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Issue 1,232 Friday 1 October 2010
IRELAND BETS
ALL ON £43BN
BAILOUT PLAN
EU ECONOMY
▲
BY KATIE HOPE
BANK of Ireland was forced to reas-
sure savers their money was safe yes-
terday following the republic’s
revelation that the cost of Ireland’s
banking crisis could surge as high as
€50bn (£43bn) – as it revealed further
bailouts for Anglo Irish Bank, Allied
Irish Banks and Irish Nationwide.
“Customers can have confidence in
Bank of Ireland and all deposits with
Bank of Ireland are secure and 100
per cent guaranteed by the Irish gov-
ernment,” the bank, which raised
€1.7bn in a rights issue in June, said
in a statement reiterating it was in a
“strong financial position” with an
eight per cent tier one capital. The
bank said it wasn’t seeing any unusu-
al withdrawals.
Of Ireland’s top lenders, only Bank
of Ireland and Irish Life & Permanent
will remain free from state control
after the bailouts.
Finance minister Brian Lenihan,
who yesterday admitted the figures
were “horrendous but manageable”,
has long insisted that customers
with savings in all of Ireland’s major
banks are safe, but the scale of the
bank bailout – equivalent to a third of
the country’s GDP – has triggered
ANALYSIS l 10-year government bond yields (%)
13
Greece
11 Ireland
Portugal
9 Spain
7 7
5 5
3 3
Jan 2010 March 2010
FTSE 100 t 5,548.62 -20.65 DOW t 10,788.05 -47.23 NASDAQ t 2,368.62 -7.94 £/$ t 1.57 -0.01 £/¤ ▲ 1.15 +0.01 ¤/$ 1.36 unc
BUSINESS WITH PERSONALITY
STRAUSS OPENS UP ON
CRICKET’S FIXING ROW
EXCLUSIVE INTERVIEW P28
fears that panicked savers will rush to
withdraw their cash.
While the Irish government recent-
ly extended its 100 per cent deposit
guarantee to all Irish-owned financial
institutions until the end of the year,
this protection remains dependent
upon the Irish state remaining sol-
vent. The possibility of national bank-
ruptcy, however remote, has already
seen concerned savers withdraw
money with customer deposits
falling by more than €5bn to €23.1bn
in the first half of this year.
Ireland’s central bank yesterday
forecast that the total bailout bill for
Anglo Irish Bank would be €29.3bn,
but in a “severe hypothetical stress
scenario” said it could reach as high
as €34bn. Irish Nationwide will
receive a further €2.7bn, bringing its
total bailout to €5.4bn. While Allied
Irish Banks will test the markets with
a €3bn equity placing, fully under-
written by the National Pension
Reserve Fund, meaning the govern-
Finance minister Brian
Lenihan says this round
of taxpayer funding for
its banks will save it
going to the EU for cash
May 2010 July 2010
www.cityam.com
ment could end up owning 90 per
cent of the bank, and bringing its
total rescue package potentially up to
€10.4bn.
Lenihan said the bank bailouts
would “bring closure and finality to
the banking problems in Ireland,”
adding that by taking action now it
would avoid having to call on the EU
for a bailout in the style of Greece.
He said he would outline a four-
year plan in November to get its budg-
et deficit, currently ten times the
European Union guidelines for
Eurozone members, to below three
per cent of GDP by 2014, requiring
further “significant” measures next
year – over and above already
announced cuts – to reduce the coun-
try’s borrowing.
The republic has already had three
emergency budgets since 2008 that
have raised taxes and cut wages.
Lenihan said Ireland, which is fully
funded until June 2011, had decided
to cancel its bond auctions in October
and November and would return to
the bond markets as normal in early
2011.
The move reassured the City yester-
day, and the cost of borrowing fell –
with 10-year bond yields dropping
almost 0.25 per cent to 6.37 per cent.
ALLISTER HEATH: P2, NEWS: P5
Source: Thomson Datastream 13
11
9 that said that the scaling back of sub-
September 2010
Rok finance director Ashley Martin has now been cleared of mismanagement at the firm
I’ve been through hell,
says Rok’s departing FD
▲
INDUSTRY
BY MATTHEW WEST
THE finance director of building and
maintenance firm Rok yesterday
spoke of his eight weeks of “hell” as
he stepped down from the firm.
“The whole experience has been
hell. It’s put me through hell, its put
my family through hell,” said Ashley
Martin, as he reflected on the period
since 11 August when he was sus-
pended pending an investigation into
alleged financial mismanagement at
Rok’s heating, plumbing and electri-
cal business.
Yesterday the company cleared him
of any wrongdoing in a statement
contracted work fitting out new
homes with piping and heating was
the cause for the previously lower
profit expectations.
But Martin said he could not
remain a member of the board of Rok
after his fellow board members origi-
TREASURY
TRUCE
OSBORNE BACKS
BENEFIT PAY
REVOLUTION P3
FREE
nally blamed him for the financial
irregularities which led it to issue a
second profit warning earlier this
year.
“It was just untenable for me to
stay [at Rok] after getting the blame
for a profit warning. It has been
insane. I spent 30 years building up
my career. To have this done to you is
terrible,” he said.
Martin said: “Reputation is every-
thing in this business. If you haven’t
got that you haven’t got anything.”
He added: “I’m glad the company
have made the statement they have
clearing my name but I have been
negotiating my exit since the
announcement of the profit warning.
I think it’s clear I wasn’t going to be
able to work with those individuals
[on the board] again.”
Martin is believed to have left the
group with one year’s salary believed
to be in the region of £300,000 and
his full share allocation of around
750,000 shares.
Certified Distribution
02/08/10 – 29/08/10 is 93,782
 2 News
How the euro caused Ireland’s crisis
EDITOR’S LETTER
ALLISTER HEATH
THERE is one aspect of the Irish crisis
that everybody appears to have forgot-
ten about. Yet it goes a long way
towards explaining Ireland’s prob-
lems. It is, quite simply, its member-
ship of the dysfunctional single
currency, an institution which it
should never have joined.
For years, sensible economists had
been warning that the euro’s one-size-
fits-all interest rates and monetary
policy would trigger uncontrollable
bubbles in high-growth countries,
such as Ireland, while depressing
activity in weaker economies, such as
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Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor Ben Griffiths
Night Editor Katie Hope
Associate Editor David Crow
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Art Director Darren Soulsby
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
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WHAT THE OTHER PAPERS SAY THIS MORNING
BUSINESS CALLS FOR REVIEW OF
CURBS ON MIGRANTS
New rules that restrict companies
from hiring foreign workers must be
“reviewed immediately”, the CBI
employers’ body said, putting the
business lobby on collision course
with the government. The Home
Office imposed a temporary limit on
skilled workers coming to Britain
from outside the European Union
because of fears of a flood of applica-
tions ahead of the introduction of a
permanent cap next year.
US CHARGES HACKERS OVER BANK
FRAUD SCHEME
US prosecutors yesterday charged 70
people allegedly involved in a cyber-
crime scheme that used malicious
software to steal more than $3m
from dozens of bank accounts. On
Wednesday, police in London arrested
19 people, 11 of whom were charged
Germany. For years, these warnings
were not heeded, neither by politi-
cians desperate to construct a political
Europe, nor, regrettably, by the big
financial institutions. Many banks
and economists chose to toe the party
line, in some cases to placate Europe’s
political establishment and in other
cases because they were fooled into
believing that the single currency
afforded smaller countries a free
lunch of lower interest rates and sta-
ble currencies.
Ireland would have needed very
high interest rates during the bubble
years; instead, Frankfurt gave it ultra-
cheap money. Even in January 2006,
when many of the more idiotic lend-
ing decisions taken by Irish banks
were being planned, the European
Central Bank’s main interest rate was
just 2.25 per cent. This probably made
sense for Germany and maybe even
for France. But it was an absurdly low
rate for Ireland, which could have
done with rates of eight per cent or
even nine per cent. Inflation in the
HP names the
heir to Hurd
TECHNOLOGY
▲
BY MARION DAKERS
COMPUTER maker Hewlett Packard
has named Leo Apotheker, the former
boss of software firm SAP, as its new
chief executive.
The surprise announcement last
night sent shares in the American-
listed firm down three per cent, as
the company attempted to draw a
line under its previous boss, Mark
Hurd.
Hurd left the company on 6 August
under a cloud after an investigation
into claims of sexual harassment
found he had filed inaccurate
expense reports.
“The investment community want-
ed an outsider to be named CEO,”
said Gleacher & Co analyst Brian
Marshall. “They view HP internally as
a little bit dysfunctional in terms of
over an alleged Zeus attack that stole
£6m from UK bank accounts.
LOTUS AIMS TO REVIVE BOND CAR
GLORY DAYS
Lotus wants to return to its “Bond
car” glory days and take on Porsche
with a plan to relaunch its brand and
triple its production of luxury sports
cars within five years. The legendary
but perennially lossmaking British
carmaker on Thursday unveiled five
planned models and said its owner
Proton had secured £500m to £800m
to back a 10-year turnround.
CABLE JOINS FIGHT AGAINST AIR-
CRAFT CARRIER CUTS
Vince Cable has intervened to stave
off cuts to the aircraft carrier pro-
gramme, echoing the fears of Liam
Fox, the defence secretary, over the
harm to Britain’s shipbuilding indus-
try. The business secretary pressed
the case for protecting the engineer-
ing skills base at a key meeting of the
National Security Council.
Emerald Isle hit 4.2 per cent in August,
way too high; for 2006 as a whole,
Ireland’s GDP surged by 6.0 per cent
and its gross national product by 7.4
per cent. In other words, at the height
of a property, economic and mortgage
boom, Ireland was enjoying negative
interest rates after adjusting for infla-
tion. Companies and consumers were
being paid to borrow; projects that
would never have been worthwhile
were the authorities pricing money
properly were being signed off left,
right and centre. The whole country
was drunk on cheap credit, courtesy
of the euro; the commercial banks, as
ever, were acting as the highly paid
transmission mechanism linking cen-
tral bank to consumers. Everybody
believed that Ireland’s excellent tax
and microeconomic reforms – includ-
ing the 12.5 per cent corporation tax
rate – caused the boom. Of course,
they did account for a large chunk of
the growth and played the key role in
transforming Ireland from backwater
to global hub – but the remainder of
all the issues they had in senior man-
agement in the last couple of years.”
Apotheker was with German soft-
ware company SAP for more than 20
years, and was closely involved in
transforming the firm’s research and
development operations.
HP’s board also named Ray Lane as
non-executive chairman. Lane is man-
aging partner at venture capital firm
Kleiner Perkins Caufield & Byers, and
previously served as president and
chief operating officer at Oracle.
Both appointments are effective
from 1 November, HP said.
Leo Apotheker will
take the top job at
Hewlett Packard after
the departure of
ex-boss Mark Hurd
FISHER-PRICE TOYS RECALLED IN
SAFETY ALERT
More than 70,000 Fisher-Price baby
toys and high chairs sold in Britain
have been recalled by the parent com-
pany Mattel as part of a worldwide
effort in response to reports of chil-
dren being choked, cut or bruised.
High chairs, toys with inflatable balls
and the Wheelies Stand ’n’ Play
Rampway have been recalled in
Britain.
TIMES CAMPAIGN FORCES NPOWER TO
PAY £70M FOR OVERBILLING
Npower, Britain’s fourth-largest
domestic energy company, has
agreed to pay £70m in compensation
to 1.8m customers who were over-
charged for gas. The victory comes at
the end of a two-year campaign,
championed by The Times Money sec-
tion, to secure proper redress for cus-
tomers.
the “growth” was mere froth caused
by excessively low interest rates.
Ireland’s membership of the euro
was thus the single most important
reason for yesterday eye-wateringly
large bailout of the Irish banks, which
will take the budget deficit to 32 per
cent of GDP and its gross government
debt to 96 per cent of GDP. The tragedy
is that nobody is pointing this out: the
political establishment is too closely
implicated and may yet need to draw
on a European bailout fund.
Imagine what would have hap-
pened had Britain also embraced the
single currency: our interest rates –
which were substantially higher than
the Eurozone’s, albeit still too low –
would have stoked our own bubble to
an even greater extent than anything
managed by the Bank of England. The
UK property bubble would have been
even larger and its implosion even
more devastating. We don’t realise it
– but Britain’s bust of 2008-09 could
easily have been much, much nastier.
allister.heath@cityam.com
London Mayor Boris Johnson called the strikes “pointless”
TfL: We’ll move Londoners
TRANSPORT
▲
BY EMMA SADOWSKI
TRANSPORT for London (TfL) has
vowed to keep as many services oper-
ating on Sunday and Monday as possi-
ble as London Underground (LU)
workers stage their latest strike.
If the 24-hour stoppage by LU work-
ers goes ahead on Sunday evening at
7.00pm, the TfL said it will provide
one hundred extra buses, marshalled
taxis and increased passenger capaci-
ty along the Thames.
FLEXIBLE WORKING RIGHTS DELAYED
AS GOVERNMENT BOWS TO PRESSURE
The Government has bowed to indus-
try pressure on red tape by putting off
a key coalition pledge on extending
the right to request flexible working
to all employees, according to cam-
paigners. Employment relations min-
ister Ed Davey yesterday announced
plans to extend the right to request
only to parents of children aged under
18 from next April.
TAXMAN TOLD VAT IS NOT DUE ON
MUSIC REVIEW CDS
Tax experts say European Court of
Justice decision on a £3m VAT case
brought by HM Revenue & Customs
against EMI will mean that companies
can claim for overpaid VAT and that
UK laws on product samples and
small value business gifts will be over-
hauled. Sample products should be
free from VAT, the court has ruled.
CITYA.M. 1 OCTOBER 2010
iPad chemical
firm plans to
float in London
▲
TECHNOLOGY
AZ Electronic Materials is planning to
list in London, the Financial Times
reports this morning.
The chemical company that pro-
vides materials for flat panel displays
such as the iPad could be one of the
biggest flotations in the City this year.
AZ is owned by private equity
groups Carlyle and Vestar Capital
Partners, and makes 70 per cent of its
revenues in Asia, the base for many
techonology manufacturers.
The firm’s finance director is based
in London, and the owners hope to
tap into a glut of City investors with
knowledge of specialty chemicals.
UBS, Goldman Sachs and Deutsche
Bank are said to be managing the ini-
tial public offering. AZ Electronic
could not be reached for comment
last night.
Picture: REUTERS
TfL shot down claims made by
unions RMT and the Transport
Salaried Staffs’ Association (TSSA),
which represent the striking workers,
that last month’s action paralysed
London. LU carried over a million
people during the 24-hour period.
“As we saw in the last strike, the
belligerent actions of the union lead-
erships will not bring London to a
halt,” said Mayor Boris Johnson.
RMT and TSSA union members are
protesting over plans to cut 800 jobs
and close ticket offices.
HUNGARY'S FIDESZ SET FOR BIG WIN
Riding a surge in popularity after
refusing to back down to the
International Monetary Fund,
Hungary’s governing Fidesz party is
set to win a landslide victory in local
elections Sunday. A second decisive
win in six months would give the gov-
ernment the political strength it
needs to make sweeping changes to
the welfare and pension systems.
YOUTUBE STRIKES DEAL WITH FRENCH
MUSIC INDUSTRY
Songwriters and composers will get
paid when their videos are seen on
YouTube in France, under a deal
announced Thursday by the online
video-sharing site and France's lead-
ing music-industry group. The indus-
try group SACEM called the deal
difficult to reach but innovative, and
a victory in its efforts to protect copy-
right and make money online.
CITYA.M. 1 OCTOBER 2010
Treasury will
back benefit
pay revolution
▲
POLITICS
BY MARION DAKERS
THE GOVERNMENT has reached a
truce over the welfare system, which
will see most benefits scrapped and
replaced with a single payment, the
Times reports this morning.
The work and pensions secretary
Iain Duncan Smith has persuaded
the Treasury that the overhaul
would be affordable, the report
claimed.
Duncan Smith and the Treasury
have spent the summer trying to
hammer out a way to reduce the bill
for the welfare system.
Duncan Smith said in July that a
“universal credit” encompassing
housing benefit, jobseekers’
allowance and income support
would simplify the benefits system
and help guarantee that those in
work would be better off.
However, the Treasury has pushed
on the minister to find around £5 of
savings for every £1 the department
spends on changing the system, con-
straining plans for wide-ranging
reform.
The current blueprint will allow
Duncan Smith to declare billions of
pounds in cuts up front, by counting
the savings expected in the new sys-
tem such as a drop in fraud, the
Times said.
An announcement on the trans-
formation is expected at the Tory
conference next week, while details
of the £83bn of public sector cuts
planned by the coalition will be pub-
lished as part of chancellor George
Osborne’s spending review on 20
October.
A spokesperson for the Treasury
declined to comment on the story
last night.
FAST FACTS | LOOMING CUTS
● Chancellor George Osborne will spell out
plans to slash £83bn from the public sector
budget in a spending review on 20 October
● The coalition has already cut £6.2bn after
delaying contracts and reducing other costs
Sony’s Sir Howard Stringer and Tata’s Ratan Tata (r) will be on the panelPictures: PA/ REUTERS
Cameron ready to announce his
panel of business advisers today
▲
POLITICS
BY MARION DAKERS
TWO MORE business figureheads were
named as part of David Cameron’s
panel of business advisors, Sky News
reported yesterday.
Indian businessman Ratan Tata
and Sony president and chief execu-
tive Sir Howard Stringer are set to
join a raft of hand-picked industry
heads in the government’s business
interest group.
Also in the frame are Centrica chief
executive Sam Laidlaw, BAE Systems
chairman Dick Olver and WPP adver-
tising magnate Sir Martin Sorrell.
The Prime Minister’s Office is set to
name the advisory panel today. It is
expected to be a more informal affair
than Gordon Brown’s Business
Council for Britain panel, which
caused controversy before the elec-
tion when the panel said it was happy
to serve under a Conservative leader-
ship. The new group will have some
overlap in Diageo’s Paul Walsh and
GlaxoSmithKline’s Andrew Witty.
News 3
G20 to consider
tougher capital
rules for banks
BANKING
▲
FINANCE ministers in the G20 are
considering a tough capital regime
for the world’s biggest banks that
will go beyond Basel III rules, CNBC
said last night.
The US, however, disagrees with
the proposals to add two to three per
cent to the Basel capital rules, the
report claimed.
A senior official told the broadcast-
er that the proposal would call for
big banks to increase their capital to
somewhere between nine and 10 per
cent. The G20 finance ministers will
meet to discuss the latest Basel rules
on the 19 October in South Korea.
In the UK, Lord Turner of the
Financial Services Authority has
already expressed a wish to see more
stringent capital ratios imposed on
banks to prevent funds drying up.
In a speech last week Turner said
that “if philosopher kings were
designing a banking system entirely
anew for a greenfield economy, they
would choose still higher ratios”,
though he accepted that the Basel III
agreement was a good starting point.
The international banking rules
will impose a 7.5 per cent ratio on
banks’ Tier 1 capital holdings by
2018. Many in the banking industry
had feared the levels would be much
higher.
 4 News
BP expects to
pay dividend
by next year
▲
OIL AND GAS
BY EMMA SADOWSKI
BP’s new chief executive Bob Dudley
moved to further restore the belea-
guered oil giant’s image yesterday
after he said BP may resume paying a
dividend to shareholders in the new
year.
Dudley, who takes over the top job
from Tony Hayward today, said that
BP’s board will meet in the coming
months to discuss restoring its divi-
dend payout.
The group suspended investor pay-
outs after having to set aside $20bn
(£12.7bn) to pay for the clean up of
the Gulf of Mexico oil spill.
“The board will get together and
talk before the end of the year about
restoring a dividend in some form in
the first quarter. Its obviously for the
board to decide, [but] from what I see
happening in the performances of
the businesses, I believe we will get
there,” said Dudley yesterday.
Last year, BP paid out about £7bn in
dividends, making it the single
biggest dividend payer in the FTSE
100 list of leading companies.
His comments will help to restore
shareholder confidence in BP after
the Gulf spill and repeated gaffes by
Haywood tarnished the group’s repu-
tation.
Dudley also said that BP was still
committed to doing business in the
US and said that the company would
have to demonstrate that it had
“learned its lessons” after the Gulf
disaster. The new oil boss also pledged
to make BP “a good compelling invest-
ment for shareholders”.
ANALYSIS l BP
p 431.55
440
400
360
320
5 Jul 23 Jul 12 Aug 2 Sep
US judge Martin Feldman said he cannot decide whether to overturn the ban yet
US ban on deepwater oil
drilling will stay in force
OIL AND GAS
▲
BY MARION DAKERS
1 Oct
THE US ban on deepwater drilling
looks set to stay in place for now, as
both a government head and a judge
yesterday talked down the possibility
of an early end to the rules put in
place after the BP oil spill.
Judge Martin Feldman said yester-
day he would move quickly on oil
firms’ challenge to the moratorium,
22 Sep but added he needed more informa-
tion before he decides whether to
overturn the ban.
Meanwhile, interior secretary Ken
Salazar, who introduced the drilling
freeze, said he was not ready to allow
work to restart. In a speech to intro-
duce rules on drilling safety, seen as a
precursor to lifting the ban, Salazar
said: “There will always be risks asso-
ciated with deepwater drilling, but
we will only lift the suspensions
when I am comfortable that we have
significantly reduced those risks.”
CITYA.M. 1 OCTOBER 2010
China hits out at
America’s yuan
tariff legislation
CURRENCIES
▲
CHINA remained defiant in the face of
America’s move to treat its currency
value as an illegal trade subsidy yester-
day, and suggested the law could
breach World Trade Organisation
(WTO) rules.
A representative for the Chinese
government said in a regular press
briefing that the passage of the US
Currency Reform for Fair Trade Act is
“an excuse to engage in trade protec-
tionism against China”.
“[It] can only harm China-US trade
and economic relations, and will have
a negative effect on both countries’
economies and the world economy,”
said spokeswoman Jiang Yu.
The House of Representatives voted
348 to 79 in favour of the bill on
Wednesday night, though it must
win approval from President Obama
and the Senate before it becomes law.
The measures allow the US to
impose extra tax on Chinese exports
to balance out what it sees as a chron-
ically undervalued currency.
However, Yu said yesterday America
falls foul of WTO agreements by tar-
geting China’s yuan.
On Wednesday, China’s central
bank promised to increase flexibility
in the exchange rate, three months
after ending its policy of pegging the
yuan to the dollar.
CITYA.M. 1 OCTOBER 2010 Sovereign Debt Crisis 5

Moody’s removes
Spain’s AAA rating
EU ECONOMY easier ride than Ireland and based on tax increases and meas-
▲

BY HARRY BANKS Portugal. ures that cannot be continued for

RATINGS agency Moody’s cut
Spain’s credit to Aa1 from AAA
yesterday, removing the last of its
highly-valued triple-A ratings but
saying it did not expect to cut
again soon thanks to efforts at fis-
cal reform.
The one notch downgrade was
widely discounted by the markets,
following cuts by Standard and
Poor’s in April and by Fitch in May.
Spain is one of the countries
being watched most closely by
financial markets in Europe’s
struggle with billowing debt, but
investors have so far given it an
Moody’s said a key driver for the
downgrade was the significant fis-
cal deterioration that Spain experi-
enced and the challenges the
government will face in reducing
the budget deficit in an environ-
ment of only moderate economic
growth.
It said it expected the economy
to grow just one per cent annually
on average for years to come. The
government should be able to
meet its targets this year and next
but further reforms were needed
to cut the deficit beyond 2011.
“A large part of the fiscal consol-
idation for this year and next is
many years,” Moody’s lead analyst
for Spain Kathrin Muehlbronner
said.
“Spain will need more structur-
al measures to bring down its
deficit,” she said.
The rebalancing of Spain’s econ-
omy away from construction will
also take several years.
“Spain’s economy adjustment
process is ongoing – household
leverage is still high, there's a large
overhang of unsold properties and
while exports have picked up nice-
ly they are still dependent on what
happens in France and Germany,”
Muehlbronner said.

CITY VIEWS: ARE YOU WORRIED ABOUT THE CONSEQUENCES OF A

COUNTRY SUCH AS IRELAND OR SPAIN DEFAULTING? Interviews by Victoria Scholar
Spanish Prime Minister José Luis Rodríguez Zapatero says the economy is improving Picture: REUTERS
MARK GROVES | EIB
“Not directly in terms of my work however a major country defaulting would
affect everyone through the direct country risk and the risk from the expo-
sure our clients have. The knock-on effects on the financial services industry
as a whole would most certainly be a cause for concern.”

YASMINE MOEZINIA | NOMURA

“I am not personally worried by this. Recently the UK economy has been
going from strength to strength. Business and consumer confidence is
improving, and house prices are looking extremely resilient and that's what
concerns me most.”

ALEX BALFOUR | SMITH & WILLIAMSON

“I would regard a Spanish sovereign default as much more serious than an
Irish sovereign default, within the Eurozone. However, a Spanish default is
less likely than an Irish, given the relative scale of the banking busts in the
two economies, relative to GDP.”

Business leaders say public sector

cuts are the way to reduce deficits
deficit. KPMG cites Alberto Alesina
and Silvio Ardagna’s 2010 NBER
working paper and argues that
spending cuts are not only more
benign in their effects on growth
than tax rises, but expansionary,
improving confidence and bring-
ing strong positive effects on pri-
CITY COMMENT vate investment.
Conservatives with pet budget
MARC SIDWELL priorities may not be consoled,
however. Tuesday’s leaked letter by
yesterday’s announcement of the
Anglo Irish bailout bill, KPMG
found that the business communi-
ty is eager for action. Not only did
they show the world’s highest per-
centage of support for welfare and
defence cuts to reduce the deficit –
83 per cent backed each – but there
was a remarkable 100 per cent con-
sensus that Ireland’s public sector
pay bill must be slashed.
Perhaps most refreshing of all is

T
HE Conservative party confer-
ence starts on Sunday and
George Osborne may take
some comfort from a new
KPMG report that supports the case
for austerity, though he may find it
too radical in other ways. Meeting
the Deficit Challenge is a compre-
hensive analysis of the historical
evidence on deficit reduction. It
concludes that decisive, front-
loaded public spending cuts are
the best answer to a ballooning
Liam Fox to David Cameron
protested against cuts to the armed
forces. But a KPMG survey of senior
corporate decision makers released
alongside their report found that
75 per cent of those surveyed in the
UK supported defence cuts to help
reduce the deficit, the third high-
est level of support for such cuts in
the world, well above the global
average of just 47 per cent.
In Ireland, where the national
deficit has grown even worse with
KPMG’s look to the medium term,
which suggests “a radical re-engi-
neering of government” to reduce
costs. The report recommends
“exploring new opportunities in
areas like infrastructure privatiza-
tion”. Paul Kirby of KPMG in the UK
argues “private involvement may
need to go deeper into the heart of
government”, including schools. If
so, today’s austerity could be just
the start of far larger changes in
our relationship with the state.
 6 News
Criteria for loans gets tougher
▲
BANKING
BY MARION DAKERS
SMALL businesses had more access to
credit in the last quarter than any
time this year but many companies
remained wary of taking on debt, the
Bank of England said yesterday.
A survey by the Bank showed that
demand for loans tailed off in smaller
companies in the three months to the
start of September.
Lenders meanwhile expect to sup-
ply a broadly similar amount of cred-
CBI criticises
migrant cap
▲
POLITICS
BY DAVID CROW
EMPLOYERS’ group the CBI has
thrown its weight behind Vince
Cable, the business secretary, by
warning that government plans to
cap non-EU immigration could ham-
per the economic recovery.
The government is consulting on
plans to introduce a permanent cap
next spring, and has put a temporary
limit in place until then. Home secre-
tary Theresa May has limited the
number of non-EU migrant workers
to 24,100 between now and April.
But the CBI will today say that the
interim arrangements, which have
been put in place to prevent a spike in
applications ahead of the permanent
cap, have been “poorly managed”.
John Cridland, CBI deputy director
general, said: “The system is proving a
real headache for firms trying to keep
on valued members of staff, or recruit
specialists from overseas.
“These problems are undermining
confidence that the permanent cap
America’s biggest hedge funds rake in
gains while smaller managers struggle
▲
HEDGE FUNDS
BRIDGEWATER has increased its lead
as the biggest hedge fund manager in
America, figures released yesterday
claimed.
The firm now manages around
$50.9bn (£32.4bn), up from $38.6bn
last year to also make it the biggest
riser, according to AR magazine’s
biannual rankings. Bridgewater, a 35-
it in the last three months of 2010 as
in the current quarter, and expect
default rates to fall.
The central bank’s quarterly Credit
Conditions Survey also showed
lenders had “tightened credit scoring
criteria” over the past six months,
and expect to tighten them even fur-
ther during the next three months. It
said lenders had told them they were
adopting a more “cautious approach”
Secured lending to households,
made up mostly of mortgages, fell in
the third quarter and were forecast to
will work. The migration system must
support, not hamper growth.”
The CBI will call on the govern-
ment to prioritise skilled workers
that have been offered a job. It will
also say multi-national firms must be
able to move their staff around freely
using intra-company transfers (ICTs).
Cable is leading the fight against
the policy in cabinet, and has warned
that the cap could “damage” the com-
pany, a claim refuted by Downing
Street and the Home Office.
Yesterday he told City A.M.: “The
argument is still being made, and
we’re dealing with it constructively
with the Home Secretary. Obviously
we’ll listen to what the CBI has to say.”
Other cabinet ministers, including
schools secretary Michael Gove and
justice secretary Ken Clarke, are sym-
pathetic to his point of view.
An aide to home secretary Theresa
May said: “We understand we need to
bring the best and brightest here, but
we also have a policy to bring down
overall net immigration, and that’s
what we’ll do.” MORE POLITICS: P8-9
year-old fund firm founded by Ray
Dalio, comfortably outstrips nearest
rival JP Morgan, which looks after
$41.1bn in its hedge funds business.
The survey shows there are 217
hedge funds managing more than
$1bn each, and between them take
care of assets worth over $1.9 trillion.
The number of firms in the list has
increased from 205 this time last year.
However, only 54 per cent of hedge
decline further, according to the
report.
Spreads on corporate lending also
narrowed.
“Some lenders commented that
heightened concerns about the out-
come of the stress tests on the
European banking sector ... had tight-
ened funding conditions temporari-
ly,” the Bank said.
The Bank of England carried out
its survey of banks and non-bank
lenders between 13 August and 3
September.
Italy’s UniCredit selects new chief exec
▲
BANKING
ITALIAN bank UniCredit named insid-
er Federico Ghizzoni as its new chief
executive yesterday, a week after
Alessandro Profumo was ousted in a
boardroom coup.
The central Bank of Italy had urged
UniCredit to appoint a successor
quickly, before the bank begins to
flail in its efforts to rebuild after the
fund managers in the list have added
value to their assets this year, said AR.
The biggest loser was D.E. Shaw,
which has seen the value of its assets
under management slashed by over
$5bn in the last year, taking its total
to $17.8bn. The firm is in the throes of
cutting ten per cent of its workforce.
Paulson & Co, whose flagship fund
lost 11 per cent last year, is in third
place after gaining $4bn overall.
CITYA.M. 1 OCTOBER 2010
Growth of US economy revised
up as consumer spending surges
$68.8bn (£44bn) to their value, rather
▲
US ECONOMY
than $63.2bn as first thought.
THE US government yesterday Inventories grew by $44.1bn in the
revised up its second-quarter GDP first quarter.
growth by 0.1 per cent to 1.7 per cent. The tenth of a percentage point
Personal consumption was revised increase in GDP for the three months
up from an original estimate of two to 30 June added $3.4bn to the US
per cent growth to 2.2 per cent, the economy. But economists warned
biggest quarterly leap in consumer that import numbers suggested that
spending in three years. This com- recovery from recession would
pared with a 2.1 per cent rise in pur- remain slow.
chases in the first quarter. Businesses GDP was still far below the first
built up their inventories, adding quarter’s 3.7 per cent growth rate.
Federico Ghizzoni
takes the top job
at UniCredit
after a 30-year
career at the
bank
financial crisis. the loop.”
Ghizzoni, 54, was selected unani- He added that the board had not
mously to rise from his role as one of appointed a director general. A bank-
four deputy chief executives to steer ing source said the board could name
the bank through its recovery. one or two directors general at its
He suggested yesterday he would next meeting, in four weeks.
continue the bank’s strategy of Ghizzoni joined the bank in 1980
expansion, telling reporters: as a customer relations manager,
“UniCredit is a European group. We’ll before working up to his most recent
keep on growing organically in post as head of central and eastern
Europe. There are no transactions in European operations.
TOP 10 | HEDGE FUNDS IN THE AMERICAS
Source: AR Magazine
Firm AUM $ billions
Bridgewater Associates
JP Morgan
Paulson & Co.
50.9
41.1
31
Soros Fund Management 27
Och-Ziff Capital Management Group 25.3
BlackRock 22.83
Angelo, Gordon & Co. 22.68
Baupost Group 22
Farallon Capital Management 20
King Street Capital Management 19.3
CITYA.M. 1 OCTOBER 2010 News 7

Rolls-Royce gets new chief JOHN RISHTON

CHIEF EXECUTIVE,
ROLLS-ROYCE
tenure at the carmaker.
Rishton joined BA in 1994 and mov-
ing up the ranks, eventually took over
the role of chief financial officer. He
retained that post for four years until
his late 2005 departure for
Rishton, who spent four years as Royce’s board and is chair of the Amsterdam based, Royal Ahold.
▲

ENGINEERING
BY EMMA SADOWSKI
BRITISH engine maker, Rolls-Royce
has confirmed that the Royal Ahold
boss is to become new chief executive
as Sir John Rose prepares to retire.
John Rishton, who is currently
chief executive at the Dutch super-
market group, will take up the post
next March when Rose stands down.
Rose will leave Rolls-Royce after 26
years, of which he served 14 years as
the group’s chief executive.
chief financial officer at British
Airways (BA), will be faced with the
tough challenge of driving Rolls-
Royce forward amid expected cuts to
the defence budget and ongoing
problems with its engines.
“John [Rishton] has a proven track
record as a chief executive of a global
company and has a background in
aerospace and manufacturing,” said
chairman Simon Robertson.
Rishton already holds a spot as a
non-executive director on Rolls-
group’s audit committee.
He joined Ahold in 2006 from BA as
executive vice-president and was later
promoted into the chief executive
position.
Rishton is to be replaced by Ahold’s
chief operating officer, Dick Boer who
will take over the chief executive role
once Rishton leaves next year.
Meanwhile, Ian Strachan will
takeover Rishton’s job as audit chair
on an interim basis until Rolls-Royce
finds a replacement.
DESPITE a five-year posting in the
Dutch supermarket industry, John
Rishton is no stranger to the auto and
aviation sectors having spent the
majority of his career at both Ford
Europe and British Airways (BA).
The newly appointed Rolls-Royce
chief executive began his career at
Ford in 1979 and held a number of
senior positions during his 15-year
Rishton officially joined Ahold on 1
January 2006 as the group’s execu-
tive vice-president and chief financial
officer but was promoted a year later
to president and chief executive.
That same year Rishton also took
up a non-executive director role on
Rolls-Royce’s board.
In April Rishton was appointed to a
second term at the top of Ahold, but
tendered his resignation yesterday to
return back to his transport roots.

ANALYST VIEWS: HOW DO YOU EXPECT ICAP’S UBS says Basel

Icap revenue BUSINESS TO FARE IN FUTURE? Interviews by Victoria Bates
JAMES HAMILTON | NUMIS SECURITIES
preparation will
delay dividends
up as trading “ The movement to a rising interest rate environment
will stimulate trade directly in interest rates, bonds and FX –
which will positively impact most of Icap’s product lines. This,

▲
BANKING

activity rises coupled with anticipated revenue share gains by the higher
margin electronic division, is driving our forecasts.

VIVEK RAJA | PANMURE GORDON

”
UBS shareholders let out a collective
groan yesterday when the bank said it
will not issue a dividend until at least
2013, instead opting to preserve capi-
tal ahead of tough new Basel III rules.
The Swiss bank has not released

“
Spencer said the firm’s current funds to its shareholders since 2007
▲

FINANCIAL SERVICES
BY VICTORIA BATES
THE WORLD’S largest inter-dealer bro-
ker Icap expects first-half sales to
come in nine per cent stronger than
level of performance should put it on
course to hit analyst expectations
over the full year to March, with cur-
rent pre-tax profit forecasts falling
within the range of £333m to £357m.
and it will now be at least three years
The business is definitely going in the right direction until payments resume.
in terms of diversity, and it is well positioned for the most UBS follows several other lenders
who are starting to provide more clar-
likely structural reform outcomes – namely the IT update of ity on the impact of the new rules on

last year as trading activity picked up
again following the financial crisis.
Icap yesterday said the active high
frequency markets had boosted its
post trade business and electronic
broking division, which in September
pioneered first electronic market for
Icap posted a pre-tax profit of
£333m in the previous financial year,
though this year’s results will be
impacted by higher borrowing costs
after the group refinanced its debt at
the turn of the year.
Last week, Icap filed a lawsuit
”
the market and an increased focus on risk management, bank capital and liquidity, unveiled
which will boost Icap’s post trade business. three weeks ago. Shares in UBS,
Europe’s largest wealth manager by
assets, fell 1.3 per cent on the back of
the news.
Chief financial officer John Cryan
NIC CLARKE | CHARLES STANLEY said: “The dividend commencement

trading interest rate swaps.
Icap chief executive Michael
Spencer said politicians and regula-
tors “should be thrilled” by the firm’s
work in setting up the new platform,
which would make the market more
against 38 of its Singapore brokers
and its Swiss rival Compagnie
Financiere Tradition, in an attempt to
stop the staff leaving the business.
Spencer yesterday admitted that the
situation remains uncertain, but
“
date is a little uncertain. Sometime in
the period of Basel III introduction
The good news is that full-year forecasts for Icap are we’ll be able to resume our returns to
on target. However, earnings remain volatile, the regulatory shareholders in the form of a divi-
dend or even share buyback.
environment is uncertain, credit markets have ended the peri- “I’d be expecting by 2013-14 to be in

”
“resilient, robust and transparent” – a added that its potential impact is od quieter and Icap’s equity derivatives businesses have been a position where we’re comfortably
key concern in the wake of the col- “not currently regarded as likely to be adversely affected by investors’ lower risk appetite. on track, unless something extraordi-
lapse of Lehman Brothers. material” to the group’s results. nary comes out on Monday.”

Bakers poaches Luxembourg law firm Freshfields reshuffles key

and E&Y team to launch new office roles as promotes Lawes
Collin Fessmann, including key part- “We’ve been in Europe for more executive Ted Burke, who will
▲

LEGAL
BAKER & McKenzie, the world’s
largest law firm by revenue, is to open
a new office in Luxembourg in a
move that sees it take over a local 15-
lawyer practice and five tax special-
ists from accountants Ernst & Young
(E&Y).
As part of the new launch, Bakers
has acquired local law firm Findling
ners Jean-Francois Findling, Raphael
Collin and Laurent Fessmann. In an
unusual move for a law firm, Bakers
has also poached a team of five tax
specialist from E&Y led by Andre
Pesch.
Findling and Pesch will lead the
new office, which will predominantly
focus on advising funds on tax, corpo-
rate and finance related matters.
than 50 years now but it has become
increasingly obvious that we’ve need-
ed to be in Luxembourg to fully
respond to our clients’ needs,” said
James Burdett, who leads the City
funds practice at Bakers.
Burdett said the new office will
link back to the City as an increasing
number of funds are looking to regis-
ter in Luxembourg.
LEGAL
MAGIC CIRCLE law firm Freshfields
Bruckhaus Deringer has handed
London partner Will Lawes the senior
partner title as part of a management
reshuffle.
Lawes, who recently co-headed the
firm’s financial institutions practice,
was voted into the role yesterday.
He will be joined at the top by chief
become managing partner and tax
partner Stephan Eilers, who will take
over the executive partner role.
All three will officially move into
their respective titles in January 2011
when current senior partners Guy
Morton and Konstantin
Mettenheimer stand down.
Managing partner Peter Jeffcote is
to become the firm’s general counsel.
 8 Regulation CITYA.M. 1 OCTOBER 2010

Businesses warn mountain

of red tape will cost billions
and cost businesses £189.2m. tion campaign. announcements from the Coalition
▲

REGULATION
BY DAVID CROW
A MOUNTAIN of new red tape will
cost firms billions of pounds, busi-
ness groups warned yesterday.
The British Chambers of
Commerce (BCC) said a raft of new
employment regulation and the new
Equality Act, which becomes law
today, would hamper job creation
Meanwhile the national minimum
wage will today rise by 13p to £5.93 an
hour, while apprentices will be enti-
tled to a wage of at least £2.50 an
hour.
And employment legislation due to
be passed between now and 2014 will
cost firms a staggering £11.3bn,
despite the government promising a
bonfire of red tape during the elec-
David Frost, director-general of the
BCC, said: “If private sector businesses
are to offset job losses in the public
sector, the significant costs of employ-
ing people must be reduced. As aus-
terity measures start to bite,
companies need the flexibility and
freedom to boost employment and
drive our economic recovery.
“While we have heard some good
about reviewing and scrutinising
upcoming red tape, businesses are yet
to see the benefits.”
The Institute of Directors (IoD) also
hit out at the government’s decision
to extend the right to request flexible
working to parents of children under
18 from next year.
“This is particularly unwise when
we know that creating another for-
mal employment right would add to
the already excessive amount of
administration businesses have to
conduct to comply with regulations,”
a spokesperson for the IoD said.
Meanwhile, the IoD voiced its oppo-
sition to the coalition’s £2bn levy on
the banking sector, warning it would
pave the way for future governments
to increase it while encouraging
banks to relocate overseas.
“There is clearly public concern
about how some of the banks have
behaved which needs to be addressed,
but this should be done in a way that
doesn’t encourage the banks to move
their headquarters out of the UK,”
said Miles Templeman, director-gener-
al of the IoD.
He added: “There is a risk that the
bank levy, as currently designed, will
drive banking business away.”

Equality Act may cause

surge in Tribunal claims
surge in claims, particularly related
▲

LEGAL
BY EMMA SADOWSKI
LAWYERS warned that the Equality
Act, which comes into force today,
could cause a flood of claims to hit
tribunals if businesses fail to comply
with the new rules.
The Equality Act 2010 was intro-
duced by Labour deputy leader
Harriet Harman’s and fulfilled a 2005
manifesto commitment.
The Act brings together nine differ-
ent anti-discrimination laws, includ-
ing the Equal Pay Act, and aims to
simplify legislation in this area.
Legal experts estimate that tri-
bunals could be hit with a 10 per cent
to the new “combined discrimina-
tion” offence, which allows employ-
ees to lump together a number of
discrimination claims into one
action. “In recent months we have
seen a surge in interest among busi-
nesses as they look to update internal
policies to deal with new areas of dis-
crimination and, potentially, a sub-
stantial increase in employment
tribunal claims,” said Carolyn Miller,
a lawyer with McGrigors.
The Act also includes measures
such as, the removal of pay secrecy,
positive discrimination enforcement,
and laws against third party harass-
ment and disability discrimination.

EQUALITY ACT | KEY IMPLICATIONS FOR BUSINESSES

Pre-employment health checks
There are now limited circumstances
when you can ask a prospective employee
health-related questions before you have
offered them a job. Employers are still
entitled to screen applicants about health
after making an offer or after including
the applicant in a short-list.
Extension of employment tribunals
Employment tribunals can now make rec-
ommendations covering an employer’s
workforce rather than simply individuals
involved in employment litigation. Failure
to comply could be damaging to the
employer’s reputation and be used in evi-
dence against the employer in future dis-
crimination claims, says Rachel Dineley at
Beachcroft law firm.
Pay
Pay secrecy is no longer enforceable –
action taken against employees for being
involved in such a pay discussion will be
classed as unlawful victimisation. In
terms of pay differences, a claim of direct
pay discrimination can be made, even if
no real person comparator can be found,
says Acas.
Discrimination
Harassment by non-work colleagues on
discriminatory grounds can give rise to
legal liability for an employer if the com-
plainant has suffered such harassment on
two previous occasions, according to law
firm Mayer Brown International.
Employers can only defend these claims if
they can show they took reasonable
steps to stop the third occasion occur-
ring.
Recommendations
Firms should review their Equal
Opportunities Policies and recruitment
processes to ensure they are compliant.
Employers should take the opportunity to
audit their current practices.
CITYA.M. 1 OCTOBER 2010 Politics 9

Miliband faces Balls problem

of becoming shadow chancellor. Aides to Miliband suggested Balls

▲
POLITICS
BY DAVID CROW
JUST as Labour recovers from the fra-
ternal rivalry that gripped its confer-
ence this week, it looks as though a
matrimonial battle is about to com-
mence.
New Labour leader Ed Miliband
wants to appoint the former work
and pensions secretary Yvette Cooper
as his shadow chancellor.
But Ed Balls – her husband – has
coveted the top economic brief for
over a decade. He knew he would not
win the leadership, but threw his hat
into the ring to improve his chances
However, sources inside the
Miliband camp were yesterday insist-
ing that Cooper would be much bet-
ter in the role, arguably the second
most important job in opposition.
“Does he want a pugilist like Ed or
a firm but fair voice of reason from
Yvette? The truth is we absolutely
need someone to bring the UK round
to our argument,” an ally said yester-
day.
“If Ed becomes shadow chancellor
it could end up being a shouting
match between the boys whereas
Yvette could frame the language in
ways that the public understands.”
could be offered the job of shadow
business secretary, allowing him to
take on Vince Cable. But there are
growing fears that Cooper will turn
down the job out of loyalty to Balls.
If Cooper does rule herself out, the
Labour leader will likely have to give
the post to Balls, despite his reserva-
tions.
Along with his wife, the former
schools secretary and Gordon Brown
ally, is the only senior Labour MP
with enough grounding in econom-
ics to prepare the party’s response to
the comprehensive spending review
on 20 October.

Ed Balls could
find it hard to be
a bag carrier for
his wife Yvette
Cooper

How Labour can

win business back
POLITICAL COMMENT
DAN CORRY
LABOUR’S new leader Ed Miliband cer-
tainly has a job in reconnecting the
party with the business community.
Think back to the election cam-
paign. Hardly a business or business
group had anything good to say about
Labour, while many lined up to pub-
licly back Tory policies.
But business did pretty well over the
Labour years since 1997 – at least until
we hit the financial crisis and world
recession. If you look at new firm cre-
ation, profitability, the progress of the
FTSE, or the path of business invest-
ment – it all looks pretty decent.
What business certainly does not
like is change and uncertainty – it
wants a bit of predictability and consis-
tency in policy and Ed Miliband needs
to give that high priority.
But in addition he should be aware
that the phrase “the business commu-
nity” is wildly misleading.
Big business cares about interna-
tional tax rates, having infrastructure
built and skills upgraded, wants to
keep Britain at the heart of Europe
and – frankly – cares greatly about per-
sonal tax rates. SMEs on the other
hand worry most about new regula-
tion they cannot even keep up with –
and want government to keep the big
boys off their backs.
White van man has more practical
concerns (not least on the price of
petrol).
At first, Miliband can enjoy the
coalition burning its own bridges with
business. If recovery does not result
soon from the drastic deficit reduction
plans then no strand of business will
be best pleased – including those who
do business with the public sector.
We may get corporation tax reduc-
tions but if they are paid for by the end
of investment and other tax reliefs
then there will be as many moans as
cheers. And what will business make
of Vince Cable and his take on mod-
ern capitalism?
Second, he should make sure he and
his team talk and listen to business as
much as possible. Behind the lobbying
and self interest, business always
knows what is going on.
Third, as soon as he can he should
try to set out some principles for
where reform of tax and regulation
would head under a Labour govern-
ment – and, if he gets in, promise to
stick to it.
Fourth, while he may want fairness
in industrial relations – as would most
businesses – he must make clear that
strikes are rarely the solution.
Finally, he must set out what he
feels is best for the country in creating
wealth – including a more active
industrial policy and a sensible macro
policy.
Some of this business will welcome,
some they may disagree with – but
clarity and no special favours is the
right policy and the only sensible way
to regain the respect of business. And
maybe even a bit of their support.
Dan Corry was an adviser on the econo-
my to ex-Prime Minister Gordon Brown
 10 News
Compass serves up growth
▲
SUPPORT SERVICES
BY HARRY BANKS
COMPASS Group said it expected full-
year earnings to rise by around 15 per
cent after sales growth accelerated in
the second half boosted by new con-
tract wins and improved retention of
existing customers.
The group, which counts Chelsea
Football Club, London’s O2 arena, the
Bank of England and the US Senate
among its clients, said revenue
growth, excluding acquisitions,
improved to over five per cent in the
second half of the year compared
with 0.4 per cent in the first half.
Harvey Nash
sees City jobs
bounce back
▲
RECRUITMENT
BY JOHN DUNNE
RECRUITMENT specialist Harvey Nash
said yesterday that a rise in jobs in
financial services had helped the
company to boost its profit.
The firm saw pre-tax rise to £2.6m
from £1.8m a year earlier as new life
was breathed into the jobs market fol-
lowing the recession.
An increase in regulation has seen
companies recruit more risk special-
ists, according to the company.
Banks are also hiring more IT spe-
cialists as mergers – like that of Lloyds
and HBOS – have created problems as
incompatible computer systems have
caused confusion.
Harvey Nash chief executive Albert
Ellis said: “Things are looking better.
We have seen an improvement in jobs
in the City.
“Companies are employing more
permanent staff and the added regu-
lation means companies need special-
ists to deal with that.
“Jobs in tech are also picking up
and things seem to be improving.”
The company saw revenue drop
despite the profit rise.
Ellis attributed the lower revenue
to a fall in the number of contract
Corporate lending in Europe, Africa
and the Middle East rises to $574bn
▲
FINANCIAL SERVICES
BY HARRY BANKS
COMPANIES in Europe, the Middle
East and Africa (EMEA) borrowed
$574bn (£365bn) of syndicated loans
in the first nine months of 2010, up
16 per cent on the same period a year
ago as the loan market was boosted
by a jumbo loan for BHP Billiton,
according to Thomson Reuters data.
Lending in the third quarter
totalled $212bn, with 21 per cent
taken by BHP’s $45bn loan to back its
For the full-year, it expected rev-
enue growth to be around three per
cent.
However, including acquisitions
and, at constant currency rates, it is
expected to be around four per cent.
Compass, which operates in 50
countries, said its operating margin is
expected to have improved by around
40 basis points over the full-year.
The group said the ongoing chal-
lenging economic conditions are like-
ly to continue to impact organic
revenues in the near term but said it
was encouraged by its pipeline of new
business, while the strength of its bal-
ance sheet is enabling it to make
staff being employed.
He added: “There is less activity
with contracts but on the whole
things are picking up.”
However, he issued a stark warning
to the government that the recovery
should not be strangled through a
hike in taxes in the financial services
sector.
Ellis said: “The government has to
be very careful not to overstep the
mark and attack the City because of
the huge contribution it makes. To
raise taxes would be a very bad idea
with a fragile economy.”
The company announced an inter-
im dividend of 0.935p per share has
been recommended, up from 0.850p
in 2009.
ANALYSIS l Harvy Nash
p 52.50
52 1 Oct
48
44
40
36
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
bid for Potash Corp, the biggest loan
since brewer ABInBev’s $45bn acquisi-
tion loan in 2008.
Banks are more willing to lend for
big takeovers and with borrowing
cheap would-be buyers are seizing the
chance, meaning that sensible deals
that were ruled out because financ-
ing was too scarce or costly may now
return to the agenda, even if they run
into the tens of billions of dollars.
BHP’s loan signalled the return of
big-ticket M&A for the first time since
2008. The deal pushed the third-quar-
acquisitions.
Shares in the group, closed down
1.5 per cent yesterday at 530.5p, valu-
ing the business at £10bn.
ANALYSIS l Compass
p 530.50
570
550
530
510
490
5 Jul 23 Jul 12 Aug 2 Sep
EX-MPC MEMBER JOINS CREDIT SUISSE
FORMER Bank of England Monetary Policy Committee member Kate Barker has joined
Credit Suisse as a senior adviser. Barker, who spent nine years on the MPC, was formerly
a chief economic adviser at the CBI. Sir Alan Budd, who stepped down from Credit Suisse
in May to spend a fleeting stint as the first chairman of the government’s Office for
Budget Responsibility, has also rejoined the bank as a senior adviser. Picture: REUTERS
ter acquisition loan volume to $57bn,
the highest quarterly total for M&A
since the fourth quarter of 2008.
With $60bn of loans in the
pipeline – deals in syndication but
not yet signed – the market is on
track to beat last year’s $650bn annu-
al total, the lowest since 2003.
The third quarter is traditionally
the quietest three months of the year,
since it includes the summer holi-
days, but it still managed to record
the second highest quarterly total
since the second quarter of 2008.
A market ripe for consolidation
COMPASS has come a long way since
Turkey-Twizzler-gate. It is now the
world’s largest food business, with
operations in 50 countries and annu-
al revenues of £13bn. According to
yesterday’s numbers, things are
going from strength to strength.
Momentum is clearly on the
1 Oct firm’s side. Organic sales grew 0.4
per cent in the first half, and five per
cent in the second. Revenues in the
North American region, Compass’
biggest, grew by 5.5 per cent over the
full-year, against 2.8 per cent in the
first six months. Sales in Europe
were flat, with trading particularly
tough in the UK, but Brazil and
Australia helped the rest of the
22 Sep
Blackstone’s James says
capital is difficult to raise
▲
PRIVATE EQUITY
TONY James, president of US private
equity business Blackstone Group,
said yesterday there isn’t enough cap-
ital available from investors to fund
all the opportunities he sees in the
market.
“In 2005 and 2006, if you put it out
well, you could raise as much as you
could invest,” James, 59, said at the
Bloomberg Dealmakers Summit in
New York.
He added: “That’s no longer the
CITYA.M. 1 OCTOBER 2010
world grow revenues by six per cent.
The firm is also dripping in cash,
with free cash flow of £650m and
net debt of around £700m. It will
likely move to a net cash position
soon, leaving it free to return cash to
shareholders or buy bolt-on targets.
The global food services market,
worth £200bn a year, is ripe for con-
solidation. Just 40 per cent is current-
ly outsourced, and Compass has just
seven per cent of the fragmented
market, but at this rate, it will soon
have much more.
BOTTOMLINE
Analysis by David Crow
Ofgem plans
to halt quiet
price hikes
▲
ENERGY
ENERGY suppliers will have to warn
customers 30 days in advance before
raising power and gas prices if a plan
by watchdog Ofgem wins approval.
Under current rules, suppliers can
put up prices without notifying cus-
tomers for up to 65 days afterwards.
The rules will come into effect at
the start of 2011, providing suppliers
do not object. Energy secretary Chris
Huhne has already warned that the
government may take legal action
against energy firms if they block
reforms.
“This is a welcome step forward in
getting energy companies to play fair
with their customers by giving
advance notice of price increases,”
said Huhne.
He added: “It’s important people
know about price hikes before they
are charged, so they can budget.”
The regulator said that new rules
would give householders more
chance to switch supplier or reduce
their energy use to help counter the
effect of increased prices.
“This information makes it easier
to shop around for a better energy
deal and to evaluate the benefits ener-
gy efficiency measures can deliver,”
said Andrew Wright, Ofgem’s senior
partner for markets.
Wholesale gas prices have soared in
2010, pushing up wholesale power
prices and raising the possibility of
further retail price hikes.
case.”
Blackstone, the world’s biggest pri-
vate-equity firm, has raised $13.5bn
(£8.6bn) for its sixth buyout fund, 40
per cent less than it gathered for its
previous pool.
In the past year, the company has
sold $1bn of debt to fund acquisitions
and hire teams to diversify to offset a
decline in buyouts. Its largest unit
runs fund of hedge funds and credit
investing, with $52.4bn of assets.
“The economics are not going to be
attractive for a few years,” James said.
 The Capitalist
MEREDITH
WHITNEY
FEARS BANK
APOCALYPSE
A DIRE warning yesterday to the invest-
ment bankers of the world, as one of Wall
Street’s most famous banking analysts,
Meredith Whitney, called the apocalypse
(Part II).
Whitney, a former Oppenheimer & Co
analyst who now runs her own advisory
firm, is one of the most dedicated bears in
the business, having begun by betting
that Citi would run out of cash to pay a
dividend and coming out the other end to
predict the next financial crisis.
Yesterday, the blonde bombshell of
doom turned her laser vision on bank
bonuses and investment banking job cuts,
reiterating her forecast that 80,000 will be
laid off on Wall Street alone (heaven
knows how many she reckons will go
worldwide) and that year-end bonuses are
likely to “disappoint dramatically”.
Let’s hope, for once, that she’s barking
up the wrong tree.
POKER FACE-OFF
To the exclusive Les Ambassadeurs club in
Mayfair last night for a high-stakes poker
evening attended by the great and the
good of the gaming and business worlds.
To register for this event visit:
www.rbs.co.uk/markets
This adver tisement contains numerous trade marks belonging to The Royal Bank of Scotland Group plc and other companies in the RBS Group. These trade marks include, but are not limited to, The Royal Bank of Scotland logo, The Royal Bank of Scotland and RBS. If you are in doubt
as to whether an item is a trade mark of The Royal Bank of Scotland Group plc or a member of the RBS Group, please contact us for clarifi cation at the registered offi ce address The Royal Bank of Scotland plc, Registered in Scotland No 90312. Registered Offi ce: 36 St Andrew Square,
Edinburgh EH2 2YB. RBS is authorised and regulated in the UK by the Financial Ser vices Authorityy. RBS is an authorised agent of The Royal Bank of Scotland plc N.V in cer tain jurisdictions.
11
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“Meredith
Whitney is
predicting
80,000 Wall
Street layoffs
and bonuses
that will
dramatically
Rellis (above) said his style inspiration
disappoint” was actor Cary Grant and championed a
classic style, with a navy double-breasted
pinstripe suit, double-cuffed white shirt
and solid tie the cornerstones of his work
wardrobe.
Whitney says 80,000 bank jobs are in danger on Wall Street Picture: GETTY
Ladbrokes chief executive Richard Championship (if that’s not a contradic-
ALL ABOUT THE MONEY
A sleek black board game drops onto The
Glynn, PKR founder Jez San, Irish tycoon tion in terms). Capitalist’s desk, claiming to be a financial
Dermot Smurfit, restaurateur Antonio version of the hugely popular world-dom-
Carluccio, PR guru Matthew Freud, ination game Risk.
Trinity Mirror chief Sly Bailey and actress
Barbara Windsor were all among the
SLEEK AND CHIC The aim of “Billionaire Tycoon”, as the
Kudos for American commodities broker new game is known, is for players to build
guests who flocked to the evening, which Greg Rellis, an employee at OTC Europe, their global business empires as fast as
kicked off with a dinner and auction and who yesterday took first prize in a com- possible, becoming the richest and most
later moved on to a poker tournament. petition to find the best dressed successful mogul of them all through
The evening managed to raise over banker in London, instigated by acquiring, trading and selling businesses.
£200,000 for “Raising the Stakes”, a chari- Savile Row tailor Cad and the City workers are likely to be a dab hand at
ty fund set up by the gaming industry in Dandy. it naturally, though if anyone wants any
aid of the Great Ormond Street Hospital. The firm said it had received tips, the makers advise would-be
Prizes at the event included private cook- over 20,000 votes in the competi- billionaires to heed several points
ing lessons with Carluccio himself, a trip tion, in which Barclays’ incoming – including remembering that
to Vegas and poker lessons with legendary chief executive Bob Diamond took sixth “you won’t win by being nice” and
player Mike Sexton, and an ultra-VIP pack- place and Florent Gerard of Bank of “in business there is nothing personal, it’s
age to the final of the World Darts America finished as runner-up. all about the money”.
 12 News
Monetise joins mobile scheme Orange JV announces
▲
FINANCIAL SERVICES
BY STEVE DINNEEN
UK MOBILE banking and payments
group Monetise has announced a
major partnership to supply software
for Visa’s new contactless payment
system.
Last week City A.M. revealed Visa
will roll out a network of payment
points where users can use their
mobile phone to pay in stores.
Now Monetise has said it will part-
ner DeviceFidelity to provide software
to process the payments, with the
London-based firm taking a small per-
centage of each transaction.
M&C Saatchi
expects Xmas
adverts boost
▲
ADVERTISING
BY STEVE DINNEEN
AD AGENCY M&C Saatchi hopes a
bumper Christmas for retailers will
help it beat full-year expectations.
The update came as Saatchi posted
a 17 per cent rise for pre-tax profit to
£6.3m and the same size sales rise to
£58.2m, for the six months to the end
of June.
The news adds to hopes that the UK
is mounting a sustained recovery,
with advertising seen as a barometer
for the wider economy.
However, the firm remains cau-
tious about next year, saying the mar-
ket is still unpredictable.
Saatchi also announced it has
added the Olympic Delivery
Authority to its client list.
Analysts at Numis said the half-year
results were “excellent”, raising their
rating to “buy” from “add” and target
price to 147p from 131p.
Chief executive David Kershaw said
he expected analysts to raise their rev-
enue predictions for the year to £116-
117m, from about £110m, and also
nudge up their pre-tax profit num-
bers.
He said: “I think you will see a
vibrant, competitive Christmas ahead
Peer-to-peer bank reaches £100m in
arranged loans and expects to grow
▲
BANKING
BY STEVE DINNEEN
ONLINE peer-to-peer lender Zopa has
smashed past the £100m arranged
loans mark as demand for alternative
banking surges.
The bank says the success of its
model, where individual lenders and
borrowers agree their own terms, is
partly a reflection of low interest
rates. Chief executive Giles Andrews
told City A.M. he expects the firm to
rapidly increase its share of the UK
Analysts at Evolution Securities
project medium-term revenue esti-
mates of £15m from the deal.
DeviceFidelity will produce a spe-
cial microSD chip that will slot into
most smartphones and Monetise will
produce the software to communi-
cate with the contact points. Monetise
has long-standing partnerships with
both DeviceFidelity and Visa.
Visa is coming to the end of a trial
based in Sitges in Spain before
launching a partial UK roll out in
time for the 2012 Olympics.
The firm believes the technology
has the potential to provide a lucra-
tive new revenue stream. Visa has
for our retailers, which is why we can
certainly see visibility through to the
end of this year, and financial services
is still very competitive.”
Kershaw added: “If you could lock
in the current trading we would all
be very happy. Any concerns are
about what might happen in the
course of the next year.”
In March the ad agency revealed a
27 per cent drop in full-year pre-tax
profit on flat sales. However, it pre-
dicted sales would pick up in 2010.
It also announced a tie-up with
the Tories in the run up to the gen-
eral election, renewing a relation-
ship that spans decades and
includes the iconic “Labour isn’t
working” poster in 1979.
ANALYSIS l M&C Saatchi
p 1 Oct
115
105
95
85
5 Jul 23 Jul 12 Aug 2 Sep
lending market from one per cent
over the next few years.
He said: “There is no reason we
can’t have 10 or 20 per cent of the
market. There are far more people
wanting to borrow than there are
lenders.
“We have the best performing loan
book in the UK, better than the high
street banks with a default rate of just
0.7 per cent. Zopa provides hard evi-
dence that person-to-person lending
works and can be hugely beneficial
for both borrowers and lenders.
1.7bn users worldwide but this is
dwarfed by the 4.7bn people who use
mobile phones.
ANALYSIS l Monitise
p 21.50
24
1 Oct
22
20
18
5 Jul 23 Jul 12 Aug 2 Sep
SUPERFAST BROADBAND HITS THE BEACH
Daily Sport publisher is forced to ask
for loan holiday despite return to black
111.50
▲
MEDIA
SPORT Media Group (SMG), the pub-
lisher of the Daily Sport and Sunday
Sport was forced to ask for a six
month “holiday” on its £50,000 a
month loan from Royal Bank of
Scotland, it admitted yesterday.
The red-top publisher warned sec-
ond-half profit is likely to fall short
22 Sep
of expectations and said its working
“Both groups have enjoyed a far bet-
ter deal than the banks offer. Given
the banks show no sign of reducing
the huge spreads they charge between
borrowing and lending, we are sure
this growth will continue.”
Zopa chief Giles
Andrews says he
expects the online
bank to continue to
grow exponentially.
1,200 jobs will be axed
▲
TELECOMS
EVERYTHING Everywhere, the tie-up
between France Telecom’s Orange
and Deutsche Telekom’s T-Mobile in
the UK, said yesterday it would cut
1,200 back office and management
jobs.
The company said the roles were
duplicated across the two businesses,
which merged in July, and will affect
around 7.5 per cent of its 16,000
22 Sep
strong workforce.
Everything Everywhere said cus-
capital was under pressure.
This is despite the group return-
ing to profit for the first time in two
years. Sport Media made an operat-
ing profit of £800,000 in its first-
half, versus a loss of £400,000 in the
same period last year.
The firm said that so far in the
second half it has seen a “solid per-
formance” from the newspapers,
with some circulation gains but con-
Ex-State Street workers
charged over subprime
▲
BANKING
TWO former top State Street execu-
tives were hit with securities fraud
charges yesterday for misleading
investors about a risky subprime
mortgage-laden fund and tipping off
favored clients.
The US Securities and Exchange
Commission (SEC) said it charged
John Flannery, a former member of
State Street’s executive management
group, and James Hopkins, the for-
CITYA.M. 1 OCTOBER 2010
tomer service staff and retail store
workers would not be affected.
The group, which has nearly 28m
customers, has headquarters in
London, Hatfield and Bristol.
Earlier this week the joint venture
said it has completed its merger inte-
gration ahead of plan.
The firm announced in its second
quarter results it has grown its con-
tract customer base by 8.6 per cent
year on year. It said Ebitda for the sec-
ond quarter was £309m, with rev-
enue growing one per cent.
BT chief executive
Ian Livingston
(right) yesterday
launched a major
fibre broadband
network in
Cornwall as part of
the firm’s goal of
providing super-
fast internet to 66
per cent of the UK
by 2015. BT worked
with the local
authority and
Brussels to fund
the roll out to some
of the more remote
parts of the county.
tinued pressure on advertising rev-
enues. It added it was optimistic
that recent initiatives in its digital
division will produce an improved
performance for the rest of 2010.
SMG chairman Martin Robinson
said: “A focus on stabilising the core
businesses saw the disposal of two
loss-making subsidiaries. As a result,
all trading group entities are now
profitable and cash generative.”
mer head of product engineering for
North America. The SEC alleged that
Flannery and Hopkins marketed one of
State Street’s bond funds as an
“enhanced cash” investment strategy
that was an alternative to a money-mar-
ket fund. However, by 2007 the fund was
“almost entirely invested” in subprime
residential mortgage-backed securities
and derivatives.
State Street said it “has resolved this
matter, both in terms of addressing client
concern and settling with the SEC.”
CITYA.M. 1 OCTOBER 2010
Stone will advise
new SME bank on
hunt for investors
BANKING
▲
BY MATTHEW WEST
A NEW business bank specialising in
lending to small and medium sized
enterprises (SMEs) is launching an
international fundraising which aims
to raise £100m in start-up funds.
Most of the bank’s management
team are currently under contract
elsewhere in the City but have
already opened discussions with the
Financial Services Authority (FSA) to
acquire a banking licence.
Subject to FSA approval the bank
expects to launch by the second half
of next year under the name British
Enterprise Bank.
The bank is being advised by a
number of entrepreneurs and finan-
ciers including the economist, profes-
sor Merlin Stone.
Stone said the bank was looking for
3i trebles buyouts
after restructure
FINANCIAL SERVICES
▲
BY JOHN DUNNE
PRIVATE equity firm 3i Group tre-
bled its buyout investments in the
five months to August after a
recent shake-up at the firm saw its
head of buyouts resign, it said yes-
terday.
Investment in buyouts increased
to £236m from £86m in 2009, with
overall investments up more than
65 per cent to £257m, 3i said.
Realisations from investments
sold fell to £129m from £448m in
2009. 3i’s chief executive Michael
Queen said the group had made
good progress growing the compa-
ny over the period.
Queen has led a number of
changes at the firm in recent
AIG reaches deal with government
on plans to pay back US taxpayers
▲
INSURANCE
AMERICAN International Group
(AIG) laid out a plan yesterday that
sets the company on a path for an
accelerated payback of taxpayer
bailout money, but also increases
the risk for the government.
The plan, which comes a little
over two years after AIG was res-
cued from the brink of collapse,
will see the Federal Reserve Bank of
New York getting repaid in full and
ending its involvement in AIG, leav-
ing the company to deal with just
the Treasury Department.
a range of investors from £1m
upwards.
Stone said: “We are obviously keen
to find significant investment but we
are not looking for people who are
expecting a serious short term
prospect.”
He added: “We believe the British
Enterprise Bank will fill a gap in the
market by providing good value for
customers and offer a new source of
much-needed funds to SMEs.”
It intends to open a network of
more than 20 branches in business
parks of regional cities around the
country.
Branches will be staffed with busi-
ness bank managers with the entire
business model designed to serve
SMEs that have been unable to access
adequate funds from mainstream UK
banks. The bank intends to focus on
companies with at least 250 staff.
weeks, merging the buyouts team
with the growth capital business
that specialises in buying minority
stakes in fast growing businesses.
The move led to the departure of
3i’s leading dealmaker Jonathan
Russell, a 24-year veteran of the
firm. 3i also announced a deal for
debt management firm Mizuho
Investment Management earlier
this week, a move designed to bol-
ster the group’s corporate debt
investing business, and one which is
seen moving the firm further from
a buyouts model to a broader asset
management business.
Meanwhile, high asset prices con-
tinue to weigh heavily on new deals,
with Queen saying the firm would
keep its focused approach, targeting
sectors such as healthcare, where
The Treasury will convert some
of its AIG securities into common
shares, increasing its ownership
stake to 92.1 per cent from nearly
80 per cent. That stake will be sold
off over time.
The Treasury will also effectively
buy out the Fed’s interest in two
large AIG units that are being sold.
Under the repayment plan, the
Treasury will get about 1.66bn
(£1.06bn) AIG common shares,
worth $62bn at Wednesday’s clos-
ing share price, in exchange for the
$49.1bn of AIG preferred shares it
now holds. The deal is expected to
News 13
Canada, France
CHEESE BUSINESS BOOSTS DAIRY CREST
probe HSBC’s
Swiss accounts
▲
BANKING
FRENCH investigators are probing
some 1,500 Canadian-registered Swiss
bank accounts at HSBC as part of a
crackdown on unreported wealth, the
head of Canada’s revenue agency said
yesterday.
Authorities are looking into
accounts obtained from a former
HSBC worker who allegedly stole the
records from the bank and handed
them over to investigators. Canadian
tax authorities are working with the
French investigators.
HSBC, Europe’s largest bank, said it
was cooperating with the probe.
The paper trails marks the latest
breach of strict bank secrecy laws that
make Switzerland a popular tax
haven, and comes as Canadians are
increasingly storing money in off-
shore tax havens.
“The largest accounts are now
DAIRY CREST, the food business which makes Clover and Cathedral City, said in a trad- being audited, and others will follow,”
ing update its sales over the last six months were in line with expectations and ahead of Keith Ashfield, minister of national
the same period last year. The firm, led by chief executive Mark Allen (inset), said its revenue, said in a statement issued
cheese products had led the growth in the company. Picture: GETTY last night.
the group still sees good value. But
Queen added the competition for
assets will help 3i sell businesses at
attractive prices. Queen said there
is strong demand for general indus-
trial companies with a good product
range, manufacturing efficiencies
and international prospects.
ANALYSIS l 3i 286.90
115 p 1 Oct
113
111
109
5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
close by the end of the 2011 first
quarter and will give taxpayers an
instant paper profit of more than
$10bn, showing the insurer is mak-
ing progress in disentangling itself
from the government and posi-
tions the company to tap the capi-
tal markets again.
But at the same time, it increases
the risk for taxpayers, as AIG draws
down more of the funds authorised
under the $182.3bn bailout and the
government swaps preferred stock
for common, which can yield a
profit but also a loss if the company
does not perform well.
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CITYA.M. 1 OCTOBER 2010
Tate & Lyle is sweet on 2010
ture in its bulk ingredient business
▲
FOOD
where corn sweeteners saw good
BY HARRY BANKS demand but industrial starches and
SWEETENER and starches maker ethanol had more difficult trading.
Tate & Lyle said it expects annual “The encouraging start to the year
profit to rise, after building on an has continued in the second quarter,
encouraging start to the year over particularly within Speciality Food
the summer. Ingredients, with good operating
Chief executive Javed Ahmed said performance and solid demand in a
he expects “progress” in full-year number of our markets,” Ahmed
pre-tax and operating profits, driven said.
by growth in the speciality sweeten- Ahmed, who took over in October
ers and starches business including 2009, has promised to focus on the
its sucralose sweetener Splenda. group’s fast-growing speciality
These businesses, estimated to sweeteners and starches at the
make 55 per cent of group profit, expense of its sugar and bulk com-
were balanced by a more mixed pic- modity ingredients.
Cenkos denies
Panmure bid
as profit falls
tion. “I think it creates opportunities
▲
FINANCIAL SERVICES
for Cenkos. We may be able to prize
BY HARRY BANKS
away clients and dissatisfied individu-
CENKOS Securities has no interest in als,” he said.
the sector’s prime bid target, Cenkos’ underlying interim operat-
Panmure Gordon, although Cenkos’ ing profit fell 7.4 per cent to £5m, but
chief executive said his company Melling hoped Cenkos’ second half
could benefit from any disruption at profits would be “slightly up” on
Panmure. those of the first-half.
“I’m more interested in acquiring It saw strong growth in its wealth
teams and individuals,” Cenkos chief management business with funds
executive Simon Melling said, as the under management rising to £982m
company reported lower first-half at the end of June, up from £657m a
profits yesterday. year earlier. An interim dividend of
Britain’s mid-tier stockbroking sec- 2p has been proposed, down from 5p
tor has recently been stirred by signs last year.
of sector consolidation, as the indus- “We’ve had a good start to the sec-
try faces pressures from fewer deals ond half. We were closing deals in
due to financial market turmoil. July and August,” said Melling.
Earlier this month, Evolution Cenkos shares closed 3.8 per cent
Securities said it was considering bid- higher at 109p yesterday giving the
ding for smaller rival Panmure group a market capitalisation of
Gordon, while UK broker Alexander around £74m. Panmure’s market
David is eyeing a bid for peer value stands at roughly £44m while
Hoodless Brennan. Evolution’s market capitalisation is
In the past, Cenkos has looked at around £200m.
rivals Close Brothers and Arden Britain’s smaller, independent
Partners, but Melling said mergers investment banks and brokers have
between brokers were often hard to posted mixed first-half results.
pull off. Panmure and Ambrian Capital
He added that Cenkos could bene- reported interim losses, while Collins
fit from any disruption at Panmure Stewart and privately-held Liberum
or Evolution caused by the bid situa- Capital had higher first-half profits.
CITY MOVES | WHO’S SWITCHING JOBS
Threadneedle
The investment manager has appointed
Vanessa Donegan, a founding member of its
investment team, as head of Asia and global
emerging markets.
Donegan has 30 years of experience in fund
management, including her most recent role as
Threadneedle’s head of Asia Pacific equities.
She will now be responsible for overseeing the
management of £6.5bn of assets under man-
agement – over a tenth of the firm’s total pool.
UBS ment for the emerging markets.
The Swiss bank has appointed Paul Raphael, who will also be a member
Raphael as head of wealth manage- of the UBS Wealth Management execu-
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
As part of this strategy, the group
agreed to sell its European sugar
operations in July to privately owned
American Sugar Refining for £211m,
breaking a 150-year link to sugar,
and hopes to sell its remaining sugar
business in Vietnam and molasses
unit in Britain by end-2010.
Analysts have said an eventual sale
of its bulk ingredients business is
possible.
Polly Barclay at broker JP Morgan
Cazenove said: “This positive update
but cautious outlook is in line with
expectations given Tate is up an
absolute 15 per cent in the month of
September.”
BEST OF THE BROKERS
64
ANALYSIS l Michelin
€ 55.81
1 Oct
60
56
52
5 Jul 23 Jul 12 Aug 1 Sep 21 Sep
MICHELIN
Citigroup believes the market will take until
the end of 2010 to get more comfortable
with Michelin’s investment case. The bro-
ker, which rates the stock as “overweight”,
estimates the €1.2bn rights issue causes
around 11 per cent dilution, which implies
new cash is utilised at a similar return as
the rest of the business today.
Regal Petroleum chief executive steps
down after Ukrainian disappointment
▲
OIL
OIL explorer Regal Petroleum said its
wells in Ukraine had performed poor-
ly and it would carry out a strategic
review, adding that its chief executive
David Greer was stepping down.
The company said yesterday it had
agreed to sell its licence in Romania
to Chevron for $25m (£15.9m), as part
of a move to refocus its activities sole-
Edited by Victoria Bates
tive committee, has spent his 25-year
career at Salomon Brothers, Merrill
Lynch and Credit Suisse, where he
stepped down last year as head of
investment banking for the Asia Pacific
region.
Deutsche Bank
The bank has hired Sébastien Avot as a
director in its distribution and emerging
market loan trading team, which sits
within the structured trade and export
finance division of global transaction
banking.
Avot, who will be based in London,
will focus on distributing syndicated
Premium cake market
slump hits Finsbury sales
▲
FOOD
BAKER Finsbury Food Group saw
sales fall for the first time in its histo-
ry as the recession took its toll on the
premium cake market.
Group revenue for the 52 weeks to
3 July 2010 was £168.3m, down 5.9 per
cent year-on-year, although the com-
pany did manage to increase profits
before tax by seven per cent to £5.4m,
excluding one-off savings. The compa-
ny’s cake operation, which accounts
for 74 per cent of revenue and
29
ANALYSIS l Paddy Power
€
25.78
1 Oct
27
25
5 Jul 23 Jul 12 Aug 2 Sep
PADDY POWER
Credit Suisse initiates coverage of Paddy
Power with an “outperform” rating and
target price of €30.70. The broker says an
operationally leveraged UK retail expansion
for Paddy Power and market share growth
in online should provide scope for revenue-
driven consensus upgrades over the next
six to 12 months.
To appear in Best of the Brokers email your research to notes@cityam.com
ly on Ukraine announced earlier in
September.
“Following the poorer than antici-
pated production achieved from well
MEX-120 and the work-over pro-
gramme in Ukraine, the company is
undertaking a strategic review of
reservoir performance,” Regal said.
Chief executive David Greer had
resigned, Regal said, and chairman
Keith Henry would take over his
unsecured and structured loans for
global borrowers into the EMEA region.
He joins from BNP Paribas, where he
was most recently responsible for sell-
ing loans in France, Russia, CIS and
Turkey.
Begbies Traynor
The professional services consultancy
firm has hired Christopher Clayton to
its London pensions advisory team as a
partner.
Clayton joins from Close Brothers
Corporate Finance, where he was a
managing director and head of the pen-
sions advisory group. Prior to that, he
News 15
includes Memory Lane and
Lightbody, saw sales drop by 9.7 per
cent during the period, due to an
overall decline in the cake market
and a decision to exit low-margin
business.
“Current trading for the first eight
weeks since the half year is in line
with expectations, with revenue
growth of 10 per cent in absolute
terms and five per cent on a like-for-
like basis, after eliminating the
impact of Livwell,” Finsbury said in a
statement.
ANALYSIS l Dominos Pizza
480
P 469.60
1 Oct
440
400
360
2 Sep 5 Jul 23 Jul 12 Aug 2 Sep 22 Sep
DOMINO’S PIZZA
Following another set of strong results for
Domino’s Pizza, Seymour Pierce is upgrad-
ing forecasts for the full-year. The broker
expects before tax profit for the pizza
group to rise from £36.6m to £37m and
says that if the current trend continues,
Domino’s has the potential to beat this fore-
cast. The broker gives the stock a “buy”.
responsibilities in the meantime.
Only last month Regal parted com-
pany with its financial adviser
Mirabaud Securities after it emerged
it was spearheading an attempt to
oust Greer on behalf of its former
founder.
The company has proved plus prob-
able oil reserves of around 152m bar-
rels of oil, according to an
independent report.
in association with
was director of the pensions group and
corporate finance at Grant Thornton,
responsible for M&A and corporate
covenant reviews.
Rabobank
Matthew Carr has joined the bank as
head of exchange traded funds (ETF)
marketing in its global financial mar-
kets division. Carr has been hired to
develop Rabobank’s ETF platform as
part of its participation in the ETF
Exchange. He previously worked at BNP
Paribas, where he was responsible for
European sales and marketing of the
bank’s ETF product.
+44 (0)20 7557 7245
morganmckinley.com
 Markets&Investment
16 CITYA.M. 1 OCTOBER 2010

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .286.50 +1.00 310.00 246.90 Cookson . . . . . . . . . . . . . . . . . . .547.00 +11.00 616.00 347.60 JPMorgan Emerg Mkts . . . . . . . .580.00 +3.50 588.00 443.00 SABMiller . . . . . . . . . . . . . . . . .2035.50 +9.50 2090.00 1450.00
3i Infrastructure . . . . . . . . . . . . . 113.90 +0.10 115.00 97.00 Croda Intl . . . . . . . . . . . . . . . . .1482.00* +3.00 1529.00 647.00 Jupiter Fnd Mgmt . . . . . . . . . . . .259.50 +2.70 263.00 180.00 Sage . . . . . . . . . . . . . . . . . . . . . .276.30 +0.20 283.90 208.20
A.B. Foods . . . . . . . . . . . . . . . .1049.00 –10.00 1096.00 790.00 Daily Mail ‘A’ . . . . . . . . . . . . . . . .526.00 –2.50 539.00 381.00 Kazakhmys . . . . . . . . . . . . . . . .1452.00* –5.00 1634.00 955.00 Sainsbury(J) . . . . . . . . . . . . . . . .390.70 –4.30 397.00 307.60
Aberdeen Asset Man . . . . . . . . . .160.50 –2.50 164.90 111.00 Dana Petroleum . . . . . . . . . . . .1798.00 — 1817.00 968.50 Kesa Electricals . . . . . . . . . . . . .146.40* –2.00 162.00 98.45 Schroders . . . . . . . . . . . . . . . . .1438.00 +1.00 1459.00 1055.00
Admiral. . . . . . . . . . . . . . . . . . .1666.00 +9.00 1691.00 1003.00 Davis Service . . . . . . . . . . . . . . .401.50* –7.80 442.30 356.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .234.20 +0.30 255.00 196.50 Schroders N/V. . . . . . . . . . . . . . 1166.00 +5.00 1187.00 864.00
Aegis . . . . . . . . . . . . . . . . . . . . .123.50 +0.90 137.30 103.10 De La Rue . . . . . . . . . . . . . . . . . .660.50 –1.00 1021.00 638.00 Ladbrokes . . . . . . . . . . . . . . . . .134.20* –3.30 166.62 114.60
Afren . . . . . . . . . . . . . . . . . . . . . 110.60 +2.00 111.20 76.25 Debenhams . . . . . . . . . . . . . . . . .65.30 –0.95 90.00 51.95 Lamprell . . . . . . . . . . . . . . . . . . .356.40* +10.00 372.30 157.30 Scot. & Sthrn Energy. . . . . . . . . 1118.00 — 1206.00 357.50
African Barr Gold . . . . . . . . . . . .590.00 +4.50 685.00 520.50 Derwent London . . . . . . . . . . . .1504.00* +3.00 1562.00 1174.00 Lancashire Hldgs . . . . . . . . . . . .555.00* –5.00 567.50 416.70 Scottish Mortgage. . . . . . . . . . . .640.00 +5.50 640.50 475.00
Aggreko . . . . . . . . . . . . . . . . . .1570.00* +10.00 1639.00 664.50 Dexion Absolute . . . . . . . . . . . . .140.30 +1.20 148.00 130.00 Land Securities . . . . . . . . . . . . . .640.50* –2.00 743.50 543.00 SEGRO . . . . . . . . . . . . . . . . . . . .273.00* –0.50 389.90 244.00
Alliance Trust . . . . . . . . . . . . . . .330.70 –1.30 352.70 292.80 Diageo . . . . . . . . . . . . . . . . . . .1096.00* — 1176.00 930.50 Legal & General . . . . . . . . . . . . .103.50* –0.40 105.70 69.05 Serco . . . . . . . . . . . . . . . . . . . . .615.00* –3.50 656.50 485.60
AMEC . . . . . . . . . . . . . . . . . . . . .986.00 –4.50 1002.00 724.50 Dimension Data . . . . . . . . . . . . . 119.60 — 125.50 62.00 Lloyds Banking Gp . . . . . . . . . . . .74.12 –0.18 79.15 45.30 Severn Trent . . . . . . . . . . . . . . . 1311.00 –14.00 1404.00 939.50
Amlin . . . . . . . . . . . . . . . . . . . . .401.30* +2.30 437.60 350.80 Dixons Retail . . . . . . . . . . . . . . . .25.71 +0.27 39.75 23.07 Logica . . . . . . . . . . . . . . . . . . . .126.80* +0.60 149.10 100.80 Shaftesbury . . . . . . . . . . . . . . . .432.90 –6.70 456.00 348.00
Anglo American . . . . . . . . . . . .2525.50 –6.00 3015.50 1846.50 Domino’s Pizza . . . . . . . . . . . . . .469.60 –1.70 484.70 278.20 London Stk Exchange . . . . . . . . .681.00 –12.50 949.50 540.50 Shire. . . . . . . . . . . . . . . . . . . . .1434.00* –25.00 1532.00 999.00
Antofagasta . . . . . . . . . . . . . . .1236.00* — 1258.00 699.50 Drax . . . . . . . . . . . . . . . . . . . . . .383.30* +0.30 479.30 321.50 Lonmin . . . . . . . . . . . . . . . . . . .1669.00 +2.00 2198.00 1344.00 Smith & Nephew . . . . . . . . . . . . .580.50 +7.00 700.50 525.50
Aquarius Platinum . . . . . . . . . . .340.60* –3.30 490.00 211.50 Dunelm . . . . . . . . . . . . . . . . . . . .391.70 +11.70 438.40 303.00 Man . . . . . . . . . . . . . . . . . . . . . .219.10 +5.90 373.60 199.60 Smiths . . . . . . . . . . . . . . . . . . .1219.00 +23.00 1253.00 864.50
ARM Holdings . . . . . . . . . . . . . . .392.20* –10.60 419.50 134.40 Easyjet . . . . . . . . . . . . . . . . . . . .369.90 +2.60 499.90 339.80 Marks & Spencer. . . . . . . . . . . . .388.10 +4.20 412.70 321.90 SOCO Intl . . . . . . . . . . . . . . . . . .430.00 –1.90 510.00 380.60
Ashmore . . . . . . . . . . . . . . . . . . .334.60 +0.60 338.40 215.00 Edinburgh Inv Tst . . . . . . . . . . . .417.00 –3.00 436.00 338.00 Meggitt . . . . . . . . . . . . . . . . . . . .296.20* –1.80 331.00 224.90 Spectris . . . . . . . . . . . . . . . . . .1073.00 +22.00 1083.00 653.00
Astrazeneca . . . . . . . . . . . . . . .3233.50 –4.00 3389.50 2668.00 Electrocomponents . . . . . . . . . . .242.80 +5.10 246.30 142.90 Melrose . . . . . . . . . . . . . . . . . . .273.60* +1.70 278.60 160.00
Atkins(Ws) . . . . . . . . . . . . . . . . .736.00 –16.00 801.00 532.50 EnQuest . . . . . . . . . . . . . . . . . . . 115.80 –0.40 125.90 87.35 Mercantile IT . . . . . . . . . . . . . . . .953.00* –4.00 1002.00 822.50 Spirax-Sarco Eng . . . . . . . . . . .1800.00 –23.00 1859.00 1026.00
Autonomy Corp . . . . . . . . . . . .1813.00 +10.00 2012.00 1278.00 Essar Energy . . . . . . . . . . . . . . .462.60 –2.40 475.90 358.50 Michael Page Intl. . . . . . . . . . . . .460.80* +1.90 470.70 314.40 Spirent Comms . . . . . . . . . . . . . .141.90 +2.90 145.10 84.40
Aveva . . . . . . . . . . . . . . . . . . . .1463.00 –3.00 1491.00 856.50 Eurasian Nat Res . . . . . . . . . . . .918.50* +14.50 1276.00 781.00 Micro Focus . . . . . . . . . . . . . . . .381.50 +11.80 550.00 272.20 Sports Direct Intl . . . . . . . . . . . . .141.00 +2.10 143.20 89.85
Aviva . . . . . . . . . . . . . . . . . . . . .398.90* –3.10 474.00 290.20 Euromoney Inst Inv . . . . . . . . . . . 611.00 +5.50 630.00 352.90 Millen & Copthorne . . . . . . . . . . .520.00* –5.00 547.00 321.40 SSL Intl . . . . . . . . . . . . . . . . . . . 1158.00 — 1190.00 616.00
Babcock International . . . . . . . . .570.00 –5.50 660.50 489.00 Experian . . . . . . . . . . . . . . . . . . .693.00 +1.00 698.50 516.50 Misys . . . . . . . . . . . . . . . . . . . . .285.60 –2.00 295.80 192.60 St James’s Place . . . . . . . . . . . . .289.80 –1.20 296.90 203.40
BAE Systems . . . . . . . . . . . . . . .342.30 +0.80 389.90 288.10 Ferrexpo . . . . . . . . . . . . . . . . . . .308.30 +3.80 396.20 138.00 Mitchells & Butlers . . . . . . . . . . .290.50 –3.30 343.90 228.30 Stagecoach. . . . . . . . . . . . . . . . .182.20 –0.90 204.90 137.00
Balfour Beatty . . . . . . . . . . . . . . .267.50 +1.10 304.80 228.60 FirstGroup . . . . . . . . . . . . . . . . .362.80 –5.20 433.00 331.20 MITIE . . . . . . . . . . . . . . . . . . . . .191.20 –0.80 257.00 187.60 Standard Chartered . . . . . . . . . .1826.00* –55.00 1946.00 1366.50
Barclays . . . . . . . . . . . . . . . . . . .299.60 –5.65 394.25 253.40 Foreign & Col Inv Tst. . . . . . . . . .283.70 –0.30 297.20 248.70 Mondi . . . . . . . . . . . . . . . . . . . . .514.50 +0.50 520.50 300.70 Standard Life . . . . . . . . . . . . . . .231.20* –1.20 237.00 170.00
Barratt Development . . . . . . . . . . .98.75 –1.20 178.75 89.10 Fresnillo . . . . . . . . . . . . . . . . . .1242.00 –8.00 1272.00 647.00 Monks Inv Tst . . . . . . . . . . . . . . .322.00 +6.00 324.80 265.00 SuperGrp . . . . . . . . . . . . . . . . .1215.00 +30.00 1312.00 499.00
BBA Aviation . . . . . . . . . . . . . . .188.40* –0.40 220.00 145.90 G4S . . . . . . . . . . . . . . . . . . . . . .254.60* +1.10 285.70 217.70 Morrison Wm . . . . . . . . . . . . . . .295.70* –6.40 307.10 255.00 TalkTalk . . . . . . . . . . . . . . . . . . .146.70 –1.20 150.50 106.60
Bellway. . . . . . . . . . . . . . . . . . . .576.00 –1.00 847.00 510.00 Genesis Emerging Mkts Fd . . . . .507.50 –0.50 512.00 370.00 Murray Intl Tst . . . . . . . . . . . . . . .881.00 +1.00 907.50 720.00 Talvivaara Mining . . . . . . . . . . . .491.80 –0.20 501.50 341.40
Berkeley . . . . . . . . . . . . . . . . . . .826.00 –6.00 949.50 735.00 GKN . . . . . . . . . . . . . . . . . . . . . .169.40* +1.50 172.80 100.40 National Express. . . . . . . . . . . . .242.30 +1.70 258.60 155.86 Tate & Lyle . . . . . . . . . . . . . . . . .466.80 –4.70 509.00 388.00
BG . . . . . . . . . . . . . . . . . . . . . . 1118.50 –15.00 1248.00 966.90 GlaxoSmithKline . . . . . . . . . . . .1254.50* +3.50 1347.00 1088.00 National Grid . . . . . . . . . . . . . . .540.00 –4.00 607.65 474.80
BHP Billiton . . . . . . . . . . . . . . .2025.00* +3.00 2346.00 1583.50 Great Portland Estates . . . . . . . .341.30 –1.00 348.40 236.60 Next . . . . . . . . . . . . . . . . . . . . .2216.00 –11.00 2360.00 1726.00 Taylor Wimpey . . . . . . . . . . . . . . .28.35 –0.37 46.34 24.29
BlackRock Mining . . . . . . . . . . . .625.50 –3.50 654.50 474.00 Greene King . . . . . . . . . . . . . . . .410.80 –4.10 484.00 372.50 Northumbrian Water . . . . . . . . . .332.60 –5.50 353.00 225.20 Telecity . . . . . . . . . . . . . . . . . . . .495.50 –23.00 546.00 311.30
BlueBay . . . . . . . . . . . . . . . . . . .344.90 +0.60 393.00 251.00 Halfords . . . . . . . . . . . . . . . . . . .442.80 –0.90 562.50 343.00 Ocado Grp . . . . . . . . . . . . . . . . .131.10 –2.90 169.00 129.20 Templeton Emrg Mkts . . . . . . . . .619.50 +9.00 625.00 449.00
Bluecrest Allblue GBP . . . . . . . . .169.50 +0.10 170.00 147.00 Halma . . . . . . . . . . . . . . . . . . . . .316.50 +8.50 321.00 215.40 Old Mutual . . . . . . . . . . . . . . . . .138.80 –1.70 142.50 94.75 Tesco . . . . . . . . . . . . . . . . . . . . .424.00 –9.25 454.90 368.40
Booker . . . . . . . . . . . . . . . . . . . . .48.05 +0.05 49.99 37.50 Hammerson . . . . . . . . . . . . . . . .394.30* –0.70 460.30 332.20 Partygaming . . . . . . . . . . . . . . . .275.50 –1.50 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .171.80* –3.40 277.20 167.50
BP . . . . . . . . . . . . . . . . . . . . . . .427.80 +6.80 658.20 296.00 Hargreaves Lansdown . . . . . . . .440.00* –4.70 478.00 259.40 Pearson . . . . . . . . . . . . . . . . . . .985.50 –2.00 1069.00 751.50 Travis Perkins . . . . . . . . . . . . . . .843.50 –2.00 915.00 647.50
Brit Insurance . . . . . . . . . . . . . .1025.00 –3.00 1045.00 709.00 Hays . . . . . . . . . . . . . . . . . . . . . . 113.10 +0.20 119.00 82.50 Pennon . . . . . . . . . . . . . . . . . . . .581.50* –7.00 616.50 440.40 TUI Travel . . . . . . . . . . . . . . . . . .214.40* –3.10 313.90 189.20
British Airways . . . . . . . . . . . . . .242.80 –3.20 255.80 172.40 Henderson . . . . . . . . . . . . . . . . .124.20 –0.80 157.80 112.10 Persimmon . . . . . . . . . . . . . . . . .399.40 –3.10 520.00 335.90 Tullett Prebon . . . . . . . . . . . . . . .397.40 –9.00 436.20 261.20
British Amer. Tob . . . . . . . . . . .2374.50* –6.00 2439.00 1832.00 Heritage Oil. . . . . . . . . . . . . . . . .296.80 –2.20 585.00 296.80 Petrofac . . . . . . . . . . . . . . . . . .1373.00* +6.00 1446.00 900.00 Tullow Oil . . . . . . . . . . . . . . . . .1274.00* –9.00 1375.00 979.50
British Empire Tst . . . . . . . . . . . .465.50 +3.50 469.00 338.50 Hikma Pharma . . . . . . . . . . . . . .688.50* –30.50 813.00 452.20 Petropavlovsk . . . . . . . . . . . . . . 1110.00* –60.00 1370.00 834.00 UK Commercial Prop. . . . . . . . . . .76.50 –1.80 84.90 69.30
British Land . . . . . . . . . . . . . . . .465.00 –6.90 515.00 416.00 Hiscox . . . . . . . . . . . . . . . . . . . .348.80 –4.50 371.60 299.60 Phoenix Group . . . . . . . . . . . . . .685.00* +5.00 775.00 550.50 Ultra Electronics . . . . . . . . . . . .1704.00 –19.00 1774.00 1198.00
Britvic. . . . . . . . . . . . . . . . . . . . .485.20 –0.50 518.00 340.00 Hochschild Mining . . . . . . . . . . .445.00 –3.00 457.50 220.00 Premier Farnell . . . . . . . . . . . . . .266.60* +9.10 272.60 140.60 Unilever . . . . . . . . . . . . . . . . . .1841.00 –3.00 2024.00 1662.00
BSkyB . . . . . . . . . . . . . . . . . . . .705.50 –1.50 732.00 521.00 Home Retail . . . . . . . . . . . . . . . .206.00 –0.60 326.30 204.10 Premier Oil . . . . . . . . . . . . . . . .1654.00 –7.00 1703.00 984.00
BT . . . . . . . . . . . . . . . . . . . . . . .140.00 –1.20 151.00 108.40 Homeserve . . . . . . . . . . . . . . . . .439.50 –30.70 502.00 435.40 Provident Financial . . . . . . . . . . .824.00 –1.00 986.00 795.00 United Utilities . . . . . . . . . . . . . .573.00 +1.00 620.00 429.00
Bunzl . . . . . . . . . . . . . . . . . . . . .759.00 –8.00 784.50 614.00 HSBC Hldgs . . . . . . . . . . . . . . . .645.00* –4.00 766.80 595.20 Prudential . . . . . . . . . . . . . . . . . .636.50 +2.50 665.00 475.70 Utd Business Media . . . . . . . . . .629.50* +10.00 656.50 408.30
Burberry . . . . . . . . . . . . . . . . . .1040.00 +20.00 1065.00 492.10 Hunting . . . . . . . . . . . . . . . . . . .621.50 –0.50 659.50 429.10 PZ Cussons . . . . . . . . . . . . . . . .367.00* –6.00 382.70 231.70 Vedanta Resources . . . . . . . . . .2165.00 — 2967.00 1795.00
Cable & Wire Comms . . . . . . . . . .56.75 –1.95 150.00 53.00 ICAP . . . . . . . . . . . . . . . . . . . . . .431.50 –6.30 478.30 291.70 Qinetiq . . . . . . . . . . . . . . . . . . . .107.80 –0.80 179.10 103.50 Victrex . . . . . . . . . . . . . . . . . . .1276.00 +3.00 1329.00 726.50
Cable & Wire Wwide . . . . . . . . . . .73.55 –1.05 94.80 60.05 IG . . . . . . . . . . . . . . . . . . . . . . . .497.20* –11.80 532.00 291.00 Randgold Resources. . . . . . . . .6370.00 –115.00 6620.00 3930.00 Vodafone . . . . . . . . . . . . . . . . . .157.10 –1.40 164.95 126.50
Cairn Energy. . . . . . . . . . . . . . . .453.60 –4.50 497.60 306.80 Imagination Tech Gp . . . . . . . . . .381.40 –2.50 399.00 154.00 Reckitt Benckiser . . . . . . . . . . .3501.00* +32.00 3667.00 2971.00 Weir . . . . . . . . . . . . . . . . . . . . .1423.00 –6.00 1459.00 635.00
Caledonia Invs . . . . . . . . . . . . .1627.00 — 1759.00 1496.00 IMI . . . . . . . . . . . . . . . . . . . . . . .767.50* –5.50 786.00 410.00 Reed Elsevier . . . . . . . . . . . . . . .538.00 +3.50 566.00 454.60 Wellstream Hldgs . . . . . . . . . . . .765.00* +9.00 810.00 429.70
Capita . . . . . . . . . . . . . . . . . . . . .786.00* +1.50 829.50 693.00 Imperial Tobacco. . . . . . . . . . . .1897.00 +15.00 2159.00 1728.00 Regus . . . . . . . . . . . . . . . . . . . . . .80.00* –3.50 125.50 64.05 WH Smith . . . . . . . . . . . . . . . . . .453.20 +5.10 551.00 392.20
Capital & Counties . . . . . . . . . . .131.20 –2.60 137.50 99.60 Inchcape. . . . . . . . . . . . . . . . . . . 311.80 +0.20 347.00 235.00 Renishaw . . . . . . . . . . . . . . . . .1031.00* –1.00 1048.00 479.00 Whitbread . . . . . . . . . . . . . . . . .1624.00 –8.00 1653.00 1141.00
Capital Shopping Centres . . . . . .367.70 –4.50 533.50 300.10 Informa . . . . . . . . . . . . . . . . . . . .418.90 –7.00 439.40 263.30 Rentokil Initial . . . . . . . . . . . . . . .103.00 –0.50 140.20 91.15 William Hill . . . . . . . . . . . . . . . . .166.00 –4.00 217.80 160.50
Carillion . . . . . . . . . . . . . . . . . . .313.50* –5.40 361.90 267.60 Inmarsat . . . . . . . . . . . . . . . . . . .663.50* –5.50 831.00 526.00 Resolution . . . . . . . . . . . . . . . . .245.00* –2.40 264.80 220.10 Witan Inv Tst . . . . . . . . . . . . . . . .465.00 +1.80 487.00 396.30
Carnival . . . . . . . . . . . . . . . . . .2502.00 –39.00 2937.00 1876.00 Intercontl Hotels . . . . . . . . . . . . 1136.00* –14.00 1244.00 762.50 Rexam . . . . . . . . . . . . . . . . . . . .307.00* –1.00 348.80 258.20
Catlin . . . . . . . . . . . . . . . . . . . . .340.50 +0.20 394.60 303.20 Intermediate Capital . . . . . . . . . .299.00 –0.10 308.30 233.50 Rightmove . . . . . . . . . . . . . . . . .733.50 –6.50 796.50 456.90 Wolseley . . . . . . . . . . . . . . . . . .1599.00 +8.00 1742.00 1155.00
Centamin Egypt . . . . . . . . . . . . .177.00 –1.40 194.40 92.00 Intertek . . . . . . . . . . . . . . . . . . .1830.00 –6.00 1863.00 1136.00 Rio Tinto . . . . . . . . . . . . . . . . . .3721.00 –41.00 4104.00 2435.00 Wood Group (John). . . . . . . . . . .436.60 +9.00 443.50 279.60
Centrica . . . . . . . . . . . . . . . . . . .323.50* –0.80 347.00 236.30 Intl Personal Fin . . . . . . . . . . . . .269.80* –5.90 283.00 159.20 RIT Capital Partners . . . . . . . . . 1110.00 –3.00 1215.00 940.00 WPP . . . . . . . . . . . . . . . . . . . . . .704.50 –3.50 744.00 520.50
Charter Intl . . . . . . . . . . . . . . . . .694.00 +4.00 855.50 563.50 Intl Power . . . . . . . . . . . . . . . . . .388.00* +2.80 396.80 248.20 Rolls Royce . . . . . . . . . . . . . . . .603.50 –8.50 631.50 434.50 Xstrata . . . . . . . . . . . . . . . . . . .1218.00* –24.00 1344.50 815.00
Chemring . . . . . . . . . . . . . . . . .3006.00 +7.00 3711.00 2389.00 Invensys . . . . . . . . . . . . . . . . . . .298.50 –0.40 350.30 224.90 Rotork . . . . . . . . . . . . . . . . . . .1720.00 +1.00 1740.00 1101.00 LONDON TOP 250 BY MARKET CAPITALISATION
Close Bros . . . . . . . . . . . . . . . . .737.50 –4.50 804.00 657.00 Investec . . . . . . . . . . . . . . . . . . .508.50 –1.00 565.00 411.50 Royal Bank Of Scot . . . . . . . . . . . .47.21 –0.68 58.95 28.25
Cobham . . . . . . . . . . . . . . . . . . .231.00 +0.90 278.60 205.50 ITV . . . . . . . . . . . . . . . . . . . . . . . .59.65 +0.40 71.75 41.04 Royal Dutch Shell A . . . . . . . . .1916.00 +5.50 2068.50 1621.00 * Ex-Dividend † Suspended
COLT Group . . . . . . . . . . . . . . . . 118.30 –2.30 144.20 107.70 Jardine Lloyd Thompson. . . . . . .577.50* –1.50 604.50 420.70 Royal Dutch Shell B . . . . . . . . .1857.00 +10.50 1997.50 1550.00
Compass . . . . . . . . . . . . . . . . . .530.50 –21.00 574.50 372.40 Johnson Matthey . . . . . . . . . . .1762.00 –16.00 1814.00 1302.00 RSA Insurance . . . . . . . . . . . . . .130.70* +0.50 142.00 114.10 www.interactivedata.com

FTSE falls on weaker banks, Wall St slips, but

despite advance made by BP logs strong quarter
index, extending Wednesday’s sharp “The Spanish downgrade, although trading range and reach the highs
THELONDON losses.
Ireland’s central bank has put a
expected, together with the concerns
over the banking situation in Ireland THENEW YORK that we saw in April,” said John
Canally, an economist and invest-

REPORT €34bn (£29.4bn) price on bailing out

Anglo Irish Bank under a worst-case
scenario and said Allied Irish Banks
means investors remain wary,” Mic
Mills, head of electronic dealing at
ETX Capital, said.
REPORT ment strategist at LPL Financial in
Boston.
A Reuters poll showed leading
needs to raise an additional €3bn by Compass Group fell 3.8 per cent world investors increased equity hold-

B W
RITAIN’S FTSE 100 closed lower the end of the year. after a “disappointing” in-line trading ALL Street wrapped up its ings to their highest level in three
yesterday as weaker banks out- Barclays fell 1.9 per cent while statement, said trader Ben Critchley best quarter in a year yester- months in September and reduced
weighed gains from energy HSBC lost 0.6 per cent. at IG Index, although brokers remain day with the S&P and bonds and cash as confidence about
stocks on stronger crude prices But elsewhere among financials generally positive about the catering Nasdaq logging in the the global economy grew. The Dow
and comments suggesting BP could Man Group was the top gainer, up 2.8 group’s longer-term outlook. biggest monthly gains since April Jones industrial average slipped 47.23
resume paying a dividend in 2011. per cent, buoyed by a supportive note On the upside, Burberry climbed 2009, as data showed the economy points, or 0.44 per cent, to 10,788.05.
The FTSE 100 closed 20.65 points, from UBS which reiterated its “buy” two per cent after Bernstein issued a isn’t in such bad shape. The Standard & Poor’s 500 Index
or 0.4 per cent lower at 5,548.62. It stance on the stock. broadly positive note on the luxury Defying September’s track record declined 3.53 points, or 0.31 per cent,
gained 6.2 per cent in September and BP gained 1.6 per cent as the oil goods sector. as the worst month for stocks, the to 1,141.20. The Nasdaq Composite
12.8 per cent in the third quarter. major’s chief executive Bob Dudley Upbeat broker sentiment also S&P 500 was up 8.8 per cent. In the Index fell 7.94 points, or 0.33 per cent,
Sharp falls in US weekly claims for told the BBC that the company want- helped defence and electronics firm third quarter, the index gained 10.7 to 2,368.62.
jobless benefits and early signs of ed to resume paying a dividend in Smiths Group, up 1.9 per cent, with per cent, which was the best in a year. After the bell, Hewlett-Packard
strength in September business activ- 2011. Morgan Stanley hiking its target price The session was volatile, split shares fell 3 percent to $40.65 after
ity helped to lift stocks in afternoon BP and other energy firms like for the technology group following between investors positioning for the the company named Leo Apotheker
trade, but uncertainty over the out- Royal Dutch Shell, up 0.3 per cent, full-year results on Wednesday. end of the quarter and those buying as its new chief executive, tapping a
look for banks and the wider econo- were also supported as oil prices rose on encouraging data. After up and software industry veteran to lead the
my saw it retreat just before trading around $1 to near $79 per barrel. ANALYSIS l FTSE 5,548.62 down moves of nearly one per cent, world’s largest technology company.
5,800 30Sep
closed. But overall investors were cautious equities ended slightly lower. Semiconductor companies, a
“There’s optimism out there and and a wide range of shares were weak- Still, the S&P 500 seemed to be growth sector that advanced during
investors are happy to see modest er. Supermarket Tesco and miner struggling to break above the 1,145- the quarter, ranked among the day’s
improvement but we are going to see Xstrata were both down around two 5,400 1,150 trading range. losers and weighed on the Nasdaq.
insipid reaction to positive data,” per cent. “Since September was such a The Philadelphia semiconductor
David Buik, senior partner at BGC Moody’s Investor Service cut strong month, many think October index fell 0.7 per cent. In the options
Partners, said. Spain’s credit ratings to Aa1 from 5,000 will be the scary one. If [future] data market, bearish activity was detected
Trade was also volatile as investors AAA, with a stable outlook, saying it and earnings confirm that we are in Micron Technology about a week
adjusted positions at the end of the sees weak economic growth finally out of fears of a double-dip before its quarterly results, and in
quarter. prospects for the Eurozone’s fourth- 4,600 [recession], October may be the Dell, as some investors appear to be
Banks took most points off the biggest economy. 5 Jul 23 Jul 12 Aug 2 Sep 22 Sep month for the S&P to break above taking defensive positions.
CITYA.M. 1 OCTOBER 2010
If fear of HMRC
gets you down,
cut a deal now
An amnesty offers a chance to bring your
untaxed funds onshore, writes Juliet Samuel
T
HE Revenue net is closing in,” warns
DLA Piper partner Simon Airey.
“They’re creating a little bit of fear,
which is what the HMRC like to do.”
Sensing a public mood that is increasing-
ly hostile to those who don’t pay UK taxes,
treasury secretary Danny Alexander recent-
ly earmarked £900m for investigations into
offshore tax evasion. But the stick is not
without a carrot: tax evaders are also being
given what is supposedly one last chance to
bring their money into the UK with a mini-
mal penalty.
The amnesty is aimed at saving the rev-
enue service millions of pounds in money
spent investigating and prosecuting tax
fraud. It means that, for a limited time
only, tax evaders can bring their cash
onshore for only a 10 per cent penalty –
plus interest and the 40 per cent tax owed.
This is dramatically less the maximum
potential penalty an evader pays if caught
(see table below), which is due to rise to 200
per cent of the tax owed on funds in April
2012.
In addition, evaders are promised immu-
nity from prosecution, they get to avoid
being “named and shamed” in British
newspapers and HMRC will only dig up
information about their tax affairs during
the last 10 years, as opposed to the standard
20-year “look-back” period. So if you evaded
tax before April 1999, it would be consid-
ered water under the bridge. The deal is
SUMS ADDING
UP FOR THE
2009 LAFITE
GARY BOOM
MD & FOUNDER OF FINE WINE
MERCHANT BORDEAUX INDEX
B
ACK in late June, our analysts pre-
sented me with their prognosis for
2009 Bordeaux. The en primeur cam-
paign at the time had already become
the largest in history and despite high initial
releases, prices were still going up extremely
fast in the secondary market. Activity, how-
ever, was still ferocious so we had to make a
decision regarding our position.
We had looked at a raft of previous vin-
WHAT
WHAT
WH AT TO
TO K
KEE
KEEP.
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WHAT
WH
W HAT
AT TO
TO K
KEE
KEEP
EE
EPP
DRINKING
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DRINK
KING
ING
Investment | Personal Finance 17
known as the Liechtenstein Disclosure
Facility (LDF) and stems from a lucrative
agreement signed between the UK and
Liechtenstein governments.
Ashley Crossley, partner at Baker
MacKenzie, which advised the principality Liechtenstein: no longer such
of Liechtenstein on the treaty, says that a safe haven for tax evaders
with the Organisation for Economic Picture: ROBERT HARDING
Cooperation and Development (OECD) pil-
ing the pressure onto tax havens,
Liechtenstein pre-empted the changes by (numbers for the most recent six months EXAMPLE CASE | PROSECUTION VS AMNESTY PENALTY
approaching the UK to make a deal. have yet to be released, but are apparently
In order to compensate Liechtenstein for more than double this figure). Airey thinks Source: DLA Piper HMRC Enquiry (£) LDF Amnesty (£)
agreeing to make its banks audit all their this is because HMRC has not yet sufficient-
accounts, those moving onshore have to ly publicised the scheme. Tax period 1 June ‘90 - 5 April ‘09 6 April ‘99 - 5 April ‘09
establish a “meaningful relationship” with But even if the number of people coming Date of deposit 1 June ‘90 1 June ‘90
the principality in order to qualify for the onshore might not be huge, the tax take Original deposit from
deal. What that means exactly has yet to be will probably be substantial. Airey says that undeclared income 10m 10m
established, but DLA Piper’s Airey imagines among those his firm advises, the average
that it means the transfer of a six-figure amount is around £1m-£2m, and he has
Balance today 20m 20m
sum (or equivalent investment) into a heard of cases where the HMRC has bagged Tax on the initial
Liechtenstein bank account. Once £20m from one individual. This compares deposit at 40% 4m –
Liechtenstein has accepted your connec- to the revenue service’s last attempt to Tax on accrued
tion, a special HMRC hotline is ready for crack down two years ago, which involved
your mea culpa. scouring the accounts of 400,000 people
interest at 40%* 4m 2m
But why should the treasury offer such a (obtained via legal threats to UK banks) and Estimated interest on
discount to people who have been evading gaining just £400m – £1,000 per person. late payment of tax** 6m 1.2m
taxes for years? Crossley says: “It’s a way of The LDF offer is open until 2015 – but Penalty*** e.g. rate: 40% 3.2m 10% 0.2m
encouraging evading taxpayers to come there is a catch. If HMRC gets on your case
out of the cold.” And it saves the HMRC mil- before you sign up, it’s game over. So if
Total payable to HMRC 17.2m 3.4m
lions in investigation costs. those offshore funds have been burning a * Total interest is £10m, but only tax due since 1999 is taken under LDF.
Despite the combination of threats and hole in your pocket, now is a good time for
low penalties, only 419 people registered an impromptu donation to Her Majesty’s ** Interest arises from original tax due date and varies.
for the LDF during its first six months coffers. *** Maximum penalty is 100 per cent, rising to 200 per cent April 2011.
tage data and mapped price curves for all
the great vintages for several years after
release.
cent to Lafite over time. Given that at
release, the two chateaux tend to price
around the same level this implies a value
short term.
What about the Lafite 2009? Well 2009
Lafite is already cheaper than Latour (cur-
Across a representative selection of top
wines, one of the observations was that in
the longer term, the 2009 vintage was like-
discrepancy that should be exploitable.
PRICE TARGETS
rent offer £12,500), very much against a
well established trade history. In addition,
Lafite 2009 is substantially outside the pre-
ly to trade at a discount of around 20 per
cent to the 2000 vintage.
Looking back, with those same 2009
Using our current offer prices, we can work
out three separate price targets for the two
wines. Let’s start with Latour 2009 (current
dicted discount to the 2000.
Indeed at the 80 per cent number we
discussed earlier, the price target for the
wines already at 12 per cent less than June price £12,500): 2009 Lafite would be up at £15,200. More
prices, this was a pretty good call. More
interestingly though, a full quarter of trad-
l 80 per cent of the 2000 Latour gives a
predicted price of £8,400.
conservatively, using the mean of the three
target prices for Latour 2009, our chateaux
ing since has allowed us to further extrapo- l 65 per cent of the 2009 Lafite gives a relationship gives the figure of £13,540.
late and refine the picture a bit. Let’s have a predicted price of £8,125.
look: This looks pretty bearish for Latour, right? BEST VALUE
Hang on. So what does this tell us? Well for one,
IMPORTANT PAIRINGS Applying the same relationship for the we’re happy we did that work back in June.
For several years, it’s been obvious that the pair of 2000 vintages, the normal 65 per More importantly, we’ve got a nice trade
market has assigned premiums to certain cent doesn’t hold. Indeed our implied value call for today. Latour 2000 – we like it, its
chateaux, the values for which are both for Latour 2000, based on the 65 per cent younger brother, the 2009, much less so.
measurable and relatively stable. prediction is actually all the way up at Lafite 2009? Whichever way we look at
Taking one of the more obvious and £12,350. Plugging that into our vintage it, we like it and after all the craziness of the
important pairings (that of chateaux Lafite comparison for 2009 gives us Latour 2009 2009 campaign, it’s a touch ironic that its
and Latour), we can see that top vintages of at £9,880. Still pretty uncomfortable read- most-hyped wine conversely appears one of
Latour trade at a discount of around 35 per ing, no doubt, but somewhat more realistic the best value.
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 City Focus
18
Designing the family business
Daniel Taylor tells Donata Huggins
how he quit his corporate job and
built a company to fit his lifestyle
D
ANIEL Taylor used to have a corpo-
rate job. In fact, he was the
European managing director of a
BTR subsidiary for 10 years. “I
worked a lot. I missed out on the early
years of my first two children.” Taylor says
this as he sits in a large executive chair,
looking relaxed and cheerful.
Taylor still is a managing director– only
now he runs his own company. Taylor
quit his job and set up Metro Design
Consultants in 1997 when BTR was sold
off. Metro Design is one of the UK’s
leading design-and-build companies, refit-
ting the offices of clients such as Harley
Davidson, Unite and the Conservative
party. The company has grown from
Taylor’s spare room to a multi-million
pound business employing 40 staff.
Taylor explains that quitting his corpo-
rate life was not too difficult: “I promised
my wife I would take it easy. I’d get out of
the rat race and start up my own busi-
ness.” While some entrepreneurs have to
struggle against their family to take the
plunge, Taylor’s was keen for him to quit
and build a new life around them.
Nowadays, Taylor has dinner with his fam-
ily every night.
Taylor says Metro operates “like a good,
old-fashioned firm, we encourage our chil-
dren to come into the business.” His wife
is a director in the firm, he credits her net-
working skills for some of their best deals.
He jokes: “If we were chatting at a party,
my wife would be chatting to your
boyfriend and we would all be having din-
Private sector loans
support solid SMEs
Small businesses do not need the government
to provide their lending, says Donata Huggins
I
n a speech on Wednesday,
prominent backbench Conservative
MP David Davis said that Britain
must do more to help small and
medium size businesses through the
recession, but stressed that this did not
mean forcing the banks to lend. Instead
he argued that businesses themselves
would be the source of the recovery.
The government has been heavily criti-
cised by some for not making more credit
available to businesses. The chancellor has
said the government “would not tolerate
banks piling the pressure” onto small
firms, and that it was their “obligation” to
lift lending.
Angela Knight of the British Bankers’
Association argues that this is not the
banks’ fault: “You can’t make a business
proposition that is not working in the
recession work by giving it money” and
that there are fewer viable applications
being submitted.
But what does this mean for start-ups,
small firms and entrepreneurs? Are credit-
worthy businesses being starved of credit,
and if so, why is nobody seizing the oppor-
tunity?
| Entrepreneur
From burger-flipper
to high-flyer
Picture:
Micha Theiner
/City A.M.
ner together next week.”
Few would have predicted that Taylor
would become such a slick operator. He
says the community he grew up in offered
him only two role models: a basketball
player or a criminal.
Taylor says that his formative years in
Jamaica shaped him. “It taught me to
appreciate what I have, telephones -- even
electricity at times -- was a luxury.”
Hard work is important to Taylor: “I
focused on my education because there
was nothing else to do.” His studies took
him to London’s Royal College of Art. He
studied product design, flipping burgers
in McDonald’s to fund his course.
Taylor has a no nonsense commercial
perspective. He complains about people
from his university days: “The trouble
with most art students is they are precious
about their designs, they don’t realise that
they need to sell their products.”
It turns out that Davis is right about
trusting the private sector: entrepreneurs
are stepping into the breach. Even as the
government prepares to cut funding to
the Business Link advisory service later
this year, enterprising companies have set
up banks and are offering their services to
small businesses with sound business
models.
Two good recent examples of this are
the British Enterprise Bank (BEB) and
Trafalgar Capital Advisors. Last week,
plans for the BEB were launched by a
team of senior bankers and hedge fund
managers. They have set themselves the
task of raising £100m to lend to small
businesses. They are in the final stages of
obtaining a banking license and hope to
open their doors early next year.
Trafalgar Capital Advisors have been
offering finance to small, listed
companies that are struggling to borrow
from banks and are too small to access
bond markets. Trafalgar provides busi-
nesses with finance in the critical $1-5m
range which is too small for most brokers
and other funds. Its relationship-led
approach also offers an advice service.
In association with CITYA.M. 1 OCTOBER 2010
IP PROTECTION
Q&A
Q.
What do I need to
know about intellectual
property?
A.
Intellectual property rights are
determined by a tangled ball of vary-
ing categories of legislation that
requires patience to unpick. The categories
are wide, overlapping and vague. Certain
components entitle you to rights over your
property while others require you to take
prior action to ensure that you are protected.
The very first thing to point out is that the
owner of intellectual property is usually the
creator of the work unless the property was
created whilst in a contract of employment.
The property is then usually owned by the
employer. Regardless of this convention, it is
very important for intellectual property own-
ership to be clarified in contracts with your
employees. This is particularly important
when you are using a contractor or consult-
ant since the legal lines of ownership are
blurred.
Q.
What can I do to protect my
intellectual property?
This enterprising streak has stuck with
him and he looks for it in his staff: “I hire
A.
for attitude not for skills.” He wants to You can protect a wide range of your
them to be shaped by the company and works using copyright. To qualify the
the company to shape them. The sales work must be your own. To protect
team, for example, all have a patch of yourself it must be written down or recorded
London to patrol to seek out new business. in some way. To make sure you can prove this it
What does Taylor tell his children over is a good idea to send the item to yourself by
dinner? Never be afraid to flip burgers and registered post or lodge a copy of it with your
always be working on your CV. solicitor. This can help you prove the date on
which you “owned” your idea.
CV | DANIEL TAYLOR If you have invented something you can
prevent anyone making, selling or importing
Studied: Royal College of Art Reading: Tony Blair’s “My your idea for 20 years with a patent.
However, patents require a lot of research, a
Lives: London with his wife and Journey” hefty application fee (£2000) and two to
children Fact: On JP Morgan Top 100 three years to gain approval.
Car you drive: BMW XS Powerlist, which lists the UK’s You should also protect your design work.
This does not just mean decorative or artistic
First ambition: Pilot top 100 Afro-Caribbean busi- work but also functional designs such as
Idol: Martin Luther King ness people machinery. If you can prove that your design
is yours you can stop – and get compensa-
tion from – someone else using your design.
While you are entitled to this right, you are
more likely to be able to successfully prove
that you own your design if you register it
with the Intellectual Property Office.
You can protect a company’s “trade
secrets”. This is information which is yours,
secret and of value to your business.
Businesses that rely on customer lists, manu-
facturing techniques or business methods
can make a case for protection under this
aspect of the law. Again, guard against the
vagaries of this law by specifying it as
expressly confidential in a non-disclosure
agreement in contracts with your employees.
Jennifer Holroyd, consultant solicitor at
Keystone Law says: “Some people are quite
sceptical of the effectiveness of a non-disclo-
sure agreement, but they are always worth
having.”
Finally, a trademark can protect your
brand. It is not enough to simply have an
internet domain name or list your company
at Companies House. Trademarks must be
registered with the Intellectual Property
Office for a fixed fee. Further information
can be found on www.ipo.gov.uk
Q.
Where can I learn more?
A.
The British Library IP Business Centre
offers regular free workshops, online
courses and one-to-one advice on intel-
lectual property. The
library also has
databases to
search
patents,
Easy money got us While the pundits bicker, trademarks,
into this mess in entrepreneurs have noticed a gap in the copyright,
the first place market and set to work. Those considering and regis-
starting a business should bear in mind tered designs
Picture: ALAMY that a sound proposition and a good busi- from around
ness plan are still the key to unlocking the world.
lending.
 Living
20
A penthouse in the other Wharf
Great river views
make this Property
of the Month, says
Timothy Barber
W
ITH its network of cobbled
alleys running between
ancient riverside warehouses,
still bridged-over by those icon-
ic iron gantries, Shad Thames has been
one of the most atmospheric places to
live near the City since its redevelop-
ment in the 1980s. Its attractions are
manifold: a thriving café culture, thanks
in part to the investment in the area
made by restaurateur and design guru
Terence Conran; easy access to London
Bridge and Southbank; a short walk – or
shorter by Boris Bike – to the Square
Mile; and if you can bag a river-facing
property, magnificent views of the
Thames’s most famous landmark, Tower
Bridge.
Whoever buys this particular river-fac-
ing property will be able to enjoy those
views from two huge roof terraces – in
fact, riverside London properties really
don’t come much more spectacular than
The crunch has made
foreign dream homes
far more affordable
Find out how to make the most of new
European opportunities, says Donata Huggins
T
OUGH economic times have opened
the door for a new generation of
property investment. Tumbling
prices in both the UK and abroad
have actually made this investment option
more accessible than it was prior to the
credit crunch. Nick Clark, managing direc-
tor of the Property Investment Show, says:
“House prices in England and Wales suf-
fered their most widespread falls in
August since May 2009, but this is not nec-
essarily bad news for savvy property
investors. In a low – and slow – market,
investors know that there are opportuni-
ties to be found.”
This is also true of international proper-
ties. Rightmove and Moneycorp have
found that property in parts of Barbados,
Spain and Florida can now offer discounts
of 40 per cent on holiday homes.
Prices in France have also fallen 20 per
cent. The typical property is now only
£143,320. Even higher-end properties have
experienced this drop. In Bordeaux, for
example, a town house can go for between
€500,000 and €1m.
The bargains get more appealing if you
are willing to go a little off the beaten
track. For example, there is a stone village
house in Aveyron with 5,000 metres of
forested land going up for auction at the
Property Investment Show on 15 October
with a guide price of £45,000. This deal is
made sweeter by the fact that an auction
| Property
this. The four-bedroom apartment sits on
the eighth and ninth floors of Butler’s
Wharf, the largest and most famous of
the old Shad Thames warehouses. The
interiors are smartly modern and mini-
malist. But with floor-to-ceiling windows
filled with that awesome panorama, you
don’t need much other decoration. But
will usually offer you a price 10 to 20 per
cent below the market value.
International mortgages are not too
tricky either. Investors can still borrow up
to 100 per cent of the property value and
athenamortgages.com can offer a 15-year
fixed rate of 3.45 per cent a year with no
redemption penalties if you pay off the
loan after the first five years.
Using a Self Invested Personal Plan is
another financing option. Charlie King of
the Resort Group, says: “There is no doubt
that the overseas market now offers some
highly attractive Self Invested Personal
Plan compliant schemes. With widespread
disillusionment in UK pension funds it is
not surprising investors are looking to
take their retirement wealth creation into
their own hands and see overseas property
as the route to achieving significant
gains.”
The downturn has far from destroyed
the opportunities for property investment.
In fact, falling prices, accessible mortgages
and disillusionment with pension funds
as a long-term investment could offer the
possibility for a new generation of first-
time international property buyers.
To find out more visit
www.propertyinvestor.co.uk/london. Register
before 8 Oct for free entry. Show runs 14-16 Oct
2010, at London ExCel, 3 Western Gateway, E16
The show is aimed at everyone from property
industry professionals to first-time buyers.
it’s luxurious nevertheless, and includes The flat has a
three underground parking spaces, 24- modern, spacious
hour concierge and a bathroom for each interior.
of the bedrooms. Spacious, well-appoint-
ed and well-connected – a pretty useful
combination.
Contact Chesterton Humberts: 020 7357
7999, www.chestertonhumberts.com.
LEARN MORE | FOREIGN INVESTMENT
The Property Investor Show & OPP Live
Highlights include:
l Luxury real estate
l Lodge and holiday home investment
l Advice and properties offered in Egypt
l An alternative investments showcase
l Landlord forum - the UK's largest annual gathering of landlords
l An Auction Zone on Friday15 October 2010. This includes a “Live
Auction” of over 200 property lots.
l The Association of International Property Professionals (AIPP)
Zone
l SIPP Zone
CITYA.M. 1 OCTOBER 2010
INTERIORS
Q&A
Andrew Dunning
HEAD DESIGNER
AT APD INTERIORS
Dear Andrew, with winter
Q. approaching I would like to
entertain more at home but I
need to make my dining room more wel-
coming. How can I do this?
A.
Dedicated dining rooms have gone out
of fashion in favour of open-plan living
arrangements, however with more
people entertaining at home, the desire for
dedicated dining spaces has grown.
If you have the luxury of a separate space
you can use a rich bold colour, which will look
good if well-lit. A rich red paint or a bold wall-
paper can add to the sense of drama and
colours from the hot palette stimulate the
appetite so they are great choices. If the din-
ing area is part of a larger open-plan space,
then the decoration ie, a different colour on
the walls can help define the area. With tiled
or wooden flooring, consider using a rug under
the table to create definition, but make it large
enough to pull out chairs.
Lighting plays a major part in setting the
correct mood – a feature pendant over the
table can add a dramatic touch and create a
pool of lighting onto the table. Remember to
make sure the lighting for the dining room can
be dimmed; this can be supplemented with
candle light in the evening.
Round tables are more sociable and suitable
if you expect to entertain up to 6 people. An
extendable table is a great option if you want
to entertain large numbers but generally
require a small table day to day. Chairs not
only need to look good but they need to be
comfortable. Before you purchase any chair,
sit in it for at least 10 minutes. Upholstered
chairs will soften the look and a bold fabric will
add colour. If you have a young family or are
worried about spillages, ensure that any fabric
can be easily cleaned.
If possible include some practical storage
near your dining area for crockery, cutlery,
glasses and table linen – sideboards are very
on trend at the moment.
Q.
Dear Andrew, I’m about to install a
new solid floor and have heard how
good under-floor heating is – do you
recommend it and how do I install it?
A.
Under-floor heating is a great choice
to provide heating in both a specific
area and throughout the whole house.
Although it is relatively unknown here, it is
widely used in Europe and Scandinavia. I have
a water-based under-floor heating system in
my own home so I can highly recommend it. It
is a common misconception that it is expensive
to install and run. The combined costs are
comparable to traditional radiator heating.
Under-floor heating means there are no
restrictions on where you can place your furni-
ture and you get a more even heat.
You can either have an electric or a water-
based system. The electric is easily installed
and suitable if you want a small installation.
The water-based system involves laying pipes
and enclosing them in a screed so it is more
suited to larger renovations.
With under-floor heating, the heat will be
ambient throughout the room and it will sud-
denly make a tiled floor more attractive in the
winter and it takes just a small trickle of heat
to take off the chill. Remember that under-
floor heating won’t provide instant warmth so
try not to switch it on and off. It is best if you
can maintain a constant heat.
Most floor finishes will be suitable but
check that any wooden floor you intend to use
is suitable for under-floor heating.
Andrew Dunning is head designer at APD
Interiors, an interior design consultancy,
www.apdinteriors.com. Follow his design tips
on Twitter: @andrewdunning
 "/7,/.$/.%
Luxury Canal Side Living
WWWAQUAVISTACOUK

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 Lifestyle
22 CITYA.M. 1 OCTOBER 2010

| Reviews

The stockbroker who changed art

The autumn blockbuster at
Tate Modern is a revealing look
at the work of a true master

Art Exhibitions
GAUGUIN
Tate Modern
Left: Tehaamana Has Many Parents  (1893); above: Nevermore O
by Timothy Barber hhhhI Tahiti  (1897), both Gauguin. Below: Ryan Reynolds is trapped in Buried.

WERE Paul Gauguin alive today, he’d have

made a good subject for one of those
“escape the rat race” reality soaps. A
Parisian stockbroker who dumped his
career (along with his wife and children)
to pursue his passion for art, he eventually
abandoned the Western world itself, tak-
ing himself off to the islands of the Pacific
to live a dissolute existence – taking many
of the young islander girls who ended up
on his canvasses as his lovers – on the
other side of the planet.
Tate Modern’s autumn blockbuster is the
first British survey of his work in over half a
century, and it’s a colossal show. There are
hundreds of works, including woodcuts,
drawings and sculptures as well as paint-
ings (plus two rooms of historical archival
materials) and it’s endlessly fascinating
stuff. So stylised and recognisable are
Gauguin’s works – the vibrant colours, the
simplified forms, the cowled Bretton girls,
the exotic Oceanic nudes – it can be easy
just to marvel at their unusual beauty and
miss the mystery and intellectual explo- Budapest’s Museum of Fine Arts, plus a fauvism and futurism, plus a blue period
ration behind them. Bringing so many of few more from the Hungarian National Picasso for good measure.
them together, one sees the variety and Gallery, in an exhibition put together Everyone will find his or her own treas- sity by the diversely-talented Ryan
rigour of his ideas, the constant searching quickly (but very nicely) after a previously ures in this happy mish-mash, which has Reynolds (no, he’s not just the heart-throb
and excavation of narrative themes, sym- planned show fell through. That means been beautifully hung. It’s certainly a less husband of Scarlet Johansson) – is a truck
bolist tropes and dark emotions. you get everything from 15th century wearying tour through the history of driver working in Iraq who, following an
I’m not sure the curators’ rearranging Italian religious works to Egon Schiele Western art than the National Gallery, armed attack on his convoy, wakes up to
of the work into themes with titles like eroticism, stopping off at Leonardo, and the perfect exhibition to bring chil- find himself entombed. As he fights the
“making the familiar strange” and “the Raphael, El Greco, Ribera, Rembrandt, dren interested in art. Two riveting rooms urge to panic, he spends the limited
eternal feminine” is that helpful – is a Hals, Goya, Monet and many others – of master drawings are alone worth breathing time he reckons he has left
chronological retrospective so unfashion- including some excellent Hungarian return visits. making phone calls to his would-be res-
able now? There’s also much too much artists – along the way. cuers, his family and his kidnappers, who
here to take in in one visit. But that’s only It’s an exhibition one can dabble in want $5m in return for his release.
because this is such a rich, comprehensive
look at arguably the most influential
rather than take in everything, and con-
centrate on works that happen to stand
Films Horrifically absorbing, Buried is like liv-
ing in a nightmare for 94 minutes. Director
artist of his era. out. Not the least of those, for me, was the BURIED Rodrigo Cortés’s bold decision to focus sole-
astonishing Hungarian altarpiece from Cert 15 ly on the interior of Paul’s box is a brilliant
1512 that greets you upon entering, a one: we find ourselves trapped with him,
TREASURES OF BUDAPEST darkly mystical mixture of painting and by Rhys Griffiths hhhhI sharing his sense of isolation, despair and
Royal Academy of Arts carving crowned with a bizarre, spiralling helpless anger, his fate – and seemingly
wooden crest. An astonishingly tender BURIED is a near-perfect execution of an ours – hanging in the hands of the sinister,
by Timothy Barber hhhhI portrait of a man – titled St James the Less idea that’s both brilliantly simple, and faceless voices that are his only contact
– by El Greco shows all the subtle power utterly audacious as a film concept. A man with the outside world. The suspense
THERE’S a rather enjoyable quality of ran- that breathtaking artist could muster. A wakes up in a wooden box, which he real- Cortes creates is worthy of Hitchcock, while
domness to this exhibition, which covers pair of shady, rustic figures by Goya, ren- izes to his horror has been buried under- Reynolds does an impressive job acting
700 years of art history, mostly with works dered when Spain was fighting ground. He has only a mobile phone and a entirely on his back. Hardly enjoyable but
that have never been seen in this country Napoleon’s invading forces, ripple with cigarette lighter for company. That’s it, for utterly engrossing, Buried is gutsy, relent-
before. All that links the 221 pieces on dis- defiance. The final room of later art is a 94 minutes – and it’s riveting. less filmmaking and one of the most com-
play is that they are loaned from swirl of post-impressionism, modernism, Paul Conroy – played with skilled inten- pelling films of the year.

ALSO OUT THIS WEEKEND

FILMS, MUSIC, GAMES

FILM DVD MUSIC GAMES

MADE IN DAGENHAM Whimsical comedy drama AMERICAN: THE BILL HICKS STORY Documentary MARK RONSON AND BUSINESS INTERNATIONAL FIFA SOCCER 11 (PS3, PC, PSP, WII, X360) See if
about women who went on strike in the 1960s. about the late comedian. Third album time from the dapper hipster. you can underperform with the best of them.

TAKERS Hayden Christensen stars in this so so BAD LIEUTENANT – PORT OF CALL NEW ORLEANS NEIL YOUNG Le Noise is an album of sparse new DEAD RISING 2 (PS3, X360, PC) Fight zombies.
crime caper. Werner Herzog’s remake of the controversial film. songs from the rock veteran. Gee, how do they come up with these ideas?

BACK TO THE FUTURE The greatest oedipal time- THE KILLER INSIDE ME Casey Affleck stars in ERIC CLAPTON Slowhand releases his 19th solo TOM CLANCY’S HAWX (X360, PS3, WII, PC)
travelling film ever made. Michael Winterbottom’s shocking murder flick. album, called – wait for it – Clapton. Become a high-tech jet fighter pilot.
CITYA.M. 1 OCTOBER 2010 Lifestyle | Fashion 23

Stylish ways to keep out the cold

Classic shapes, tailored cuts and sober tones are the
order of the day for men’s and women’s coats this winter FOR HIM
5
3
1

2
4
1. 110th anniversary mid grey coat by Austin Reed, £350 austinreed.co.uk
2. Georgetown overcheck Melange coat by Gant, £500, gantuk.com
3. Mayfair velvet collar coat by Richard James, £415, johnlewis.com
4. Charcoal grey tweed topcoat by Dunhill, £1,295, dunhill.com
5. Duffle coat by Hackett, £375, hackett.com

3 FOR HER

1 2

1. Collarless cashmere coat by Alexander McQueen, £2,765, netaporter.com

2. Tab shoulder wool coat in cement by Jaeger, £299, johnlewis.com
5
3. Long tie coat by Hoss Intropia, £363.50, hossintropia.com
4. Short camel jacket by Aquascutum, £795, aquascutum.com
5. Angora-blend cropped jacket by Giambattista Valli £2,860, netaporter.com

YES, YOU DO NEED TO WEAR MAKEUP...JUST DO IT WITH SUBTLETY

Sara there’s no excuse, because cosmetics coun-
ters are falling over themselves to teach you
how to apply it, and what to get. Admittedly
start, you can always have lessons. Celebrity
make up artist Sue Sian (makeup4you.com)
gives excellent lessons on natural, profes-
tissue and rub gently over the bottom lashes.
That way they’ll get the colour but no spi-
ders or smudges, and will look really natural.
Hollamby some try too hard and overwhelm you with
possibilities, so you’re back to square one.
sional-looking make up. After all, if you’re
not used to it, you don’t want to suddenly
For a “no foundation” healthy glow, I love
Clinique’s Gentle Light Make Up or Estee

Style However, in answer to “Do I need it?”, if you

care about your image, spend money on
looking professional, and want to make a
Counsel good first impression, then the answer it
“yes”. Why splash out on an investment suit,
a classy pair of shoes and a good haircut
appear with false eyelashes and bright red
lipstick. You’d feel as uncomfortable wearing
it as the rest of your colleagues would seeing
Lauder’s Nutritious Vita-Mineral foundation
for winter, when you need a little more
cover. Both are very natural. Add a whisper
it – after all, make up is meant to enhance,
not entertain. Believe it or not, a small
of blusher to the apples of your cheeks and
your eyelids, and a smudge of soft lippy,
amount of natural-looking foundation, blush- and voila. Your face looks as fabulous as

I
HEAR it all the time: “I don’t wear any
make up because I don’t know how to
apply it...I haven’t got time...Do I need
it?...I don’t know what to buy.” Well,
only to neglect the most vital part – your er, mascara and lipstick is all you need (to the rest of you.
face. That doesn’t make sense to me. start with) to look “complete”. Sara Hollamby is a business image con-
If you can’t put makeup on because you One of Sue’s tips is only apply mascara to sultant with WorkingVoices.com email:
never have and you don’t know where to the top lashes (twice), then wipe the wand in sarahollamby@blueyonder.co.uk.
 24 Lifestyle | TV& Games CITYA.M. 1 OCTOBER 2010

BBC1 BBC2 ITV1 CHANNEL4 CH FIVE TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Real Rescues; BBC
News; Regional News
8pm EastEnders
8.30pm QI
9pm CHOICE Strictly Come
Dancing
10pm BBC News 10.25pm Regional
News 10.35pm Would I Lie to You?
11.05pm The National Lottery Draws
11.15pm FILM Scary Movie 4
2006. 12.30am FILM A Date with
Darkness 2003; Weatherview 2am
Sign Zone: Gears and Tears 2.30am
Sign Zone: Who Do You Think You
Are? 3.30am Sign Zone: The Private
Life of Pigs 4.30am-6am BBC News
6pm Eggheads
6.30pm Priceless Antiques
Roadshow
7pm Gardeners’ World Special
8pm Mastermind
8.30pm Golf: The Ryder Cup
10pm The Rob Brydon Show:
With Stephen Fry, Daniel Sloss
and Seasick Steve.
10.30pm Newsnight
11pm The Review Show;
Weather
11.50pm Later with Jools
Holland
12.55am FILM The Glass
Shield: Fact-based crime drama,
starring Michael Boatman, Lori
Petty and Elliott Gould. 1995.
2.40am-6am Close
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm Coronation Street 7.25pm 4thought.tv 7.30pm Jaguar Adventure with
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Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
23 5 15 43 14 
6 16
30 4 18  
16 19
Place the numbers from 1 to 9 in each empty cell so that each 28   
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 17 37
41
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 22 11
  
above or to the left of it. 7
You can only use the digits 1-9 16 20 
 and you must not use the
29 36
31   
same digit twice in a block. 10
     The same digit may occur 18 11  
13 13
     more than once in a row or
column, but it must be in a
12
14 12
10

22 12
   separate block.
13 
23 34
  7 8
 

   ACROSS DOWN
1 Condiment, sodium 1 Occasions for
    
     WORDWHEEL C I
chloride (4)
3 Distinctive spirit of
a culture (5)
buying at lower
prices (5)
2 After that (4)
Using only the letters in the Wordwheel, you have 6 Dried flowers used 3 Strong black
 ten minutes to find as many words as possible,
E D in brewing (4) coffee (8)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters N 7 Course of existence
of an individual (4)
4 Act of mass
destruction and

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
R N 9 Deliberately (2,7)
12 Form of address to a man (3)
loss of life (9)
5 Warhorse (5)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
A O 14 Important North
Atlantic food fish (3)
8 Number
represented
QUICK CROSSWORD 3 9 9 5 2 1
15 Respected leader in national by the Roman

6 ( 5 % , $ ) 7
6 8 9 7 4 9 5 7 SUDOKU         
or international affairs (9)
16 Crafty (3)
XLV (5-4)
10 Main character
4 5 6 2 1 7 8 3 9         
+ ( & ( / / $ 5
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$ 0 $ = 2 1 , 6         
9 6 & ( / ( 6 7 $ 1 4 2 4 1 Washington DC (inits) (3) novel by J M
        
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WORDWHEEL         
21 Agitate (4)
22 Edge tool used to cut
11 Male children (4)
13 Offshore area (4)
6 + ( $ 7 + ( 5 5         
( 1 $ 1 * , 1 $ 9 2 5 7 4 8 6 3 1 The nine-letter word and shape wood (4) 16 Grunt (5)
8 6 9 6 9 8 7 5         
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23 Link up, connect (3,2) 18 Acquiesce (5)
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24 Gaming cubes (4) 20 Employed (4)
 Punter
FOOTBALL TRADER BEN CLEMINSON HAS TEAMED UP WITH BETTORLOGIC
TO BRING YOU THE CITY AM FOOTBALL TRADER
Chelsea can get back
on track at the Bridge
CHELSEA
ARSENAL
SUNDAY – 4.00PM SKY SPORTS
IT isn’t often that Chelsea and Arsenal
meet each other having both lost their
previous league game but that’s exactly
what will happen on Sunday. Chelsea were
a little lacklustre at Eastlands against
Manchester City last Saturday but, in fair-
ness, Roberto Mancini’s side put in a very
disciplined and professional performance.
Arsenal were hugely disappointing
against West Brom at home and anyone
who backed the Baggies at 25/1 on Betdaq
would have been celebrating well into the
night. Arsene Wenger’s team were much
better in Belgrade on Tuesday and that
would have restored some of their confi-
dence ahead of this massive game.
The champions did the double over
Arsenal last season, scoring five goals
without conceding. The Blues have won
four of the last five league meetings
between the rivals and we all know how
strong they are at Stamford Bridge. They
have lost just one league game at the
Bridge in their last 34 and have only
drawn four games in that period.
Bettorlogic.com have unearthed a really
interesting stat when it comes to this
game. Chelsea have won 11 of their last 15
home matches when they have lost their
previous league game, while Arsenal have
won just two of 12 on their travels directly
after a league defeat.
Carlo Ancelotti’s side’s winning run at
home now stretches to eight league games
and 10 of the last 14 Premier League teams
MANCHESTER CITY
NEWCASTLE
SUNDAY – 1.30PM ESPN
IT was time for Manchester City to put
up or shut up against Chelsea last week-
end and they certainly silenced the
doubters with an accomplished perform-
ance. Roberto Mancini employed typical
Italian tactics and his defence – led by
the excellent Vincent Kompany – limited
the champions to only a handful of
chances.
Carlos Tevez has started this season
where he left the last one and now has
four league goals to his name. City are
LIVERPOOL
BLACKPOOL
SUNDAY – 3.00PM
LIVERPOOL’S season is going from bad to
worse and Roy Hodgson must be wonder-
ing why he left his comfortable life at
Craven Cottage. The Reds were pretty
inept again against Sunderland at Anfield
last weekend and they really need to start
Didier Drogba has a prolific scoring record against Arsenal.
to have done that have gone on to win their
ninth since 2005/06. It’s very rare to be able to
back Chelsea at just a shade of odds-on at the
Bridge and I would suggest snapping up the
3/4 with Paddy Power.
Games between the Big Four can often be
tight, tactical affairs and five of Chelsea’s last
six home matches against Big Four opponents
have featured two or fewer goals. The same is
true in nine of Arsenal’s last 16 trips to the
Big Four since 2004/05. The Blues are yet to
concede at home this season and although
Arsenal have scored one in each of their three
away games so far, I can see Petr Cech keeping
another clean sheet on Sunday.
Spread bettors are advised to sell goals at
very dangerous on home soil and difficult to
break down, so this will be no easy task for
Newcastle.
Chris Hughton’s side have been a measure
of inconsistency on their return to the top
flight. A 6-0 win at home against Aston Villa
and a 1-0 win at Everton prove that they have
enough quality to stay in this division, but
home defeats to Blackpool and Stoke under-
line what a challenge it’s going to be.
We saw the Magpies bounce back at
Goodison after the Blackpool defeat, but
Everton have struggled so far this campaign
and City will be a totally different kettle of
fish at Eastlands. The Sky Blues have won
eight of their last nine home games against
promoted sides – drawing the other – and
have recorded seven half-time / full-time vic-
tories.
Top-six sides generally have a strong record
winning some games soon if they are to have
any chance of finishing in the top four.
Blackpool come to town on Sunday and
have surprised everyone with the guts and
guile they have shown so far. However, they
have now lost back-to-back games for the first
time this season and are yet to win at home,
so the pressure is starting to creep up a notch.
If Liverpool don’t win this game, Hodgson
will have some serious problems, but I would-
n’t be backing them with stolen money at 1/3.
They are a side playing with a complete lack of
confidence and their only win so far this sea-
son was a 1-0 home victory against West Brom.
The Reds have been level at the break in all
25
Picture: ACTION IMAGES
2.6 with Sporting Index and I can see Chelsea
winning 2-0. That can be backed at 8/1 with
William Hill and I also wouldn’t put anyone
off having a few quid on Didier Drogba to
score the first goal at 4/1 with Paddy Power.
The Ivorian’s record against the Gunners is
outstanding – he has scored 12 goals in a
dozen games against them, with nine in his
past six appearances.
POINTERS...
Chelsea to win at 3/4 with Paddy Power
Chelsea to win 2-0 at 8/1 with William Hill
Didier Drogba to score first at 4/1 with Paddy Power
Sell total match goals at 2.6 with Sporting Index
at home when facing promoted teams. Since
2005/06, when facing promoted opposition
in the opening 10 games of the season, 13 of
22 (59%) games have been won by the half-
time / full-time double result. City have also
recorded that double in 11 of their 22 home
fixtures since the start of last season and I’d
advise backing that at 6/5 on Betdaq.
It’s difficult to know how the Magpies will
approach this game which makes it difficult
to recommend a correct scoreline. However,
City are beginning to gel and I wouldn’t be
surprised if they won this quite comfortably.
Sporting Index quote City supremacy at 1.3-
1.5 and I’d be happy to buy at 1.5.
POINTERS...
Manchester City HT / FT double result at 6/5 on Betdaq
Buy Manchester City supremacy at 1.5 with Sporting Index
three of their home games and also in six of
their 10 games hosting promoted sides since
2007/08. They have kept a clean sheet in eight
of those matches – drawing the other two 2-2
– and they are unbeaten when drawing at
half-time at Anfield since the start of last sea-
son.
I actually think Liverpool will have too
much for Ian Holloway’s battlers in the end,
so I’ll be backing the draw half-time /
Liverpool full-time double at 7/2 on Betdaq.
POINTER...
Draw HT / Liverpool FT at 7/2 on Betdaq
 26 Punter CITYA.M. 1 OCTOBER 2010

RACING TRADER BILL ESDAILE, OUR RACING EXPERT, TAKES A LOOK AT THE BEST BETS OVER THE WEEKEND…

No reason to oppose
Behkabad in the Arc POINTERS...
TAQLEED e/w 3.40pm Newmarket (tomorrow)

P
ARIS was hit by so much rain
earlier in the week that
Sunday’s Prix de l’Arc de
Triomphe will almost certainly
be run on bottomless ground.
Connections of the top three in the bet-
ting have all moaned about the weath-
er over the last few days, but strangely
all three have wins under their belts on
solid race, but may lack the required
gears at the business end. While old
favourite Youmzain, runner-up on
each occasion for the last three years,
will be looking to become the first
seven-year-old to win since Motrico in
1932. He may well make the frame
once more but doesn’t make too
much each-way appeal at 14/1 with
at around 16/1.
ABSINTHE e/w 3.40pm Newmarket (tomorrow)
REGAL PARADE looks like a crack- PLANET FIVE e/w 12.35pm Longchamp (Sunday)
ing each-way bet at around 8/1 in the AMICO FRITZ e/w 12.35pm Longchamp (Sunday)
Prix de la Foret over seven furlongs. REGAL PARADE e/w 2.20pm Longchamp (Sunday)
Dandy Nicholls’s mudlark has BEHKABAD 3.05pm Longchamp (Sunday)
already won in France this season CAVALRYMAN e/w 3.05pm Longchamp (Sunday)
and can shake up French wonder
mare Goldikova on ground she’ll Regal Parade looks a cracking each-way bet. Picture: PA
hate and over a trip that is too short

INSIDER
either very soft or heavy ground. Paddy Power. for her. She is a terrific lay on Betdaq

When trying to find the winner of
Europe’s richest race, I normally
always start (and often finish) with
the Prix Niel – 10 of the last 16 win-
If there is to be a massive shock, it
may well be Godolphin’s CAVALRY-
MAN at a massive 40/1. Last season’s
Prix Niel winner and Arc third will
the
at around 11/8 as she has been beaten
on three of the four occasions she
has run on ground this soft.
Back on home soil and Newmarket

ners have gone on to win the Arc.
BEHKABAD, this year’s winner, has
won all three of his lifetime starts at
Longchamp and the last two of those
wins have been over the 12 furlong
Arc trip on testing ground.
On both of those occasions he has
come out on top in titanic battles
with Planteur (who re-opposes again)
and there is every chance they will
fight out the finish once more on
Sunday. However, Behkabad won the
Prix Niel with a little more in hand
than the official winning margin of a
head may suggest and he is worth an
interest at 7/2 with Stan James.
Fame And Glory looks sure to run a
relish the big field and fast pace, and
looks sure to appreciate the cut in the
ground. He is far better than he has
shown so far this campaign and may
well surprise a few at a huge price.
The Prix de l’Abbaye is as difficult
as ever, as the forecast ground will
prevent the majority of these speed-
balls from showing their natural
pace. The fillies Swiss Diva and Lady
Of The Desert are the obvious ones
with their weight allowance, but they
are plenty short enough for such a
tough race. I’d prefer to take an each-
way chance on both PLANET FIVE and
AMICO FRITZ as they will relish these
conditions and are currently trading
stages the Cambridgeshire tomorrow
afternoon at 3.40pm. John Gosden is
bidding to land the race for the third
time in four years and his rapidly
improving Nationalism currently
heads the betting at 4/1. However,
that’s really short in a field of over 30
runners and I’d prefer to take a
chance on the stable’s supposed sec-
ond string TAQLEED at 12/1. He also
looks to be improving at a rate of
knots, will relish any juice underfoot
and has won at the track before. I’ll
also throw in Walter Swinburn’s
ABSINTHE at around 12/1 as another
who could be a couple of steps in
front of the handicapper.
A
fter a short trip to Las Vegas the
clock inside my body is all at sea.
But it was back in 2004 that a
horse running at this time of year
paid for a massive trip to the gambling
capital and a stop at the Breeders Cup,
that animal was Something Exciting and
we need to find another horse to do the
same again.
The £300,000 Tattersalls Millions
Fillies Trophy at Newmarket looks very
competitive. I quite like Date with
Destiny but I’m not sure the expected
ground will suit. I can see I Love Me
improving from her first run and winning
another massive prize but I’m not sure of
the form of her first outing. Together
looks a tough nut to crack and shouldn’t
mind the going, but I have a feeling that
SECRET LOVE (3% win) is the one to be
on.
I’m not sure the £500,000 Tattersalls
Millions Trophy at 2.25pm is much of a
race and as such let’s stick with likely
favourite FORMOSINA (5% win).
The Cambridgeshire looks tough, but I
think William Buick may have picked the
wrong John Gosden runner in
Nationalism. However, START RIGHT
(2% e/w) looks to be the sort for this
race and with Kieren Fallon in the saddle
he might just be able to take the prize.

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CITYA.M. 1 OCTOBER 2010 Sport 27

Johnson earns City point
MANCHESTER CITY
in the Europa League. Juventus took
1 the lead after just 10 minutes when
striker Vincenzo Iaquinta cut in from
Reds fail to end winless Contador blames positive drugs
run in Dutch stalemate
LIVERPOOL failed to win for a fourth
test on a contaminated meal
successive match last night when they
scraped a 0-0 draw at Utrecht. ple confirming the results.

the wing and unleashed a 35-yard
JUVENTUS 1 shot that clipped Kolo Toure on its
way past goalkeeper Joe Hart.
City responded, Gareth Barry head-
▲
The result in Holland keeps Roy
Hodgson’s men top of Europa League
Group K, but does little for the team’s
fragile confidence.
Captain Steven Gerrard may have
▲
CYCLING
But the amount of the banned sub-
TOUR de France winner Alberto
Contador last night blamed contami-
stance was so tiny – 400 times lower
than the level at which accredited lab-
nated meat for the failed drug test oratories must be able to detect – that

FOOTBALL
BY FRANK DALLERES
ENGLAND winger Adam Johnson
scored the equaliser as Manchester
City came from behind to earn a draw
ing against a post, before Yaya Toure
charged forward and slid a through-
ball for Johnson to control and prod
past the onrushing Alex Manninger.
It leaves City second in Group A,
behind Lech Poznan on goals scored.
been rested but it was an otherwise
strong side that went closest to scor-
ing when Fernando Torres saw a
close-range effort saved.
that threatens to destroy his reputa-
tion.
It emerged yesterday that three-
time Tour winner Contador tested
positive for the steroid clenbuterol
during this year’s race, with a ‘B’ sam-
the Spaniard insists there is only one
possible explanation.
“This is an error,” Contador said.
“It’s such a minimal amount that it is
only possible to come from a food
contamination.”

Results
Westwood to UEFA EUROPA LEAGUE GROUP A
Lech Poznan ...............(0) 2 SV Salzburg ....................(0) 0
Arboleda 47
Peszko 80 Att: 42,590

lead Europe
Man City ........................(1) 1 Juventus .............................(1) 1
Johnson 37 Iaquinta 10
Att: 35,212
P W D L F A GD Pts
Lech Poznan 2 1 1 0 5 3 2 4
Man City 2 1 1 0 3 1 2 4
Juventus 2 0 2 0 4 4 0 2

into combat
RYDER CUP
2010
BY FRANK DALLERES
ENGLAND’S Lee Westwood and
Germany’s Martin Kaymer will launch
Europe’s challenge to reclaim the
Ryder Cup when they face Phil
Mickelson and Dustin Johnson of the
United States in this morning’s open-
ing fourball.
Northern Irishman Rory McIlroy
did not get the clash with world No1
Tiger Woods that he craved, the
youngster and his partner, compatriot
Graeme McDowell, being pitted
against Stewart Cink and Matt Kuchar
in the second contest.
Woods and Steve Stricker, US cap-
tain Corey Pavin’s highest ranked pair-
ing, then meet the flamboyant Ian
Poulter and his fellow Englishman
Ross Fisher, before Europe’s Luke
Donald and Padraig Harrington com-
plete the morning by taking on Bubba
Watson and Jeff Overton.
Westwood has not played competi-
tively since the start of August owing
to a calf injury, but the 37-year-old is
SV Salzburg 2 0 0 2 0 4 -4 0
GROUP K
FC Utrecht ...................(0) 0 Liverpool............................(0) 0
Att: 23,662
Steaua Bucuresti....(3) 3 Napoli ....................................(1) 3
Cribari 2 (og) Vitale 44
Tanase 11 Hamsik 73
Kapetanos 17 Cavani 90
Att: 20,000
P W D L F A GD Pts
confident he and world No6 Kaymer,
making his Ryder Cup debut, are
Liverpool
Napoli
2 1 1 0 4
2 0 2 0 3
1
3 0
3 4
2
ready for the responsibility. “We are FC Utrecht
S Bucuresti
2 0 2 0 0
2 0 1 1 4
0
7
0
-3
2
1
both playing well and we are looking
forward to being first out and leading ICE HOCKEY
the team off,” said Westwood. “You’ve ELITE LGE: Cardiff 12 Edinburgh 4, Dundee 3 Coventry 4.
got to hit the ball sooner or later so RUGBY UNION
you might as well hit it first.” MAGNERS LEAGUE
Europe captain Colin Montgomerie Cardiff Blues ..............................22 Connacht ......................................6
said Westwood had requested to be in SPEEDWAY
his first pairing at Celtic Manor, near ELITE LGE KO CUP—2nd leg: Coventry 48 Wolverhampton
Newport, Wales. “I feel that the hon- 42 (Wolverhampton win 93-91 on agg).
our should be given to Lee to hit the PREMIER LGE—Play-off semi-final 2nd leg: Sheffield 61
first shot tomorrow morning for Edinburgh 31 (Sheffield win 92-90 on agg).
Europe,” said the Scot. “I think in Lee
asking for that position gave me no TODAY’S DIARY
option but to give him that honour.”
GOLF
THIS MORNING’S FOURBALLS The Ryder Cup (Celtic Manor, Newport, Wales).
ICE HOCKEY
07:45 Lee Westwood & Martin Kaymer v Elite League: Braehead Clan v Newcastle Vipers .
Phil Mickelson & Dustin Johnson RUGBY UNION
08:00 Rory McIlroy & Graeme McDowell Aviva Premiership: Bath v Gloucester (8.05), Sale v Wasps
(7.45).
v Stewart Cink & Matt Kuchar
Magners League: Benetton Treviso v Newport-Gwent D’gons
08:15 Ian Poulter & Ross Fisher v (6.05), Ulster v Glasgow (7.05).
Steve Stricker & Tiger Woods
08:30 Luke Donald & Padraig Harrington v
SPORTS EDITOR JON COUCH
Bubba Watson & Jeff Overton
Westwood has recently been sidelined by a calf injury. Picture: ACTION IMAGES email sport@cityam.com
 Sport
28 CITYA.M. 1 OCTOBER 2010

MONTY UNVEILS
RYDER CUP PLANS
WESTWOOD IN FIRST
EURO PAIRING: P27

EXCLUSIVE:
Strauss lifts
lid on fixing
furore
England captain tells why
Pakistani allegations about
his team were ‘a massive
slap in the face’

STRAUSS ON... STRAUSS ON... STRAUSS ON...

Being accused of throwing matches A turbulent summer Pakistan being accused of spot-fixing
“It is the worst thing anyone can say to you. If “I think it was my hardest time as a captain... There “I didn’t get a tip-off, I just saw it on the News at
they’re bringing your integrity as a cricketer into were so many players deeply disappointed and disil- Ten the night before. I was flabbergasted. I couldn’t
question – especially in the context of what had lusioned. You felt all your efforts in previous matches quite work out how the Test was going to go ahead
been going on this summer – there is nothing worse, had been devalued, and it gets you questioning the next day. And I have never played in a worse
and there is no bigger affront to you as a person.” everything you’ve ever done on a cricket field.” atmosphere than that. It was horrendous.”
money to lose” the third one-day keen to draw a line under the spat. tous meeting to unite an England sense of relief as soon as that final
▲

CRICKET
BY FRANK DALLERES
ENGLAND captain Andrew Strauss
has laid bare the full extent of his
fury at seeing the team accused of
match-fixing by Pakistan Cricket
Board chairman Ijaz Butt, calling the
claims “a massive slap in the face”.
In a candid interview with City A.M.,
Strauss says Butt’s remarks – retract-
ed on Wednesday, after more than a
week – were the ultimate insult fol-
lowing a hugely turbulent tour over-
shadowed by serious and detailed
allegations that members of the
Pakistan side had accepted bribes.
Strauss admits the summer was his
toughest spell as skipper and reveals
how he had to talk livid players into
completing a series that he himself
could not wait to finish and now
regards as “devalued”.
He also tells how he was “flabber-
gasted” at hearing of the original
spot-fixing claims against Pakistan on
the TV news, and calls the atmos-
phere the following day at Lord’s the
worst he has ever experienced.
“I was outraged,” Strauss said of
Butt’s claim that some England play-
ers were paid “enormous amounts of
international.
“I felt that as a group of players
we’d done very well not to embroil
ourselves in it in any way. We hadn’t
got involved with them on the pitch;
the guys had gone about their busi-
ness in a good professional manner.
So then to be brought into it by the
chairman of the Pakistan Cricket
Board was a massive slap in the face,
and one that we weren’t prepared to
stand for.
“It is the worst thing anyone can
say to you. If they’re bringing your
integrity as a cricketer into question –
especially in the context of what had
been going on this summer – there is
nothing worse, and there is no bigger
affront to you as a person than for
someone to say you’re dishonest.
“In hindsight, maybe he was doing
it in a bit of a tongue-in-cheek fash-
ion, but at the time you just see the
quotes in the newspapers. It’s one
thing some guy in the street saying it;
it’s another when it’s the chairman of
the Pakistan Cricket Board.”
Butt’s retraction did not include
the “full and unreserved apology”
that the England and Wales Cricket
board had demanded, but Strauss is
“I think we all want to move on
from the matter,” he says. “I think it’s
cleared our names – he’s said there
was no evidence to it. I think the most
important thing for us was that there
was no remaining question that we
might have been involved in anything
like that again, and I think I’m far
more comfortable now that that’s the
case.”
In the storm that followed Butt’s
allegations, Strauss held a momen-
Ijaz Butt has retracted claims England play-
ers took bribes. Pictures: ACTION IMAGES
camp divided on whether to see out
the last two matches of the one-day
series.
“I think it was my hardest time as a
captain,” he says. “After Ijaz Butt
came out with his comments and we
were in the room deciding what we
should do, that was pretty tough
because there were some pretty
strong views from a number of differ-
ent players.
“The most important thing for me
was we came out of it as a united
force, and that’s great testament to
some of the players who had to bite
their lip and get on with it.” There
was, in the end, “if not consensus
then very nearly consensus”, he adds.
Strauss, who is an ambassador for
the FTI MVP rankings, a statistical
analysis system created in conjunc-
tion with FTI Consulting, added:
“There was definitely part of me that
was tempted to walk away from the
series. I had very strong misgivings
about it going ahead.”
England completed a 3-2 series vic-
tory on 22 September, bringing a wel-
come end to a tour that he concedes
was tainted.
“I think there was an immediate
one-dayer finished,” he says.
“Everything we did on the pitch had
some sort of subtext to it; to a large
extent it was overshadowed by things
happening off the pitch.”
The suspicion that dogged Pakistan
stemmed from allegations made in a
Sunday newspaper during the fourth
and final Test that captain Salman
Butt, Mohammad Asif and
Mohammad Amir had engaged in
spot-fixing earlier in that same
match. The first Strauss heard of it
was while watching television.
“I didn’t get a tip-off, it was just on
the News at Ten the night before and
it was the lead story,” he recalls. “I was
flabbergasted. I couldn’t quite work
out how the game was going to go
ahead the next day at that stage. And
I have never played in a worse atmos-
phere than that. It was horrendous.
“There were so many players deeply
disappointed and disillusioned by
what had gone on because you felt all
your efforts in previous matches had
been devalued, and it automatically
gets you questioning everything
you’ve ever done on a cricket field.
And that’s why it’s such a horrendous
blight on the game.”
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