's GDP and US consumer ties for growth. It also pays a higher divi-
confidence figures today, some good numbers dend. Spread Co offer BAT at 2397.7p –
could push the miners higher. Capital CFDs 2402.3p and Imperial Tobacco 1928.6p –
offers a price of 3,699.1p-3,703.9p for Rio 1933.4p.
Tinto. After a well-defended $1.35 barrier
Gold’s key resistance level of $1,300 per option was finally taken out on Monday
ounce has fallen and major producer, Barrick, morning in euro-dollar, the pair did not
is tipping $1,500 an ounce as being entirely accelerate higher but instead saw more sell-
within reach. Concern over global economies ing. The pair only reached a high of $1.3505
is certainly adding credibility to this idea and before falling away to $1.3450. $1.3515
the prices of precious metals still have the looks like it’s going to be a major point of
potential to continue appreciating even into resistance since it marks the 50 per cent
these uncharted territories. Current IG retracement of the big $1.5145-$1.1875
Markets price on Gold is $1,298.60-$1,299.10. move. The word was that hedge funds were
Acquisitions are frequently seen as over- sellers as soon as the pair came near this
priced ventures but Unilever’s purchase of level yesterday morning. Look to sell euro-
Alberto Culver is cheering buyers and showing dollar around the $1.3510 level but keep
that M&A activity is very much alive and well. stops relatively tight. Spread Co offer a
With the news coming at the same time as spread on euro-dollar of $1.3476–$1.3478.
word of United Biscuits’ possible sale to Bright Juliet Samuel

Daimler has just brought out a Smart scoot-

er, at exactly the same time as MINI).
“In Munich where I live, I started to see a
lot of people reconditioning old scooters
and I could see the idea from the 1960s
reforming. Now, with traffic the way it is,
two-wheelers are looking like the way to get
you where you need to go faster. And the
idea of an electric scooter with zero emis- FIT IN
sions became obvious.” But obvious for
MINI? “No. Because we’ve never done one.
But the brand is for young people in an BY LAURA WILLIAMS
urban environment and the scooter makes FITNESS & DIET EXPERT
How does Van Hooydonk reconcile the
Germanic ownership of MINI with its
innate Britishness? “It’s an international
brand now; that’s the way it goes,” he
says, with just a hint of
How to get
Picture: Micha Theiner/ CITY A.M.

resignation. “Everyone
knows in their heart
that MINI is British;
there is so much
perfect pecs
heritage. But like

with fashion, we O matter that the beach season is
are giving it a drawing to a close – give your chest
new spin; in the some TLC this autumn. Here’s how.
same way that
Burberry rein-
vented itself on a TRAIN CONSISTENTLY: Your chest muscles
global stage. are a big muscle group that need to be trained
British culture is regularly and effectively in order for you to see

The man making MINI

always reinventing results. You must adhere to your routine come
itself; picture the old red phone booth next rain or shine if you’re going to get buff quick.
to the skyscraper. MINI now appeals to
those who like heritage and those who PICK YOUR EXERCISES CAREFULLY: You can’t
don’t.” afford to have favourites when it comes to

cooler – and smaller

Scooters aside, what does the future hold training the chest – mix up a flat bench press
in automotive luxury, from a BMW perspec- with an incline bench press, and include cable
tive? “Sustainability is going to be a large crossovers, flies and pullovers for a really com-
part of the premium market in future. To prehensive routine.
own a premium vehicle, it will have to have
green credentials.” There is a lot of effort EAT WELL: You need to ensure that your diet
going into this – and a good few car con- has the right balance of protein, carbs and fats
As MINI launches its this time in Soho, to announce its new
scooter concept. Witness the birth of three
Above: Adrian Van
Hooydonk, chief of
cepts floating about, with longer range
hybrid and electric motors.
so that you supply your muscles with the very
best fuel. Eating well also helps to keep body
magnificent, globular scooters in bright design at BMW; a As for appearance, we can expect cars to fat levels down so that the fruits of your
first scooter concept, colours, one of which is overtly inspired by classic Mini, and reflect this greener incarnation, with aero- labour become visible. Make sure your carbs
the mods of the 1960s (see right). below, the Mod E- dynamic, lighter looks. “Imagine a look are the good quality sort – that is, anything
Zoe Strimpel catches Given the tremendous pitch of activity Concept scooter. where body panels seem to float instead of brown goes (brown bread, brown rice, whole-
swirling around MINI just now, it seemed a being connected. Typically you hide aerody- wheat pasta, and so on). Make sure you
up with BMW’S good time to meet the gatekeeper of its
style: Adrian Van Hooydonk, the Dutch-
namics, but now they will become a natu-
ral part of the design.”
always train with sufficient fuel in the tank
and refuel as soon as you’ve finished your
man behind it all born chief designer of BMW group.
I meet him folded into a booth at MINI’s
BMW’s watchword is mod-
ern luxury – a concept

Park Lane showroom during his visit to Hooydonk likes to express GO LOW REP, HIGH WEIGHT: If you’re starting

O car captured Anglo cool like the London to launch the scooters. Tall, ele- with sustainable materials out, you don’t want to be pulling a muscle lift-
British Motor Corporation’s Mini of gant, and soft-spoken, you wouldn’t think such as bamboo, and by mov- ing the heaviest weight you can – think about
the 1960s, the Mods’ car of choice. this was one of the world’s greatest ing away from the tradition- sets of 8-12 reps, and make sure you’re failing
Bought by BMW in 1994 (as part of manipulators of steel. Yet when he talks al leather, wood and chrome by the end of the set. As you progress, though,
Rover), Mini became MINI in 2000, but about design, the clear-sightedness, pre- towards warmer colours, up the weight and reduce the number of reps
remains irresistibly hip; the ride of choice cision and passion that led him to become cloth instead of leather (such you’re doing (think 6-12 reps: 6 min; 12 max).
for young British urbanites whose chief of design at BMW become clear. as in the 5-Series GT), and
European equivalents would drive Fiats But first, what’s a man like this – used wood cut in a different way. PERFORM MOVEMENTS SLOWLY: Using speed
around Rome and Milan; or VWs around to copious space for complex dials, His own white Z4 sports brown for momentum is cheating if you’re doing
Berlin and Munich. To celebrate the recent leather and bamboo – doing designing leather and aluminium dash. straight sets (i.e. if you’re not deliberately
launch of the MINI Countryman, VIPs scooters? “In the future, luxury is going to be doing sets where you’re using speed as an
were invited to a field in Docklands for a “As a designer, it’s very interesting, defined by simplicity. Almost a kind of added stimulus). Maintaining a smooth, con-
Champagne BBQ and a performance by as there’s no predecessor to a MINI zen style.” So long as elegant crea- trolled movement especially during the eccen-
rapper Timbaland. Clearly, this is a very scooter,” says Van Hooydonk. “And tures like Hooydonk are in charge, tric phase (the “easy” part of the exercise
cool lifestyle brand, not just a car. two-wheel transport is getting we have plenty to look forward to. when the muscle’s lengthening) ensures that
Last week, just ahead of the Paris Motor another look, as functional rather MINI’s E-Concept scooters will be on show at the your muscles are being loaded in the correct
Show, MINI threw yet another glitzy bash, than just leisure objects.” (Indeed – Paris Auto Show, 2-17 October. way.


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CITYA.M. 28 SEPTEMBER 2010 Lifestyle 27

The Square Mile’s retail revolution

dash to the West End becomes a thing of
the past.”
It’ll also mean there’s a reason to visit
the City at the weekend, since the shops
and restaurants – including that dramatic
roof terrace, which has a restaurant and
café attached – will be open seven days a
week. The developers are also hoping that
Gordon Ramsays’ café (a twist on his Plane
Food venture at Heathrow’s Terminal 5) or
Jamie Oliver’s barbecue-inspired restau-
rant, Barbecoa, will provide an extra draw.
Picture: Micha Theiner/CITY A..M.

The building itself is a rather sci-fi affair

– all thrusting angles and shady glass,
apparently inspired by the design for a
Stealth bomber – by French architect Jean
Nouvel, who was behind this summer’s
beautiful red pavilion at the Serpentine
Gallery. Bold and modern it may be, but
not in such a way that it detracts from St
Paul’s across the road – in fact, all its walk-
ways and angles point towards the cathe-
dral, and that roof terrace offers a vital new
way to enjoy the City’s greatest landmark.
Opens 27 Oct.
One New Change will new shopping centre on Cheapside that
opens one month from today, is really
David Atcherly Symes, retail manager for
property developer Land Securities, which ONE NEW CHANGE | SHOPS AND RESTAURANTS
shake up the City, rather more than a terrace – it’s an expanse
of over 10,000 sq. feet that anyone will be
has built One New Change.
Atcherly Symes has been responsible for
able to visit. Next door is St Paul’s cathe- bringing in the retailers – including Hugo Fashion includes: Gifts and services includes:
says Timothy Barber dral, and the view of this iconic landmark Boss, Topshop, Karen Millen, Banana Hugo Boss Foyles
is quite stupendous, its great neoclassical Republic and H&M, as well as restaurants Super Dry Oliver Bonas
dome looming across the way, while the that include outlets from Gordon Ramsay H&M Hotel Chocolat

N the thrust and frenzy of City life, it’s vista beyond stretches from the fast-rising and Jamie Oliver – who will be making One Karen Millen Dermalogica
crucial to have somewhere you can Shard by London Bridge to the London Eye, New Change the Westfield of the City. He Next Daniel Hersheson
take yourself for a bit of quiet repose, if taking in Tate Modern along the way. points out that while the Square Mile is far Links
only while you wolf down a sandwich It’s not as if the City is without great from the bland, office-only district it used Swarovski Food and drink includes:
at lunchtime. Problem is, such spaces are views, but unless you’re being wined and to be, it can still be a difficult place to Banana Republic Gordon Ramsay new restaurant
rather thin on the ground in the Square dined at Tower 42, or are lucky enough to engage in full-on retail therapy. “There are Kurt Geiger Barbecoa from Jamie Oliver
Mile – but in a month’s time, one of the work in the Lloyds building or the Gherkin, great shops in the City, but they can be Swatch M&S Simply Food
best escapist spaces for City workers will be accessing them isn’t easy. “The whole point rather disparate, and this brings a large LK Bennett Caffe Concerto
opening eight floors off the ground. of this space is that it’s not a chief execu- number of mid-range shops together,” he Fraser Hart Bea’s of Bloomsbury
The roof terrace of One New Change, the tives’ playground, it’s for everyone,” says says. “It should mean that that lunchtime


modern, which is the general idea. ingly right, and good value at £13.20.

Marylebone I went for dinner, but being a brasserie

Café Luc is open from breakfast, when you
can get a full English or go continental.
There’s also a lengthy brunch menu,
including most of the breakfast
options as well as more fulsome
There are some much pricier options –
Dover sole will set you back £28, a red mul-
let fillet £19.50 and a fillet of Scottish beef
£27 – but Café Luc doesn’t seem bad value.
At £12.50, my dining partner’s moules
marinieres were another option for

gets Euro-chic Tintin, Johnny Halliday, statues of mic-

offerings like steak tartare, salads
and risotto right up to lemon sole, fil-
let of red mullet or chicken supreme.
The variety of beguiling dishes on
offer – come lunchtime, add onglet
steak with shallots, moules marinieres,
duck confit and braised lamb to the list – is
those fancying an evening that’s
lighter on the wallet, and there was
no scrimping on portions. A tower-
ing pile of gleaming grey shells
arrived, cooked properly in white wine
with shallots and parsley, and accompa-
nied by a no-less-towering pile of crisp-as-
Café Luc turating babies and waffles on the list of impressive, assuming they can all be you-like frites. Perfect stuff.
Belgium’s cultural accomplishments. In turned out with the same level of skill and Score one more foodie hit for
50 Marylebone High Street, W1U 5HN fact it beats those easily (apart from Tintin, care. Marylebone High Street, then.
but that might just be me). Those qualities were noticeably present
FOOD hhhhi It’s been launched by Julie van Oostend in the dinner I was served. I started out
SERVICE hhhii and her dad Luc (he’s the man behind Le with brown shrimp croquettes – a couple
ATMOSPHERE hhhii Pain Quotidien) – the family also has a of crusty croquettes filled with luscious
fashionable brasserie in Ghent. Actually prawn meat in a sweet, oozy sauce. I could
Cost per person without wine: £36 Café Luc is not particularly Belgian in style have eaten these all night, frankly, but that
– there isn’t a waffle to be seen on the would have denied me the pleasure of

OU might assume – I think I did – menu – so much as broadly continental. Carbonnades Flamandes a la Duvel – beef
that Marylebone High Street is hard- Well, French anyway. It’s tres chic in the tra- stew in Belgian Duvel beer. This was terrif-
ly in need of another place mixing ditional style of a grand brasserie – creamy ic – large, meltingly soft chunks of beef
dining and café culture. But the pistachio tones, shaded lamps on the walls swimming in a thick, velvety gravy. Big,
crowd packed into the recently opened, and cosy leather banquettes with long, low bold, rustic food that would be easy to get
Belgian-owned Café Luc last Tuesday mirrors running above them. There’s a wrong – how often does one order casse-
evening suggested otherwise – and after copper-topped bar, above which hangs an role and stew dishes at such places, only to
eating there I’m inclined to agree with abundance of yellow, blown-glass bulbs be served meat that’s leathery
them. Café Luc can sit happily alongside that seem both old-world and smartly and tough? – but was satisfy-


WINE MATCHING AT CINNAMON CLUB including all wines. Booking is essential. To Marlborough, New Zealand, while
Love fine Indian food but not sure how to pair reserve your place, call The Cinnamon Club Bouvey-Ladubet, based in St Florent,
it with wine? Fear not: one of London’s finest on 020 7222 2555. is the second oldest producer of
Asian restaurants is putting on a five course sparkling wine in Saumur. The Bordeaux
banquet with wines matched – somewhat FIRST EVER FINE WINE FAIR Wine Council will also be in situ. In addi-
unusually – from the Australia’s oldest family- The first ever Fine Wine fair will be held tion to the opportunity to try hundreds of
owned winery Yalumba. Exciting pairings will in Chelsea early next month, featuring wines, there will be gourmet Spanish hams,
include tandoori king prawn with mace and the finest exhibitors from the new luxurious Italian chocolates and more fine
cardamom paired with an Eden Valley riesling, and old worlds. Little Beauty is an food. Fair from 15-17 Oct, tickets priced from
and pan-seared turbot in tomato and lemon independent and boutique vineyard £20. At the Old Town Hall, Kings Road,
sauce paired with a 2008 Viognier. 8 Oct, £90 in the elemental Waihopai Valley, in Chelsea. To book, go to
28 Lifestyle | TV& Games CITYA.M. 28 SEPTEMBER 2010


6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News 6.30pm Climbing Great 6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm The One Show Buildings 7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm EastEnders; BBC News 7pm The Classroom 7.30pm Grimefighters 7.55pm 7.30pm How to Take Stunning
8pm Holby City Experiment: Part two of two. 8pm New Who Wants to Be a 8pm Help! My House Is Falling Pictures; Five News Update
9pm CHOICE The Secrets of Dylan Wiliam tries to get the Millionaire?: Big-prize quiz. Down 8pm Nature Shock: The Seal
Scientology pupils to act more responsibly. 9pm CHOICE 71 Degrees 9pm Ramsay’s Best Restaurant Ripper; Five News at 9
10pm BBC News 8pm MasterChef: The North: The celebrities spend a 10pm This Is England ‘86 9pm CSI: Miami
10.25pm Regional News Professionals night in tents secured to a 11.05pm Seven Days 10pm CSI: NY; Five News
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SKY SPORTS 1 12.30am European Challenge 10pm Teen Mom 11pm 1.50am King of the Hill 2.10am DISCOVERY HOME &

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7pm Total Wipeout 8pm Ancient Discoveries 10pm Nazi Illnesses 1am Eat Yourself of a country house hotel, focusing on
3am UEFA Champions League ESPN Cherry Goes Dating 9pm Don’t Hunters 11pm America 12am Sexy with Gillian 2.30am I head chef Roland White (Alan Davies)
Goals 4am Revista De La Liga
6.30pm Eredivisie Review Tell the Bride 10pm EastEnders Ancient Discoveries 1am The Didn’t Know I Was Pregnant and his second-in-command Bib.
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Show 7.30pm NFL: Monday 10.30pm Ideal 11pm Family Lost Evidence 2am How the 3am My Shocking Story 4am
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League 10pm UEFA League Review 12.30am Wipeout 3.15am EastEnders: DISCOVERY SKY1
Champions League Goals Russian Premier League Review Kat and Alfie’s Return 4.15am- 8pm How Do They Do It? 8pm The Little Couple 8.30pm
11pm Poker Million 1am 1am AFL Review Show 2am 5.15am Cherry Goes Dating 8.30pm How It’s Made 9pm Super Nurses 9pm FILM
Sports Unlimited 2am-3am Press Pass 2010 2.30am ESPN Trawler Wars 10pm Deadliest Batman and Robin 1997.
World Pool Masters Premier League Kicks 2.45am E4 Catch 11pm X-Machines 12am 11.20pm FILM Kung Fu Killer
Bundesliga Review Show 4am- 7pm Hollyoaks 7.30pm Friends Bear Grylls: Born Survivor 1am II 2007. 1.05am Night Cops
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2002 Ryder Cup Was Won 7pm Four Weddings 8pm of the Hill 12am Scrubs 1am 3.50am Raging Planet 4.40am 4.20am Vroom Vroom a night in tents secured to the vertical
11pm Golfing World 12am Britain’s Next Top Model The Cleveland Show 1.25am Unsolved History 5.30am-6am 5.10am-6am Sell Me the drop with climbing ropes. Kate
Asian Tour Golf Show 9pm Drop Dead Diva The Ricky Gervais Show How Does That Work? Answer Thornton and Gethin Jones present.

Copyright Puzzle Press Ltd,


10 15 29 9 28 7
11 5
Place the numbers from 1 to 9 in each empty cell so that each 17 24 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 35 17
4 6
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 33
above or to the left of it. 11
You can only use the digits 1-9 3 12 10    
   and you must not use the
12 16
same digit twice in a block. 21 7 34 15
  The same digit may occur 20 10 13  
30 13
  more than once in a row or
column, but it must be in a

9 28
    separate block.
6 9
    8 10

1 Galas (5) 1 Aromatic herb (6)
4 At a distance (5)
7 Most disgustingly
2 Bean curd (4)
3 Spicy tomato
Using only the letters in the Wordwheel, you have dirty (9) sauce (5)
   ten minutes to find as many words as possible,
K G 9 Words used to refer 5 Captives (9)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters E to people, places
or objects (5)
6 Begrudge (6)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A N 10 Capital of Egypt (5)
8 Showing an absence

of inquisitiveness (9)
KAKURO is at least one nine-letter word in the wheel.
W N 12 Singer who had a
11 Clinging plant (3)
hit with Shout (4)
QUICK CROSSWORD 8 3 1 3 6 2 1 13 Pleasantly
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optimistic (6)
4 1 2 9 1 8          16 Be similar in end sound,
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9 7 8 6 7 2 3 1 15 Emotion of great
0 $ 5 & $ 8 1 7 , (          eg cat and mat (5)
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WORDWHEEL          20 Discern (9)
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$ 1 , 0 8 6 $ 5 7 6 6 8 9 2 1 3 The nine-letter word 21 Secret store (5)
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& $ 1 $ / % 2 5 ( ' 3 1 5 8 9 8 7

Morgan has four
one-day centuries
and a Test ton to
his name in a little
over a year.
Picture: PA

New batting sensation at Middlesex, left-hander Morgan, in
his own unique, outlandish style, bat-
Eoin Morgan tells Jon ted his way through the ranks for
Ireland, making his one-day debut in
2006 and becoming the first
Couch how he’s ready to Irishman ever to score a first-class
double century with an unbeaten
fulfil his childhood dream 209 against the United Arab Emirates.
But he never gave up on his dream
of playing in the Ashes of pulling on an England shirt and,
after a taste playing for the Lions
against South Africa, Irish team boss

S the children of the Catholic Roy Torrens, finally gave him the
University School in Dublin green light to chase his dream and
picked up their sticks for their join up with the 2009 ICC World
bi-weekly hurling lesson, Twenty squad – and a chance to play
there was one lad standing in line against his old Irish team-mates.
looking slightly lost. Now, with four one-day centuries
It was the class of 1998 when pro- to his name in a little over a year,
fessional cricket in Ireland was light Moggie, as he is affectionately
years away. But Eoin Morgan was a known, has risen from international
young man with a dream and he was- unknown to one of the most exciting
n’t going to give it up without a fight. young stars of world cricket.
“Playing cricket was all I ever want- Indeed, earlier this year he earned
ed to do,” he recalled, “but it wasn’t top pick status in the Indian Premier
an easy ride, it wasn’t played regular- League auction, eventually being
ly enough in Ireland. bought by the Royal Challengers
“Whereas now there are 10 to 12 Bangalore for $220,000.
full-time cricketers in Ireland, in those “It’s been a hell of a year,” Morgan
days there were none. Opportunities explained, “I really am living the
were few and far between.” dream. “First, establishing myself for Collingwood to make his Test debut finally fulfilling the dream. uations in different arenas and I
Morgan’s dream took him to England, and then playing in such a against Bangladesh at Lord’s, and And despite his somewhat believe I can play that natural game
Dulwich College in south-east successful side, winning the retained his place in the side for the unorthodox approach to Test cricket, in a Test match in the same way.
London where he learned the fine art Twenty20 World Cup and moving up subsequent Test series against Morgan believes he can prove a big “Just being talked about in the
of the game – and realised his dream to second in the world, it’s just got Pakistan, scoring his maiden Test cen- hit Down Under and help England same breath as a Ashes series is a
of playing Test cricket for England. better and better. I have to pinch tury at Trent Bridge, thus announc- retain the Ashes urn for the first time huge privilege for me. Playing in
“I remember watching the Ashes as myself at times.” ing himself on the Test arena. in a quarter of a century. Australia this winter gives it even
a young lad and thinking ‘that’s But while Morgan’s flamboyance “Walking out for England in a Test “There has been talk about my more impetus, and although it will
where I want to be’,” he added. “Not with the bat has lent itself perfectly match was a very proud moment in style not being suited to Test cricket, be the ultimate test of our ability and
one particular moment springs to to the limited-overs game, Morgan my life,” Morgan added. “To debut at and everyone is entitled to their character, I believe we can win it.”
mind, but I remember England’s has also proved to selectors he has the such a young age, I didn’t expect it.” views, but I don’t think I have a style,” l Eoin Morgan was talking to City AM
great battles with Australia and the nous to adapt to the five-day format Unsurprisingly, Morgan’s reward he added. “Sure, I have a natural at Stoke Park to launch the partnership
West Indies. I was hooked.” as well. was to be named in England’s 16-man game, everyone does, but I enjoy the between NatWest Black Card and the
While serving his apprenticeship In May, he took over from Paul squad to tour Australia last week – challenge of adapting to different sit- England cricket team.

Henson set for comeback Ecclestone issues cancel
in Barbarians invitational threat over Korean GP
Chisora lined up for title shot
BOXING: Londoner Derek Chisora could
be in line for a shot at Wladimir
Klitschko’s three world titles.
Chisora, 26, apparently impressed the
Klitschko camp when he added the
Commonwealth title to his British belt and win back his place in the nation- have a 90-day check before a race and


with a stoppage over Sam Sexton last al team for the Six Nations and next now we are sort of putting this off,”
weekend. WALES centre Gavin Henson is set to year’s World Cup. NEXT month’s Korean Grand Prix said Ecclestone. “What we’ve done is
An initial offer is being considered by make his first competitive appear- A full comeback will have to wait could be cancelled over safety fears, quite dangerous. It’s a question of do
promoter Frank Warren, although ance for 18 months after accepting an until he has fulfilled his commit- Formula One chief Bernie Ecclestone we cancel the race or not? They say
Chisora has only had 14 career fights. invitation to represent the ments to the television programme has warned. everything will be OK – we have to
Barbarians. Strictly Come Dancing but Barbarians Eccletone says the delayed comple- hope they’re right.”
Saeed quits in Pakistan fall-out Henson, who is currently in self- contracts manager Mike Burton tion of the Yeongam circuit has pre- The Korean International Circuit
CRICKET: Yawar Saeed’s resignation as imposed exile from the game, will insists he will be physically ready. vented F1 officials from inspecting had been due for inspection on 21
Pakistan tour manager was accepted make his comeback as part of the “Obviously our invitation to Gavin the venue, which will host the 24 September, but will instead be
last night by Cricket Board chiefs. Barbarians side to face South Africa at will attract a lot of attention,” he said. October race. assessed on 11 October by Charlie
Saeed, 75, asked PCB chief Ijaz Butt Twickenham in December. “He has other commitments outside Korean race organisers insist all Whiting, race director of motor-
is he could be relieved of his duties in the The 28-year-old has been on unpaid rugby and he is conscious of the need work will be completed on time, but sport’s governing body the FIA.
wake of the side’s troubled tour of leave from his club Ospreys after for match fitness in order to do him- say they have heeded Eccelstone’s Kim Jae-Ho, spokesman for Korea
England. becoming disillusioned with the self and the club justice.” warning and will speed up prepara- Auto Valley Operation, said: “We will
“The chairman has accepted, and the game, following a spell out with an Henson’s Ospreys colleague Mike tions. rush to complete work and FIA offi-
board will announce a new manager in ankle injury. But earlier this month Phillips and Australia’s Matt Giteau “It’s not good. It should have been cials will see a complete circuit when
due course.” he revealed that he wanted to return and Rocky Elsom are also in the squad. inspected six weeks ago. We normally they conduct a final inspection.”
30 Sport CITYA.M. 28 SEPTEMBER 2010

Crawley Town
York..................................(0) 0 Darlington.........................(0) 0
P W D L F A GD Pts
11 7 2 2 16 8 8 23
Donald has vindicated Monty’s faith
Mansfield 11 7 1 3 23 9 14 22
AFC Wimbledon 11 7 1 3 19 12 7 22 Colin Montgomerie’s biggest dilem- East Lake over the weekend. that this was a round designed to
Fleetwood Town 11 6 3 2 18 11 7 21
Newport County 11 5 5 1 15 9 6 20 ma in selecting his 12-man team for Yes, of course, he would have been silence the critics, he would’ve been
Darlington 12 4 7 1 15 9 6 19 Celtic Manor was who to pick from delighted to see Donald end on a high delighted to arrive in Wales yesterday
Tamworth 11 5 4 2 19 17 2 19 Donald, Paul Casey and Justin Rose. ahead of Ryder Cup week, but even if with confidence fully restored.
Luton 11 5 3 3 18 12 6 18
Wrexham 11 4 5 2 18 14 4 17 Omitting the world’s No7 player in Casey had improved on his fourth Read Sam’s Ryder Cup memories
York 12 4 5 3 15 13 2 17 Casey was a brave decision indeed, but place in Atlanta, it wouldn’t have in our 8-page pull-out on Thursday.
Kiddermnstr 11 4 4 3 18 18 0 16 Donald showed just what he’s about mattered a jot to him. His team is
Grimsby 11 4 3 4 12 13 -1 15
Gateshead 11 4 3 4 9 13 -4 15 by taking Jim Furyk all the way in the picked, so it’s irrelevant. Monty’s FED-EX CUP STANDINGS
Rushden 11 4 2 5 12 12 0 14 ON THE GREENS WITH Tour Championship to miss out of the focus has to be solely on his 12 players
Eastbourne B 11 4 2 5 24 25 -1 14 richest prize in golf by a single shot. and his preparation for the week. 1 Jim Furyk (USA) * 2,980pts
11 3 4 4 13 8
11 3 4 4 14 13 1 13
5 13 SAM TORRANCE Furyk survived a nervous finale Another player who took a timely 2 Matt Kuchar (USA) * 2,728
Southport 11 3 3 5 10 12 -2 12 and held his nerve to claim a £7m confidence boost was Padraig 3 Luke Donald (Eng) * 2,700

Kettering 11 2 4 5 10 15 -5 10 UKE DONALD got his big chance jackpot by winning both the Tour Harrington, who finished with a final 4 Charley Hoffman (USA) 2,500
Hayes & Yeading 11 3 1 7 13 24 -11 10 to vindicate his place on the Championship and FedEx Cup. round 64 in the Vivendi Cup.
Forest Green 11 2 3 6 12 20 -8 9 5 Dustin Johnson (USA) * 2,493
Bath City 11 1 5 5 12 20 -8 8 European Ryder Cup team at the To be honest, though, I really don’t Padraig’s form has been questioned
Histon 11 2 2 7 10 22 -12 8 weekend – and he took it with think Monty would have paid too in the run up to Celtic Manor, but 6 Paul Casey (Eng) 2,250
Altrincham 11 1 2 8 8 24 -16 5 both hands. much attention to the goings-on at while I don’t think for one minute * = Playing in Ryder Cup
2.00 1 Whodathought (R L Moore) 7-2 Fav 2 Zakon (E

Ryder Cup
Ahern) 4-1 3 Holy Mackerel (S Hitchcott) 7-1
2.30 1 Amistress (Catherine Gannon) 8-1 2 Barista (S
Hitchcott) 13-2 3 Papas Fritas (E Creighton) 11-1
3.00 1 Lutine Charlie (Matthew Cosham) 9-4 Fav 2 Hierarch
(Ryan Powell) 11-1 3 Collect Art (Lucy Barry) 20-1
3.30 1 Marhaba Malyoon (William Buick) 7-1 2 Ullswater (J
Fanning) 6-1 3 El Mansour (E Ahern) 6-4 Fav
4.00 1 Dolphina (E Ahern) 9-2 2 Mascarene (R L Moore) 11-

stars banned
8 Fav 3 Fascination (Adam Beschizza) 4-1
4.30 1 Saborido (R L Moore) 5-1 2 Viviani (Liam Jones) 6-1 3
Ultimate Quest (S Sanders) 6-4 Fav
2.20 1 Yellow Dandy (Andrea Atzeni) 7-1 2 Supercharged (R
Hughes) 2-5 Fav 3 Forty Proof (S W Kelly) 12-1
2.50 1 Magic Jack (R Hughes) 8-13 Fav 2 Nadinska (Luke

from Twitter
Morris) 11-1 3 Meia Noite (T P Queally) 5-2
3.20 1 Earlsmedic (W A Carson) 7-2 Fav 2 First In Command
(Andrea Atzeni) 7-1 3 Bateleur (Luke Morris) 9-1
3.50 1 Warlu Way (T P Queally) 4-1 2 Countess Comet (Jim
Crowley) 5-1 3 Rock The Stars (R Hughes) 2-1 Fav
4.20 1 Rugell (Luke Morris) 8-1 2 Plato (T P Queally) 5-2 Fav
3 Dazinski (Ashley Morgan) 18-1
4.50 1 Milnagavie (Charles Eddery) 5-2 2 Lucky Breeze
(Harry Bentley) 7-1 3 Cornish Beau (Ashley Morgan) 2-1 Fav

2.10 1 Chilledtothebone (K Fallon) 4-1 2 Soviet Spring (L GOLF week, but a week today I am sure
Keniry) 9-4 Fav 3 Neytiri (N Mackay) 10-1 BY FRANK DALLERES tweeting will be all over the place.”
2.40 1 Tamareen (R Hills) 7-1 2 Sceal Nua (P Dobbs) 2-1 Jt Montgomerie said: “We feel that
Fav 3 Bearheart (S Drowne) 20-1
3.10 1 Spensley (K Fallon) 15-2 2 Dynamic Drive (A Kirby) IT is an edict that could easily have tweeting and Facebook and all of
14-1 3 Aphrodisia (John Fahy) 8-1 been issued in less than 140 charac- these social sites… can get oneself
3.40 1 Dubai Crest (N Callan) 8-1 2 Isobar (K Fallon) 6-4 Fav ters. Players from both teams at the into trouble. We are in the same boat.
3 Akhmatova (S Drowne) 8-1 Ryder Cup have been banned from I think it’s important we focus on the
4.10 1 Mac’s Power (P Cosgrave) 5-1 2 Arteus (T P O’shea)
33-1 3 Five Star Junior (K Fallon) 11-1 using micro-blogging site Twitter job in hand this week.
4.40 1 Hidden Glory (J Rogers) 8-1 2 Anacopa (Ahmed until after the competition finishes “We are here to try regain the tro-
Ajtebi) 10-1 3 Abhar (Kieren Fox) 6-1 on Sunday. phy that Corey has brought back for
European captain Colin us. We have to focus on that job, and
TODAY’S DIARY Montgomerie said he wanted to avoid as Corey rightly says, on Monday 4
(7.45pm unless stated) his team “getting into trouble”, while October, yes, you will find the team
UEFA Champions Lge
Group E his United States counterpart Corey probably on social network sites, but
Basle v Bayern Munich ............................................................................................ Pavin, himself a Twitter regular, not until then.” Montgomerie said
Roma v CFR Cluj-Napoca ........................................................................................ added that it could prove a distrac- Several high-profile sportsmen and he wanted to avoid
Group F tion. women have found themselves in hot his players “getting
Chelsea v Marseille .................................................................................................... Both sides have avid tweeters in water after posting unguarded com- into trouble”.
Spartak Moscow v MSK Zilina (5.30)................................................................
Group G their ranks, with Europe’s Ian Poulter ments on Twitter. Picture: ACTION
Ajax v AC Milan .......................................................................................................... and Rory McIlroy and Americans Cricketer Kevin Pietersen was fined IMAGES
Auxerre v Real Madrid.............................................................................................. Stewart Cink and Bubba Watson by England chiefs after revealing he
Group H among the most frequent users of the had been dropped, while footballer
Braga v Shakhtar Donetsk ...................................................................................... social networking site. Darren Bent upset Tottenham chiefs
Partizan Belgrade v Arsenal ..................................................................................
npower Football League Championship “The team has come to a consen- after venting his frustration at the RYDER CUP | WHO TWEETS?
Burnley v Hull................................................................................................................ sus not to do it,” said Pavin. “It can be protracted nature of his move to
Cardiff v Crystal Palace............................................................................................ a little bit distracting sometimes, Sunderland. EUROPE @F_Molinari UNITED STATES @stewartcink
Coventry v Doncaster................................................................................................ and I think it is important to focus Australian swimmer Stephanie
Derby v Middlesbrough ............................................................................................ @IanJamesPoulter @RC_CAPTAIN_2010 @ZachJohnsonPGA
Leeds v Preston............................................................................................................ on the Ryder Cup and playing in the Rice lost a sponsorship deal and had @Graeme_McDowell @RickieFowlerPGA @HunterMahan
Norwich v Leicester .................................................................................................. matches. to apologise after making an anti-gay @McIlroyRory
We’ve decided to not tweet this remark. @bubbawatson
Nottm Forest v Sheff Utd ........................................................................................
Portsmouth v Bristol City........................................................................................
QPR v Millwall (8pm) ................................................................................................
Reading v Ipswich (8pm) ........................................................................................
Team England
Tragic Newton was helping
Scunthorpe v Barnsley..............................................................................................
Watford v Swansea....................................................................................................
npower Football League One
Bournemouth v Exeter..............................................................................................
Brighton v Brentford..................................................................................................
Bristol Rovers v Tranmere ......................................................................................
move into village
drug probe at time of death after assurances
Charlton v Milton Keynes Dons ............................................................................
Colchester v Dag & Red............................................................................................
Hartlepool v Carlisle ..................................................................................................
Leyton Orient v Walsall ............................................................................................
Peterborough v Notts County................................................................................
Rochdale v Huddersfield ..........................................................................................
Sheff Wed v Oldham.................................................................................................. COMMONWEALTH GAMES

Swindon v Plymouth..................................................................................................
Yeovil v Southampton................................................................................................ his ban the former Wakefield, had been assisting UK Anti-Doping in THE first batch of Team England ath-

npower Football League Two Bradford, Wigan and Leeds player had its enquiries into the use and supply letes moved into the much-maligned
Cheltenham v Oxford Utd ........................................................................................ BY FRANK DALLERES
Crewe v Macclesfield ................................................................................................ been aiding UK Anti-Doping in their of performance-enhancing drugs, spe- Commonwealth Games village in
Gillingham v Southend.............................................................................................. TERRY NEWTON, the former Great efforts to investigate the trade in per- cific details about which are strictly Delhi yesterday after getting the all-
Hereford v Stevenage................................................................................................ Britain hooker who committed sui- formance-enhancing substances. confidential.” clear from bosses.
Lincoln City v Burton Albion .................................................................................. cide at the weekend, had been help- “On behalf of UK Anti-Doping, our Newton is said to have become Some competitors, including triple-
Morecambe v Bury .................................................................................................... ing anti-doping chiefs track down sympathies go out to the family and depressed since having his contract jumper Phillips Idowu have already
Northampton v Chesterfield ..................................................................................
Port Vale v Shrewsbury............................................................................................ suppliers of illegal substances. friends of Terry Newton at this diffi- cancelled by Wakefield, but the pulled out of the Games after the
Rotherham v Bradford .............................................................................................. Newton, who died aged 31 and is cult time,” said UKAD chief executive Rugby Football League yesterday accommodation was described as
Stockport v Accrington Stanley .......................................................................... thought to have been found hanged Andy Parkinson. “While the circum- moved to deflect suggestions that “uninhabitable” and “unsafe”.
Torquay v Aldershot .................................................................................................. at his home near Wigan on Sunday, stances of our relationship with Mr they had neglected Newton since his The 48 members of the hockey,
Wycombe v Barnet ....................................................................................................
was banned from the sport in Newton were hardly ideal, we had enforced exit from the game. lawn bowls and shooting squads were
February after testing positive for respect for his openness and willing- “People in rugby league stayed given the all-clear to move in yester-
SPORTS EDITOR JON COUCH human growth hormone. ness to share his story to help his close to him. He was not left high and day and will be joined today by 36
email And it emerged yesterday that since sport. In recent months Mr Newton dry,” said spokesman John Ledger. other team-mates.
CITYA.M. 28 SEPTEMBER 2010 Sport | Football 31

Wenger: We’ll bounce back from Baggies defeat

when they went down to a shock 3-2 game and that is what I believe we from Manuel Almunia, who was show how good he is.”
PARTIZAN BELGRADE home defeat by West Brom. have learnt from Saturday. heavily criticised for a num- Partizan lost their opener 1-0 to
Wenger offered no excuses, instead “I believe in the intelligence of my ber of errors against the Shakhtar Donestk, but Wenger
lambasting his side’s abject display group players and I have no doubt in Baggies. The Spaniard has an warned: “They are intelligent, with a
ARSENAL and promising an inquest. their talents. We will be highly ankle injury. good technique and if you give them
Now, he is backing the Gunners to motivated and will try to “For Fabianski, it is another room they are always dangerous.”
bounce back in the Champions redress what was not big chance,” Wenger added.
League at Partizan Belgrade tonight – right on Saturday.” “But you want a goalkeeper GROUP H

BY JON COUCH and add to their 6-0 opening game Wenger is also or any player to grab the TEAM PLD W D L F A PTS
mauling of Braga a fortnight ago. backing under- chance when you get it.
ARSENE WENGER insists his Arsenal “The disappointment was very study Lukasz “As a manager you can Arsenal 1 1 0 0 6 0 3
side can recover from their Premier deep, but we can learn from what has Fabianski to take his give a chance to a player
League hangover and continue their happened to us,” Wenger said. first-team chance with who is good enough and I S Donetsk 1 1 0 0 1 0 3
charge in Europe tonight. “We realise that we need to be both hands in Belgrade. believe in his talent. He Partizan 1 0 0 1 0 1 0
The Gunners suffered their first focused in every single game, pro- The Pole will take the gets another opportunity to
defeat of the season on Saturday duce performances in every single goalkeeper’s gloves show how good he is. I want him to Braga 1 0 0 1 0 6 0

Ancelotti plays down Blues slump

Boss Carlo Ancelotti
CHELSEA talks to captain John
Terry as his side pre-
pare for tonight’s
MARSEILLE clash with Marseille.
Picture: GETTY

CHELSEA manager Carlo Ancelotti
insists he has not demanded a reac-
tion from his team despite seeing
their air of invincibility corroded by
back-to-back defeats.
Enforced absences have also hit
Ancelotti’s preparations, with mid-
fielder Frank Lampard among a num-
ber of injured players and striker
Didier Drogba suspended for the visit
of his former club Marseille.
“I don’t ask them to have a reac-
tion. We just have to play our foot-
ball,” said Ancelotti yesterday. “We
have to pay attention and get the
points from this game. I don’t need to
see a reaction from my players; they
will have a good game because it is an
important game for us to arrive at the
top of the group. It is just for this.”
Lampard’s recovery from a hernia
operation has been put back again,
meaning he will now not return until
Florent Malouda in an attacking tri-
ing and players with experience.”
It is not the ideal selection scenario
end defeat at home to West Brom.
“I was surprised by the result of
after next month’s international “I think I have a lot of options,” for Ancelotti as he looks to engineer a Arsenal,” he said. “I said before
break. Captain John Terry is set to Ancelotti added. “We have to consider return to form following the mid- Saturday that it would be very diffi- Chelsea 1 1 0 0 4 1 3
start, but Salomon Kalou and Yossi Daniel Sturridge and Gael Kakuta. It week Carling Cup exit to Newcastle cult to be unbeaten during the sea- Sp Moscow 1 1 0 0 1 0 3
Benayoun are also sidelined, leaving is normal during a season to have two and Saturday’s defeat to Premier son. So we are not so upset to lose our
Ancelotti to choose between young- or three injuries – this is not a prob- League title rivals Manchester City. unbeaten record, but we have to look Marseille 1 0 0 1 0 1 0
sters Daniel Sturridge and Gael lem. We have a good mix in the squad But the Italian said he had been forward. It will not be the last time MSK Zilina 1 0 0 1 1 4 0
Kakuta to join Nicolas Anelka and with young players that are improv- mollified by Arsenal’s surprise week- we lose a game.”

Injured Rooney sidelined Lay-off for Gallas adds to

for United’s trip to Valencia Spurs’ defensive woes
CHAMPIONS LEAGUE tre back so right-back Vedran Corluka

will again be drafted in as cover.

ty he could miss Saturday’s visit to League, and had to twice come from TOTTENHAM’S defensive crisis grew Redknapp was hoping captain

BY FRANK DALLERES Sunderland and England’s Euro 2012 behind to take a point from Bolton. deeper yesterday after William Gallas Ledley King would be fit to face FC
qualifier against Montenegro on 12 They have conceded seven times in was ruled out for three weeks with an Twente, but he hasn’t trained for
TROUBLED Manchester United striker October. those three games, and captain abductor muscle injury. nine days and is still suffering the
Wayne Rooney has been ruled out of Rooney, so often United’s match- Nemanja Vidic admits they must The French defender, who joined affects of his on-going knee problems.
tomorrow’s Champions League trip to winner last season, has been a shad- tighten up at the back as they prepare Spurs on a free transfer last month Of King’s recovery, Redknapp said:
Valencia with an ankle injury. ow of his usual self during the to face the leaders of the Spanish top following his release from rivals “It’s a blow. When you don’t train,
Rooney aggravated the niggling current campaign. He has not scored flight. Arsenal, missed Saturday’s 1-0 defeat you pick up different injuries.
problem during Sunday’s 2-2 Premier a United goal in open play and “It is a big concern that we are con- at West Ham after suffering the “If I went for a run tonight, I’d pull
League draw at Bolton, a match in Ferguson admits the 24-year-old has ceding so many away goals,” said the injury in training on Friday. up with a calf problem because I
which he was substituted after little been adversely affected by tabloid centre-back. “We have to stop doing it. Further tests revealed Gallas’ don’t train regularly. Ledley doesn’t
more than hour. scrutiny following stories about his We cannot let it happen again. Over injury is worse than first thought and train and he picks up little injuries.”
United manager Sir Alex Ferguson private life. the last few years we haven’t given means boss Harry Redknapp is now Spurs are also without Michael
told club officials yesterday that United jet off to Valencia in search that many goals away or even allowed without no fewer than four central Dawson, out with an ankle injury,
Rooney would not be fit to travel to of their first Group C victory with them so many chances. Before we defenders for the visit of Dutch side while Younes Kaboul has calf trouble.
Spain. However, the club has not their away form showing signs of have always looked strong, so this is FC Twente tomorrow night. Indeed, Redknapp can’t even turn
revealed how long his recovery is frailty. They are yet to win on the road not what we are used to. We have to Indeed, as it stands, Sebastien to 18-year-old Steven Caulker, who yes-
expected to take, raising the possibili- in three attempts in the Premier play much better in our away games.” Bassong is his only, fit recognised cen- terday joined Bristol City on loan.


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