BUSINESS WITH PERSONALITY
ALL SQUARE
Issue 1,283 Monday 13 December 2010
LORD MAYOR HITS
OUT AT PAY RULES
BANKING
▲
BY JULIET SAMUEL
THE Lord Mayor of London Michael
Bear has slammed new EU laws regu-
lating bonus payments as “political
point scoring” that will drive business
out of Europe and destroy London’s
status as a global financial capital.
In his column for City A.M. today,
Bear says: “These laws will be amongst
the most restrictive in the world…
political expediency is placing our
future international competitiveness
at risk.” He adds: “London will remain
the financial capital of Europe but
what good is that if we cannot com-
pete in the global marketplace?”
The Committee of European
Banking Supervisors – a body of
European regulators including repre-
sentatives from the FSA – approved its
new rules on Friday, to dismay among
finance workers.
The rules forbid banks and other
financial institutions from paying any
more than 20 per cent of a bonus in
cash up front and mandate that at
least 50 per cent of the bonus must be
in non-cash instruments such as
shares.
In addition, at least 40 per cent of
the bonus must be deferred and paid
over three to five years, with “claw-
back” clauses – whereby a bank can
take back money paid to those later
seen to have caused losses – made
mandatory for key staff.
For staff paid “a particularly high
amount”, the rules stipulate that 60
per cent of the bonus must be
deferred.
The guidelines will now be exam-
ined by the FSA, which is due to release
its interpretation of them in the next
two weeks.
Despite holding a public consulta-
tion on the rules, CEBS has made
almost no changes to its draft guide-
lines published in October. PwC remu-
neration partner Jon Terry says:
“European regulation of banking pay
is now set to be the most stringent in
the world… Other non-European regu-
lators have shown little appetite for
prescription, placing EU-regulated
firms at a distinct disadvantage.”
FTSE 100 ▲5,812.95 +4.99
ITV CASHES IN ON
X FACTOR
CHANNEL GETS £25M BOOST
Left to right: Lord Mayor Michael Bear, CEBS chair Giovanni Carsorio and business secretary Vince Cable.
The rules also contain apparent con-
tradictions: for example, they require
regulators to consider the overall per-
formance of an instutition in deciding
whether a bonus is appopriate.
Yet they also stipulate that institu-
tions must pay bonuses “linked as
closely as possible to the level of the
decisions made by the staff member”.
This means that if a junior staff
member performs well, but the overall
institution performs badly, it is not
clear which fact should be considered
more important in deciding the
bonus.
The guidelines are similarly unclear
on the ratio between bonuses (“vari-
able components”) and base salary
(“fixed components”). Overall, they
say: “It is not possible to decree one
optimal relationship between the
fixed and variable components of
remuneration” and demands only
that they must be “balanced”.
But regarding “control function per-
DOW ▲11,410.32 +40.26 NASDAQ ▲2,637.35 +20.87
www.cityam.com
sonnel” the rules stipulate that the
best payment structure would “be
weighted in favour of fixed remunera-
tion” (towards salaries).
The rules apply to employees of all
banks head-quartered in Europe,
including those working outside the
EU, although City lawyers have said
that it is possible some of the smaller
City firms may escape on the grounds
that they pose little sytemic risk.
However, the UK has some of the
most draconian pay rules in the world.
Their scope will be dramatically
increased in January when the num-
ber of firms to which the code applies
jumps from 26 to 2,500.
Alex Mizzi, employment lawyer at
Dawsons, said: “The new code gives
unprecedented power to the FSA over
the internal reward and incentive
structures of financial institutions.”
And the EU rules could be in addi-
tion to any extra taxes imposed in the
UK, such as the special 50 per cent
£/$ 1.58 unc
P14
Pictures: REUTERS
bonus tax brought in by Labour.
Chancellor George Osborne recently
warned bankers to “look around you
at the world you live in before you
make your decision” on bonuses.
There are also growing concerns
about the personal tax impact of the
rules: bankers whose bonuses are
deferred might nonetheless have to
pay the tax due on them up-front dur-
ing the year in which they are award-
ed. This means that all the up-front
cash that bankers receive as part of a
bonus will go straight into the trea-
sury’s coffers.
City recruiters report that firms
have already begun to alter their com-
pensation schemes in response, pay-
ing more in basic salaries instead of
bonuses.
Recruiter Marks Sattin says it has
seen a jump of 10-15 per cent in basic
salaries since June.
ALLISTER HEATH: PAGE 2,
LORD MAYOR: PAGE 17
£/¤ 1.19 unc ¤/$ 1.32 unc
AT THE LANE
LAST MINUTE
PENALTY SAVE
DENIES BLUES P26
FREE
500,000
households
in negative
equity
▲
PROPERTY
BY JULIAN HARRIS
CLOSE to half a million British house-
holds could be facing negative equity,
according to survey released today by
the Bank of England.
Between four and five per cent of
mortgage holders owe more than the
value of their properties, it was
revealed in the Bank’s final quarterly
bulletin of this year. There are 11.4m
mortgages in the UK, according to the
Council of Mortgage Lenders.
The figures remain considerably
worse than prior to the recession.
Approximately four times as many
households face negative equity as in
2007.
And more people could fall into
negative equity if house prices drop
further.
Close to one in five mortgage hold-
ers have debts exceeding 75 per cent
of the value of their properties, “not
much changed” from last year, the
report says.
House prices will fall by 2.7 per cent
in the coming financial year, the
Office for Budget Responsibility (OBR)
forecast last month. Previously it had
expected a rise of 2.3 per cent.
This month asking prices fell by
three per cent, Rightmove revealed
today. And asking prices could fall by
five per cent next year, the property
website estimates.
The number of first time buyers
“remains relatively low,” the Bank
said. Despite low house prices and low
mortgage rates, modest wage growth
and tight credit conditions continue
to deter buyers from the market.
High deposit requirements are
resulting in prospective first time
buyers saving for the future, even
thought interest rates remain low.
“Around a quarter of renters who
reported they were increasing saving,
were doing so to finance a deposit,”
the report said.
However, the situation is positive in
comparison to the US housing mar-
ket, where roughly 11m households
face negative equity.
ECONOMICS: PAGE 15
Certified Distribution
1/11/10 - 28/11/10 is 113,348
 2 News
Tackle bondholders – not staff pay
EDITOR’S LETTER
ALLISTER HEATH
ALMOST incomprehensible. That is the
only way to describe the rules govern-
ing pay and bonuses for the financial
services industry unveiled by the
European Union on Friday. Only one
thing is clear from the 82-page docu-
ment, which could affect up to 2,500
UK firms: it will make many lawyers
and compliance officers rich.
It makes sense for companies to
align long-term interests with those of
employees; this has already happened
across the financial services industry.
Some firms did incentivise some of
their staff – especially those with a
7th Floor, Centurion House,
24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
Sports Editor Frank Dalleres
Art Director Craig Gaymer
Pictures Alex Ridley
Commercial
Sales Director Jeremy Slattery
Commercial Director Harry Owen
Head of Distribution Nick Owen
Distribution helpline
If you have any comments about the distribution
of City A.M. Please ring 0207 015 1230, or email
distribution@cityam.com
Editorial Statement
This newspaper adheres to the system of
self-regulation overseen by the Press Complaints
Commission. The PCC takes complaints about the
editorial content of publications under the Editor’s
Code of Practice, a copy of which can be found at
www.pcc.org.uk
Printed by Newsfax International,
Beam Reach 5 Business Park,
Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
CREDIT SUISSE TO ISSUE COCOS EARLY
Credit Suisse’s chief executive said he
hoped to begin issuing billions of dol-
lars in contingent-capital bonds in
the next year to help shore up the
bank’s financial strength well ahead
of new Swiss regulations. Brady
Dougan also defended Credit Suisse’s
decision to award one-off payments to
about 400 senior employees whose
bonuses had been slashed to avoid a
50 per cent supertax on bonuses over
£25,000 in the UK.
MYNERS CALLS FOR BANK BREAK-UP
Lord Myners, City minister in the last
government and a key figure in the
financial bail-outs at the height of the
global crisis, has called for a break-up
of Britain’s biggest banks. He argues
that the future of the industry “lies in
less monolithic institutions” and
urges the Commission on Banking, to
focus on boosting competition.
sales role – to behave excessively exu-
berantly. Yet to acknowledge the need
for reform and for staff to have more
skin in the game does not mean
accepting that the best way forward is
for the government to step in (even the
EU does not put a quantitative cap on
total compensation, or even a blanket
rule on the proportion of total pay that
can be accounted for by bonuses).
Supporters of the EU’s proposals –
which restrict the proportion of cash
in bonuses and ensure that they are
deferred over 3-5 years – must answer
the following questions. First, why
would chastened shareholders not
force firms to make sure that pay poli-
cies were sufficiently long-termist?
Second, if short-termist bonus policies
were so important in fuelling the bub-
ble, why is there no robust academic
evidence that demonstrates this?
Third, how come Lehman, AIG and
other flawed firms actually paid a
large proportion of their bonuses in
shares, as the EU wants, and yet they
still went bust, wiping out many ordi-
Bloomberg: I
will not run
US POLITICS
▲
BY HARRY BANKS
NEW York Mayor Michael Bloomberg
yesterday fiercely denied rumours he
would run as an independent for the
US presidency.
Asked if he would fight for the US
top job, the 68-year-old mogul said,
“no way, no how”.
Appearing on NBC’s television
show “Meet the Press”, Bloomberg
said he intends to remain focused on
being mayor, and that those urging
him to seek the presidency “should
cease and desist”.
“The bottom line is that I’ve got a
great job,” Bloomberg said.
“I want to go out being, having a
reputation, as a very good, maybe the
greatest mayor ever.
“I’m not going to run for presi-
dent,” Bloomberg said.
BARRATT TO REFINANCE £1.45BN
Barratt Developments has opened
talks with lenders to refinance its
£1.45bn borrowing facilities less than
a month after Taylor Wimpey, its
largest rival, agreed new banking
arrangements. Barratt, the UK’s
largest housebuilder by volume,
entered preliminary discussions with
its banks, including Lloyds, HSBC and
Royal Bank of Scotland, during the
past few weeks to secure new facili-
ties by the middle of next year,
according to sources familiar with
the situation.
HYBRID CAR SALES TO TOTAL UNDER 1M
Sales of hybrid cars will total less than
1m this year and account for barely two
per cent of the world passenger-vehicle
market. JD Power and Associates esti-
mates sales of the cars, which are driv-
en by batteries over short distances and
a combustion engine over longer ones,
will reach 934,000 this year, up from
728,000 in 2009, the industry’s worst
year in decades.
nary employees?
Luigi Zingales of the University of
Chicago, co-author of Saving
Capitalism from the Capitalists, puts it
well. He points out that “there is no
evidence” supporting the view that
bonuses fuelled excessive risk-taking.
He says that “much research has tried
to establish a connection between
bankers’ compensation schemes and
risk-taking, but has failed to find one.
At most, such research has found that
more highly paid executives took
greater risks, but it is unclear whether
this is a cause or an effect.”
One problem is that there is limited
available data to establish whether any
causal relationship exists between per-
formance-related pay and risk among
lower-level managers, as opposed to
directors. This may change once
America’s Financial Crisis Inquiry
Commission, which has subpoena
powers, eventually publishes its report,
but is doubtful whether academics
will ever show anything more than a
minor causal link between bonuses
But he said he will continue to
speak out on national issues that
impact New York, such as immigra-
tion, federal regulation and US trade.
A multibillionaire and founder of
the Bloomberg news media empire,
Bloomberg is a former Democrat
turned Republican turned independ-
ent. He is in his third term as mayor
of New York, with his current term
not ending until 2014.
While some of Bloomberg’s back-
ers have urged him to run,
Bloomberg attributed the talk to
press rumours.
New York mayor
Michael Bloomberg
has scotched talk he
will run for presidency
in the 2012 election.
CORPORATE BOSSES HEAD FOR WHITEHALL
David Cameron hopes to inject pri-
vate sector discipline into Whitehall
by appointing some of Britain’s top
business leaders to new corporate-
style boards for government depart-
ments. The chief executives of
GlaxoSmithKline and Centrica,
Andrew Witty and Sam Laidlaw, are
among the new non-executive direc-
tors due to be announced this week.
DISNEY TO WIDEN APPEAL TO GEEKS
Walt Disney is trying to persuade
more women to enter the macho
world of science fiction by wooing
them with two timeless attractions:
shoes and jewellery. Almost 30 years
on from the original Tron film, the
world’s biggest media company is tap-
ping into the growing female market
for “geek chic” with a range of high-
end Tron-themed accessories ahead
of the release of the sequel.
and the crisis.
The real driver of risk was that bond-
holders knew they would be bailed out
and ceased to care; the cost of credit
collapsed and risk premia fell to near
zero. Seeing this, shareholders had an
incentive to ensure their bank levered
up as much as possible – having access
to subsidised credit, courtesy of the
government, promotes gambling at
taxpayers’ expense. It is this moral haz-
ard that must be tackled, via systems
that allow firms to go bust and bond-
holders to be wiped out. The best way
to reduce excessive risk-taking is to
reintroduce capitalism and the fear of
failure, not to hit hundreds of thou-
sands of employees with new rules.
As Zingales points out, restricting
staff incentive pay without changing
shareholders’ and bondholders’ incen-
tives will only make shareholders want
to be more actively involved and find
other ways to increase risk-taking. It is
a shame that the EU, in its obsession
with regulating pay, cannot see this.
allister.heath@cityam.com
Mark Madoff’s body is collected from his apartment
Madoff son: the final email
FRAUD
▲
BY MATTHEW WEST
THE eldest son of convicted fraudster
Bernard Madoff was found hanged in
his New York apartment on the sec-
ond anniversary of his father’s arrest,
just hours after he sent an email say-
ing: “Nobody wants to hear the
truth.”
Mark Madoff, 46, who had worked
at his father’s firm, “succumbed to
two years of unrelenting pressure
from false accusations and innuen-
METRO BANK RAISES £52M FOR GROWTH
Metro Bank has successfully completed
its second round of capital raising and
can now accelerate its expansion in UK
retail banking. The bank, the first high
street bank to be launched in a centu-
ry, raised £51.7m at a 20 per cent pre-
mium to its original share price.
Vernon Hill now owns 21 per cent of
the bank and has a stake worth £32m.
HEDGE FUNDS HEAD FOR HIGH COURT
ACPI Investments, the London-based
hedge fund with more than $2.75bn
(£1.74bn) on its books, is set for a High
Court clash with a rival fund after the
departure of one of its senior man-
agers. ACPI, run by ex-Goldman Sachs
colleagues Alok Oberoi and Brett
Lankester, has filed a lawsuit against
RMG Wealth Management, seeking to
ban it from using what it alleges is
confidential information gained from
Stephen Greene.
CITYA.M. 13 DECEMBER 2010
NEWS | IN BRIEF
Nick Clegg’s popularity falling
The popularity of Nick Clegg has plum-
meted and supporters are deserting his
party over plans to raise university
tuition fees, said a poll published yester-
day. Parliament voted on Thursday in
favour of plans to allow English universi-
ties to almost treble current fees, a poli-
cy that has divided Clegg's Liberal
Democrat party and led to violent
protests in London. Before May's elec-
tion Clegg and all his party's MPs had
pledged to vote against any rise. In
April, a poll rated him as the most popu-
lar British party leader since World War
Two Prime Minister Winston Churchill.
Now 61 per cent describe the deputy
prime minister as untrustworthy, says
an Ipsos MORI poll for the News of the
World.
Swedish bomb suspect: UK link
A man claimed by an Al-Qaeda-linked
website to be behind bomb blasts in
Sweden reportedly lived in Britain and
studied at the studied at the University
of Bedfordshire in Luton. Taymour Abdel
Wahab was identified by website
Shumukh al-Islam as the man behind
two weekend bomb blasts in Stockholm.
Picture: GETTY
do”, his lawyer said over the weekend.
Madoff was found dead in his
apartment in the city’s SoHo neigh-
bourhood on Saturday.
In a statement, Martin
Flumenbaum, a lawyer for Madoff
and his younger brother, Andrew
said: “Mark Madoff took his own life
today. This is a terrible and unneces-
sary tragedy. Mark was an innocent
victim of his father’s monstrous
crime.” Madoff’s two-year-old son was
in the apartment when the body was
discovered by his father-in-law.
TAX DEAL SET TO PASS SENATE
Democrats are predicting that a
much-debated tax agreement will
win approval comfortably in the
Senate on Monday, with a margin
that they hope will add momentum
to the deal in the House. But even
with President Barack Obama, former
President Bill Clinton and a growing
number of Senate Democrats backing
the deal, House Democrats remained
eager to test whether they could push
Republicans to raise the proposed tax
rate on estates.
OPEC STEADY WITH TARGET OUTPUT
OPEC left its crude-oil production
ceiling intact, despite recent signs
that a recovering world economy
might pressure the group to open its
spigots next year. The Organisation of
Petroleum Exporting Countries kept
its targeted oil output rate at 24.85m
barrels a day at a meeting Saturday.
CITYA.M. 13 DECEMBER 2010
CSC refuses
Simon’s plan
for Peel deal
▲
PROPERTY
BY MARION DAKERS
SIMON Property tried to give takeover
target Capital Shopping Centres (CSC)
a peace offering linked to its £1.6bn
purchase of the Trafford Centre yester-
day, after weeks of trying to block the
deal.
However, Capital rejected Simon’s
offer of £800m to help fund the pur-
chase last night, because it meant the
US group taking a bigger stake in the
company and would obliterate the
stake given to Trafford Centre owner
Peel Holdings, one source close to the
firm said last night.
The deal agreed last month would
give Peel Holdings a 20 per cent stake
in Capital, worth 367p a share, and
install its chairman John Whittaker on
the board of directors.
Simon, the world’s biggest shopping
mall owner, argued Peel was getting
shares at an unfair discount to CSC’s
net asset value.
Chief executive and chairman David
Simon said in a letter to the CSC board
yesterday it had been speaking to
other shareholders “who have
expressed similar concerns”.
The American firm yesterday
offered to underwrite a Capital share
issue of 205.5m shares at 400p each
and give the cash proceeds to Peel
instead of a share holding.
Simon asked for a stake in Capital of
between 18.4 and 27 per cent as part of
the new offer, depending on whether
other investors join the share placing.
Earlier, Simon had pleaded with
Capital to suspend the purchase of the
shopping centre near Manchester
while it prepared a takeover offer.
Capital has an emergency general
meeting planned for 20 December to
let investors vote on the Trafford
Centre deal with Peel Holdings, and
Simon has now urged for this to be
postponed.
“We are deeply disappointed that
CSC has failed to give our proposal due
consideration, and in so doing, has
ignored the concerns of both Simon
and other long-term CSC sharehold-
ers,” said Simon last night.
Capital Shopping Centres hopes to buy the Trafford Centre
News 3
Hackers under
suspicion for
Amazon crash
▲
TECHNOLOGY
BY STEVE DINNEEN
WEB giant Amazon last night became
the latest suspected victim of a cyber
attack by supporters of WikiLeaks.
The firm’s website was out of
action for more than half an hour
during one of the most lucrative
shopping days in the run-up to
Christmas.
The firm’s operations in the UK,
France, Germany and Spain were all
affected, although the firm is yet to
confirm the outages were the result
of hackers.
Amazon became a target for sup-
porters of WikiLeaks after it decided
to kick the website off its servers after
allegedly coming under pressure
from the US Senate Homeland
Security Committee.
Activists operating under the name
Anonymous had urged an online
attack to crash amazon.com by over-
whelming it with requests from
users. The attack is triggered by sup-
porters downloading a tool that
allows thousands of computers to be
remotely controlled by one master
PC.
Last week the activists briefly
brought down the sites of credit-card
giants MasterCard and Visa which
had stopped processing donations to
Picture: REX WikiLeaks.
 4 News CITYA.M. 13 DECEMBER 2010

Roger Carr backs 50p tax A supporter of the

left-wing Democratic
Party (PD) holds a
placard protesting

rate for high earners - for now

against Silvio
Berlusconi's govern-
men. The march was
on Saturday in Rome.
Picture: GETTY

of economic adversity he thought, Martin Broughton as an “act of eco-

▲

TAXATION
BY DAVID HELLIER
ROGER Carr, the new president of the
CBI, has said that, on a personal basis,
he backs the 50p tax rate for higher
earners at the present time.
Carr, speaking to City A.M. yester-
day, said that, like most business peo-
ple, he wanted lower taxes eventually
to encourage more people to be entre-
preneurial.
But that during the current period
from a personal point of view, that it nomic vandalism”.
was not “unreasonable” for those Carr, who chaired Cadbury until it
with the ability to pay to make a con- was taken over by US-controlled Kraft,
tribution. “Going forward I hope we is widely expected to use his influ-
see positive momentum on the tax ence within the CBI to scrutinise the
front,” he said. UK’s mergers policy to see whether
The 50p tax rate, which affects the national interest is always best
those earning over £150,000 a year, served by such takeovers.
was brought in by the previous Shortly after Cadbury admitted
Labour government but has been defeat, Carr launched a debate about
maintained by the coalition. It was the City’s takeover panel rules which
attacked by former CBI president is still ongoing.

| PROMOTION

Power
The
Hundred Italian vote
TELL US YOUR TOP 3 CHOICES
FOR THE POWER HUNDRED 2011
2011
spooks bonds
WIN ONE OF 7 PAIRS OF FLIGHTS that even if he wins the vote, his
▲

EUROZONE CRISIS

TO ANY CITYJET DESTINATION* BY JULIET SAMUEL

THE prospect of political turmoil in
The Power Hundred 2011, published on Two years ago, the Power Hundred was Italy is spooking sovereign debt mar-
kets, pushing the yield on Italian
22 December in City A.M., will highlight all dominated by those involved in rescuing the bonds back towards the highs seen
those who will be calling the shots in the City in banks. This year's list will have a different just before Ireland agreed to apply for
2011, whether they be bankers, lawyers, chief complexion, with dealmakers and successful a bailout.
With Italian prime minister Silvio
executives or hedge fund managers. business leaders in the ascendancy. Berlusconi facing a no-confidence
vote tomorrow after thousands came
out in protest against him over the
FOR YOUR CHANCE TO WIN, SIMPLY TELL US YOUR TOP 3 CHOICES FOR THE POWER HUNDRED. A NEW WINNER WILL BE CHOSEN EACH DAY. weekend, investors are ready to flee
the peripheral Eurozone country.
WHO WILL TOP OUR EXCLUSIVE CLUB THIS YEAR? The yield on Italian 10-year bonds
closed at 4.6 per cent on Friday, up 100
authority will not be secure.
Gianfranco Fini, who withdrew his
support from Berlusconi in July, said:
“If the no confidence motion does not
pass, we will have a government that's
just trying to survive. That’s not stabil-
ity, that’s vegetating.”
It means that he might have trou-
ble pursuing the over-arching reforms
required to improve Italy’s competi-
tiveness and deal with its public debt.
ANALYSIS l Italian 10-year gilt yields
4.7 %

Go to www.CityJet.com/cityam to submit your entries. basis points in just over a week.

Berlusconi could be toppled from
4.5

Don’t forget to pick up City A.M. on 22 December to check out who's up, who's down, which banker is power tomorrow after a run of scan-
pulling the best deals, who has entered our exclusive club and who has dropped out of it. dals involving young women and 4.3
charges of corruption, with his fate
*from London City Airport, excluding Milan Linate. Terms and conditions apply riding on a knife-edge vote in parlia-
ment.
But his political opponents said 11/16 11/22 11/26 12/2 12/8

To celebrate this year’s list, CityJet, City A.M.’s partner for the Power
Hundred 2011, is giving away one pair of flights each day for 7 days in the run
up to the list. CityJet is a subsidiary of one of the largest airlines in the world Bank exposure to Ireland and
and offers a choice of over 480 flights a week to 14 major European and UK
business centres from London City Airport. With just a 15 minute check-in
southern Eurozone above forecast
time - the shortest of any UK airport - CityJet are the smartest choice for German banks’ exposure to Ireland
▲

BANKING
time-conscious business and leisure passengers in London. BANKS’ total exposure to Ireland and
the southern rim of the Eurozone in
TERMS & CONDITIONS: The prize is 7 pairs of tickets, valid for flights to any of the CityJet (London City network) destinations excluding Milan Linate. The promotion commences the second was greater than previous-
13 December 2010 at 00h00. The promotion closes 21 December 2010 at 24h00. Entrants must be over 18 years of age. Entry is open to all residents. Employees of CityJet, VLM, ly thought, according to data from
Air France, CITY A.M. and the immediate families are not eligible to enter. Flights cannot be exchanged for cash. Only one entry per person is permitted for each day of the promotion. Entry
into the promotion is free. Entrants must provide their name, email address and telephone number. Each entrant acknowledges and agrees that tickets must not be resold or the Bank for International
used for advertising, promotion or other commercial purposes. Flights are not available on bank holidays in UK and Europe. Flights must be taken before 30 June 2011. It is the winner’s Settlements published yesterday.
responsibility to ensure the winner and their guest have passports that are valid for 12 months, and any necessary visas. The winner and their guest are responsible for their own travel The data showed UK banks had the
insurance. Travel expenses and accommodation are not included. The judge’s decision is final and no correspondence will be entered into. CityJet exclude liability for any loss, damage or highest exposure to Ireland at the
injury whatsoever suffered or sustained arising out of or in connection with this competition. Winners will be drawn randomly from all entries received. Winners will be notified by
telephone before 31 December 2010. Details from all entries will be collected and used for the purposes of conducting this competition and for surrounding publicity purposes. end of the second quarter. UK banks’
exposure was $187.5bn (£119bn), and
was $186.4bn. Spanish banks had the
highest exposure to Portugal, with a
figure of $98.3bn and German banks
topped the list of Spanish creditors,
with a total exposure of $216.6bn.
France’s total exposure to Greece
stood at $83.1bn, while German
banks’ was $65.4bn.
Total foreign exposures of BIS-
reporting banks to Greece, Ireland,
Portugal and Spain was $2.28 trillion.
 6 News
Iceland Foods could be target
for Middle Eastern consortium
▲
CONSUMER
BY STEVE DINNEEN
GROCERY giant Iceland is a potential
target for a powerful consortium of
Middle Eastern businessmen who are
interested in snapping up the assets
of failed Icelandic banks Landsbanki
and Glitnir.
The two banks own 76 per cent of
the food chain, which could become
the target of a bidding war. The
firm’s management already have a 24
per cent stake in the company and
are understood to have had a £1bn
approach for the remainder knocked
back earlier this year.
A battle between founding chair-
Founder and chairman
Malcolm Walker is
believed to have had a
£1bn approach for
Iceland rejected
man Malcolm Walker and the gulf
investors, represented by Global
Banking Corporation of Bahrain,
could push the value of the firm as
high as £1.5bn.
Iceland reported a 19 per cent
jump in profits last year. However, the
firm has had a checkered recent his-
tory, with Icelandic conglomerate
Baugur acquiring its parent company
Big Food Group for £326m before col-
lapsing, handing control of the chain
to its banks’ administrators.
CBI director-general John Cridland questions new retireman plans
CBI wants a
smoother run
to retirement
▲
UK ECONOMY
BY ALISON LOCK
THE Confederation of British
Industry has called on government to
answer businesses’ concerns over
scrapping the UK’s default retirement
age of 65.
Businesses fear the plans will force
them to “retire” employees through
performance-based dismissal – a long
and demoralising process that could
cause tribunal claims to soar.
The CBI has proposed five changes
to plans to abolish default retirement
age from April 2011 – the first being
to delay the decision by a year.
John Cridland, CBI director-general
designate, said scrapping the retire-
ment age so soon would create a “leg-
islative void.”
While employers understood the
need for people to work for longer,
“working beyond 65 is not going to be
possible for everyone,” he said. “We
General Electric set to agree bid
for UK services firm Wellstream
▲
ENERGY
US conglomerate General Electric
(GE) is said to have agreed a £755m-
plus takeover of the UK oil and gas
services group Wellstream.
Wellstream previously rejected
GE’s offer of 750p, which valued the
UK firm at £755m, as too low.
However, the latest deal, agreed in
the last few days, is reportedly higher
than 750p a share but less than 800p.
CITYA.M. 13 DECEMBER 2010
Picture: GETTY
need to modernise our employment
law framework to ensure that it is fit
for purpose.”
The CBI proposes simplifying per-
formance management and unfair
dismissal laws; giving employers
more advice on their right to impose
their own retirement age; and allow-
ing employers to stop offering occupa-
tional benefits once employees pass
the state pension age.
It is concerned at the lack of guid-
ance from the department for
Business, Innovation and Skills,
which is overseeing the change.
The CBI’s submission to the govern-
ment emphasises the difficulty of
ending employees’ careers without a
default age. “Many firms reserve the
DRA for situations where they want
to provide a dignified exit for older
employees whose performance has
started to wane. Without the DRA,
the end of a career risks becoming a
year-long workplace dispute,” it said.
Wellstream, which makes flexible
pipes used by oil companies in deep
water, has a manufacturing facility in
Brazil. This has been a key attraction
for potential buyers because the
country is keen for locally produced
materials to be used in extracting its
billions of barrels of oil reserves.
The agreed deal, reported by the FT,
is GE’s second substantial energy sec-
tor acquisition in two months.
Wellstream refused to comment.
What women
find attractive
in stockings.
Personalised Seven
Ring Initial Bangle £97
 The Capitalist
8 CITYA.M. 13 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

ANTONIO HORTA-OSORIO: MY WIFE

MADE ME TAKE UP LLOYDS BANNER
CITY bankers were shocked last
month when Santander UK boss
Antonio Horta-Osorio jumped ship
to be parachuted into the throne of
Lloyds, replacing outgoing chief
executive Eric Daniels.
“How could he do it?” the City
wanted to know. “What possessed
him?” What, indeed? The high-flying
Portuguese charmer had to throw in
17 years’ worth of accrued pension
benefits, a wealth of goodwill and,
most observers assumed, the likely
inheritance of the global Santander
chief exec crown. And all for the
throne of a semi-nationalised,
British high-street bank.
Media and analysts started poring
over his past for similar signs of aber-
rant behaviour. But the best clue
they could come up with was in
Horta-Osorio’s leisure past-times: the
guy likes scuba-diving with sharks,
for God’s sake. Surely it was the men-
acing glare of his latest encounter
with Jaws that turned him loopy?
Actually, no.
Mingling at a Royal College of
Music charity event the incoming
Lloyds chief finally let The Capitalist
in on the secret ingredient of his
move to Lloyds and it wasn’t marine
life. It was Ana. Not Ana Patricia

Recruiting Horta-Osorio was seen as a coup for Lloyds Picture: Micha Theiner/City A.M.

Botin, his hard-nosed successor at

Santander UK, but Ana Horta-Osorio,
Antonio’s wife. Ana Horta-Osorio
knows a little about business chal-
lenges: she runs her own spa in
Lisbon from London, making the
flight to check up on it every fort-
night. It is, in Antonio’s spousal view
“the best spa in the world”.
And when the opportunity to take
over Lloyds came a’knocking, it was
Ana who urged Antonio to take up
the challenge. It seems the bank’s
shareholders – not least HRM govern- Lord Mayor Michael Bear and Robin Sherlock
ment – have a lot to thank her for.

PULLING
UNDER THE TRACKS Sometimes it feels like it’s worth it to
We might still have to wait at least say anything to avoid a six-hour
eight years for Crossrail, but com-
muters into Moorgate station have
something to be thankful for – if you
noticed it this morning. Capacity on
First Capital Connect trains has now
been increased by 3,800 seats, with
three trains doubled in length and
seven new services added. In honour
of the station’s pivotal position, one
of the new trains has been named
“City of London”.
And to celebrate this modicum of
good news for London’s harried
travellers, Lord Mayor Michael Bear
has had an unusual piece of street
art commissioned (see picture
above right). Don’t look down, Bear.
MY LEG
plane trip in cattle class. Thanks to a
new Virgin Atlantic survey of 3,000
staff, we now know what kind of
tricks passengers have tried to play
to avoid folding themselves into an
economy seat.
Requests for upgrades have come
coupled with an unusual array of
excuses, from “I’m Richard Branson’s
dentist” to “my newborn baby has
claustrophobia” and, at the check-in
desk in Tokyo: “I am a very tall
Englishman”.

BILL OF THE WEEK

EVERYONE knows that life is too

short to drink cheap wine, but not
many are quite as true to that philoso-
phy as a couple of City brokers anx-
ious to impress a couple of clients
recently at the Roux at the Landau
restaurant. They forked out £1,020
for two bottles of Montrachet and a
further £500 for a bottle of Grands
Échezeaux, the drink making up more
than three quarters of the final bill.
Fine wine demands a decent accom-
paniment, of course, and the four-
some made their way through
platters of lamb, sole, scallops and
foie gras – not to mention some lux-
urious desserts – for a total cost of
£2,003.
 Worldwide.
FX & CFD Trading. Worldwide.

Double yyour
our
FX trading po
trading wer!
power!
Open an account between now and 28 January 2011
and we’ll double your deposits* up to $100,000!

Her
Here’s
e’s ho
how
w it w
works
orks Plus, trade FX and get
Deposit Credit
Credit Trade
Trade with a cash bonus of up to
$200 + $200 = $400
*
$1,000
$100,000
+ $1,000
+ $100,000
= $2,000
= $200,000
$5,000!
3 Start trading from just $200 3 Tight spreads and fast execution

3 Receive up to $5000 credit bonus* 3 Maximum trading power (1:500)

3 Trade using MetaTrader4 3 FSA regulated and Safety of Funds

Increase of leverage may also increase your risk exposure. Forex and CFDs are leveraged products. They
may not be suitable for you as they carry a high degree of risk to your capital and you can lose more than
your initial investment. You should ensure you understand all of the risks.

*Terms and conditions apply.

alpari.co.uk/double
alpari.co.uk/double
+44 (0)20 7426 2890 Best Active
Trading Tools
Best Active
Trading Tools
Fastest Growing Best Execution
Forex Company UK House
Falcon Award for
Client Services
 V.A.T?
Non Merci!
We pay all the VAT across
the Renault range*.

AIR ALLOY BLUETOOTH MP3

CONDITIONING WHEELS CONNECTIVITY CONNECTIVITY

Take a test drive and you could win a trip to glamorous Monaco**

Visit www.renault.co.uk or Renault TV on Sky Guide 883 or Freesat 651

The official fuel consumption figures in mpg (l/100km) for the I-Music range shown are: Urban 31.0-37.2 (9.1-7.6), Extra
Urban 51.4-57.6 (5.5-4.9), Combined 41.5-47.9 (6.8-5.9). The official CO2 range is 159-139g/km. *The VAT equivalent reduction is calculated
on the basic price of the car prior to adding VAT and delivery charges. The VAT equivalent reduction is not available on vehicle options or accessories. This offer applies to new vehicles excluding Renaultsport models, Twingo GT
and Dynamique, Wind Roadster and Mégane Coupé Cabriolet ordered and registered by 31 December 2010 and is available to retail customers only. Offer not available in conjunction with any other offer. This advertisement is
provided by Renault UK Ltd, The Rivers Office Park, Denham Way, Maple Cross, Hertfordshire WD3 9YS. **For full terms and conditions of the test drive draw visit renaultterms.co.uk/taxhaven
CITYA.M. 13 DECEMBER 2010
Transfield makes
£358m takeover bid
INDUSTRIAL
▲
BY HARRY BANKS
THE AUSTRALIAN contractor
Transfield Services plans to buy
Easternwell, a well services busi-
ness, for $566m (£358m) and will
sell new shares to help fund more
than half the deal.
The acquisition of the well servic-
ing and construction firm will give
Transfield more high-value work,
the company said early today.
Easternwell works in the mining,
oil and gas and infrastructure sec-
tors, with major customers like BHP
Billiton, Chevron, Rio Tinto and
Woodside .
Transfield expects Easternwell to
BHP Billiton tried to block
Rio’s China deal, says cable
MINING
▲
BY MARION DAKERS
MINING firm BHP Billiton pres-
sured the Australian government
to prevent rival Rio Tinto teaming
up with Chinese company
Chinalco, according to a diplomatic
cable released to the Australian
media at the weekend.
The country’s then-treasurer
Wayne Swan told US diplomats
last year that BHP had lobbied the
government to delay any decision
on the $19.5bn (£12.3bn) invest-
ment, according to the Wikileaks
cable.
“BHP has been lobbying exten-
sively to block the deal, highlight-
ing concerns about Chinese
investment and the possibility that
seats on the Rio board would give
the Chinese representatives impor-
tant insights into the producer side
add more than A$40m (£25m) to
the group’s earnings before inter-
est, tax, depreciation and amortisa-
tion (EBITDA) in the six months to
June 2011 and will boost earnings
per share from the first full year.
It reiterated it expects mid-single
digit growth in net profit before
one-offs for the year to June, as long
as economic conditions do not turn
down.
Transfield plans to raise A$294m
through a 2-for-9 non-renounceable
entitlement offer priced at A$3 a
share, a 14 per cent discount to its
close last Friday, fully underwritten
by JP Morgan Chase .
The sale to institutional share-
holders is open today and tomor-
of the annual iron ore price negoti-
ations,” the cable reportedly said.
“Treasurer Wayne Swan’s chief
of staff has told us on several occa-
sions that BHP has played its cards
with consummate skill, in part due
to the increasing marginalization
of BHP CEO Marius Kloppers as BHP
chairman Don Argus has taken the
lead in lobbying.”
State-owned Chinalco blamed
Rio when its plan to buy around 18
per cent of the company collapsed
last year, claiming that disagree-
ments over board members and a
bond issue thwarted its plans.
Swan said yesterday that the
report might not be accurate,
telling reporters: “Just because
there is reportage of conversations
and they are contained in cables,
doesn’t necessarily mean those
cables are accurate, well grounded
or in context.
News 11
row, while the retail component
will close on January 12.
Transfield also said it has refi-
nanced A$915m in debt facilities,
extending maturities to between
2013 and 2015.
ANALYSIS l Transfield
A$
3.8
3.7
3.50
10 Dec
3.6
3.5
Sep 2010 Oct Nov
“Because it was a commercial
matter it wasn’t a matter that ulti-
mately came to government for
decision,” he added.
In a separate cable, diplomats
discussed claims that Rio Tinto pri-
vately gave the Chinese govern-
ment information on former staff
during a corruption investigation.
According to media reports on
the cables, Rio found small
amounts of cash on several employ-
ees that it could not vouch for, and
passed this information on to
China’s public security bureau.
The FTSE-listed company publicly
backed its staff before their convic-
tions last year, describing the alle-
gations as “wholly without
foundation”.
Several ex-Rio staff are still serv-
ing jail terms in China.
Neither company commented on
the cables.
 12 News CITYA.M. 13 DECEMBER 2010

West End Christmas

sales up on last year,
exceeding rest of UK
RETAIL Yet a return of cold weather is forecast
▲

BY JULIAN HARRIS for the coming week, causing concern

among retailers, said Howard Archer of
WEST end shops recorded a 7.6 per cent IHS Global Insight.
rise in November sales compared to last “With Christmas falling on a Saturday,
year, it was announced today. next weekend’s trading is going to be of
Promotions such as the traffic free VIP major importance to retailers,” he said.
Day (“Very Important Pedestrians”) boost- Snow and ice not only deter people
ed sales, according to retail trackers from the shops, but also cause problems
Springboard. for supply chains.
The surge was considerably above the Retailers are engaged in a battle against
relatively flat 0.7 per cent increases in the time, hoping to convince consumers to
rest of the country, they said. splash out on big ticket items before VAT
Yet John Lewis continues to perform increases to 20 per cent on 4 January.
well across the UK, drawing in a record Home improvement store B&Q is
£121m in the week to Saturday. launching its “January” sale on 17
The department store’s sales for the December, with other sales expected to
week were up 16.7 per cent on the previ- begin on or before Christmas day.
ous week, and 10 per cent on the same And consumers are increasingly turn-
time last year. ing to the internet to do their shopping.
The increase reflects a pick up in sales John Lewis recorded a huge 45 per cent
after the winter freeze thawed, resulting increase in online sales last week, com-
in more people heading to the shops. pared to the previous year.
Traders are hopeful that consumer confidence is slowly returning Picture: REUTERS

A language they’ll remember.

Retailers expect a
A gift they’ll never forget. merrier Christmas
RETAIL However, eight out of ten expect their economic worries but ulti-
▲

The gift that gets everybody talking this Christmas. BY JOHN DUNNE
Language learning with Rosetta Stone. RETAILERS are expecting a more
prosperous Christmas than last
year – fuelled by shoppers buying
Our unique software activates the natural language- goods ahead of the looming VAT
learning ability we all have. By replicating the way hike in January.
Almost two thirds of traders said
we learnt our first language, learning becomes they expected sales to be at least
fun through engaging, interactive activities that the same or better than last year,
encourage you to think in a new language. You according to a survey by the British
Retail Consortium (BRC).
will speak, read and write your new language Stores are stepping up their dis-
with confidence from the beginning. All counting with 41 per cent offering
without translation or memorisation. more than last year.
Seventy one per cent of retailers
think the January rise in VAT to 20
With over 30 languages available, per cent means customers are
bringing forward purchases.
there is a gift for everyone.
the VAT change to have a negative
impact on sales in January, the
Christmas trading survey found.
British Retail Consortium direc-
tor general Stephen Roberston said:
“It’s reassuring to see a majority of
retailers believe Christmas sales
will be at least as good as last year
even if a third say they will be
worse.
“But, considering inflation is
now at 3.2 per cent, growth of any-
thing less then that would be a
real-terms fall.
“Promotions have hit a new level
of intensity, retailers believe the
next VAT rise is bringing sales for-
ward and Christmas is usually a
time when people spend despite
mately December could prove to be
the ninth month in a row of weak
year-on-year growth.”
Those surveyed were also asked
what impact they felt when VAT
was restored to 17.5 per cent in
January this year, after being
reduced in an attempt to breathe
new life into high street sales after
the finacial crisis took its toll on
consumers.
A total of 18 per cent said sales
went down while 64 per cent said
they had seen no impact.
The survey – of 17 major retailers
covering 51 per cent of the UK’s
retail turnover – was conducted
between 22 November and 1
December 2010.

ONE DAY SALE ANALYST VIEWS: WILL THE FESTIVE PERIOD KICKSTART SALES
ENDS 14th DECEMBER 2010 AND HELP CONFIDENCE RETURN TO RETAIL ? Interviews by John Dunne

HOWARD ARCHER | STEPHEN ROBERTSON |

<7;6‰6-- IHS GLOBAL INSIGHT BRITISH RETAIL CONSORTIUM

“ “
PLUS FREE DELIVERY
Things are improving slightly It is reassuring to see a
Call: 0800 005 1311 but there is still a lot of caution. majority of retailers believe Christmas
RosettaStone.co.uk/AM Wage rises have fallen behind infla- sales will be at least as good as last
tion and there is still the impact of year, even if a third say they will be

”
QUOTE ‘AM’

”
government cuts to be fully worse.
felt next year.
GERARD LANE | SHORE CAPITAL

©2010 Rosetta Stone Ltd. All rights reserved. Patent rights pending. Offer cannot be combined with any other offer. *£100 off SRP when you buy Level 1, 2, 3, 4 & 5

“ Consumers are benefiting from a pick up in employment and have not yet seen the
squeeze on the pocket of tax increases. The private sector job creation is starting to rise. The
winter weather may prove temporary. For retailers facing top end consumers, low inter-

”
Personal Edition box set direct from Rosetta Stone. Plus free standard P&P within the UK. Offer expires 14th December 2010, 12:01 a.m. Prices are subject to change
without notice. Six-month money-back offer is limited to product purchase made directly from Rosetta Stone and does not include return P&P. This offer does not
apply to Rosetta Stone Online or Audio Companion™ purchased separately from the software product. All materials included with the product at the time of purchase
must be returned together and undamaged to be eligible for any exchange or refund. est rates and higher asset prices may have seen a return in retail sector confidence.
 ”With Zurich’s help we’ve
prevented over 24,000 lost
work days. Because, like us,
they believe one injured
colleague is one too many.”
Robert Milligan, TRW Automotive,
Director of Risk Management

Business insurance that protects your most valuable assets.

Your people.
We’ve been an insurance partner of TRW Automotive, one of the world’s leading
automotive safety system suppliers, since the 1970s. We’re always looking for new ways
of helping them and their employees, and today this includes accident prevention and
rehabilitation services. Between 2004 and 2010, this partnership has helped prevent the
loss of over £ 6.4 m worth of man-hours for TRW Automotive. It’s an example of how
Zurich HelpPoint delivers the help businesses need when it matters most. To learn more
about how Zurich can help you, speak to your broker or visit www.zurich.co.uk/expertise

Zurich Insurance plc, a public limited company incorporated in Ireland Registration No. 13460. Registered Office: Zurich House, Ballsbridge Park, Dublin 4, Ireland. UK branch registered in England and
Wales Registration No. BR7985. UK Branch Head Office: The Zurich Centre, 3000 Parkway, Whiteley, Fareham, Hampshire PO15 7JZ.
 14 News
ITV rakes in £25m
from X Factor final
MEDIA
▲
BY STEVE DINNEEN
MATT Cardle may have lifted the X
Factor crown last night but ITV was
the real winner, hitting an advertis-
ing jackpot of £25m.
An estimated 20m people tuned
in to watch the final of Simon
Cowell’s talent show, with ITV
charging close to £250,000 for a 30
second advertising slot.
Firms including Lloyds Banking
Group, Chanel and Sainsbury’s
bought the premium slots.
The last entertainment show to
hit the elusive 20m audience figure
was the Christmas come-back
episode of Only Fools and Horses
An estimated 20m
viewers tuned in
to see Cheryl Cole
and her fellow
judges last night
Picture: PA
and Cowell’s achievement is all the
more impressive given the fragmen-
tation of TV audiences in recent
years.
The final of the most popular
ever X Factor series comes just a
week after the 50th anniversary of
its smash-hit soap opera Coronation
Street. To mark the occasion the
show’s bosses crashed a tram into
the street, drawing in 14m viewers
and persuading advertisers to hand
over £100,000 for a 30 second slot.
ITV executives have been quick to
play down the significance of the
bumper period, calling it a “good
start” but saying there is plenty of
work to be done before the station is
back on firm ground. Its advertising
CITYA.M. 13 DECEMBER 2010
Now is not the time to buy
ITV cashed in this weekend on
what has become one of the
biggest UK television events of the
year, reportedly bagging £25m in
advertising revenues from the X
Factor final.
But does the reality TV boost
mean that investors should be rush-
ing to scoop up the firm’s shares?
Its stock has climbed to over 73p –
above even its April highs after the
hiring of new CEO Adam Crozier. It
now trades at a 11.7 times price-to-
earnings ratio – only marginally
below its sector average.
The channel’s recovery also looks
to be on fairly solid footing: the
numbers for this year were a vast
improvement on last, with pre-tax
profit jumping from a £105m loss
for the first half of last year to a
£97m gain for the same period this
year. Earnings per share for the
same period recovered from a 1.8p
loss to a positive 1.8p (unadjusted).
But even so, there are likely to be
hiccups along the way, which
means that there will probably be
better opportunities to pick up
stock than in the wake of ITV’s X
Factor moment.
BOTTOMLINE
Analysis by Juliet Samuel
revenues have jumped 14 per cent
this year but dropped nine per cent
the year before. Chief executive
Adam Crozier is attempting to
reduce the firm’s reliance on core
advertising.
ANALYSIS l ITV 73.00
75
p
10 Dec
70
65
60
13 Sep 1 Oct 21 Oct 10 Nov 30 Nov
CITYA.M. 13 DECEMBER 2010
Tight credit
holding back
UK recovery
▲
UK ECONOMY
BY JULIAN HARRIS
LENDING remains too low and is
“holding back the economic recov-
ery,” the Bank of England said today.
The news comes after the Bank
reported that mortgage approvals fell
for six successive months to October.
Tight credit conditions continue to
hold back recovery in the housing
market, analysts say.
Yet banks are ahead of schedule in
repaying the loans given to improve
their liquidity, according to the
Bank’s quarterly report, released
today.
The report revealed that £75bn of
the £185bn loaned to banks was
repaid by the end of November. In
September £57bn had been repaid.
The Special Liquidity Scheme (SLS)
was launched in April 2008 and
expires in January 2012, with the
Bank insisting that it will not be
extended or replaced.
After three years of support “each
institution should be in a position to
fund itself through normal market
mechanisms,” said the Bank’s Paul
Fisher, who also sits on the Monetary
Policy Committee (MPC).
Slump mirrors Cuts and taxes
other recessions still a concern
▲
UK ECONOMY
THE global economic slowdown is
similar to previous recessions, the
Bank of England said in its quarterly
report released today.
And exchange rate depreciations,
as seen in the recent slump, have
helped economies recover, it added.
Financial crises affected recessions
in the 18th and 19th centuries, while
international financial crises have
often impacted the UK, particular
after periods of globalisation.
The comparison, provided to offer
context for the current economic
troubles, shows the recovery avoiding
a 1930s style double dip.
News 15
Structural reform
Mortgage
approvals remain
low, while negative
equity still haunts
over four per cent
needed, says Bank
of households.
Picture: Bloomberg
ANALYSIS l Proportion of
mortgage holders in negative equity
10
Percentage of mortgage holders
Banking and Financial Stability Board
▲
BANKING
BY JULIAN HARRIS has been tasked with looking into
possible reforms.
TOO big to fail banking institutions Three of UK’s largest banks have
5 are “a paradox that must be tackled,” assets in excess of annual GDP, the
the Bank of England said today in its report says.
final quarterly report of the year. “Too important to fail banks may
The “social costs” of failure amid be subject to less market discipline,
large global banks have led to consid- and are likely to grow more rapidly
2007 2008 2009 2010
erations of structural reform, the and become more dependent on debt
Year Bank said. funding – and more highly intercon-
The Independent Commission on nected and leveraged,” they said.
Banks are expected to reduce their
use of the loans in “a smooth fash-
ion,” to avoid a funding crisis in the
final months of the loan this time
next year.
Yet lending, particularly to small
business and individuals, “has
remained subdued even as economic
activity has begun to recover,” today’s
report states.
And low rates of lending are more
due to tight credit conditions than a
reluctance from businesses and
households to borrow, it says.
“Weak lending is more likely to
dampen the recovery than weak
demand,” it says.
Confidence in the availability of
credit has taken a hammering,
according to survey conducted for the
Bank in September.
Compared to last year, an extra five
per cent of people were concerned
about the situation. More than one in
five people were worried about being
denied credit, the survey said.
The “persistent tightening in credit
supply” is one of the main policy
NEW
issues facing the UK, the report says.
“The Bank will continue to monitor YOUR TICKET INCLUDES:
developments in bank lending and • Entry to The Club from 8pm
the banking sector closely.”
YEAR’S
• A mini bottle of Moët
Champagne
• A selection of complimentary
EVE 20 10
cocktails, drinks from the bar
and welcome canapés until 9pm
• Live music in the Marquee
• Complimentary snack from
the BBQ
Escape the crowds in central London and • Three of London’s top DJs in
UK ECONOMY
the Clubhouse
THE fiscal austerity measures are a make New Year’s Eve 2010 one to remember
• Breakfast nibbles between
concern for most households, yet peo-
ple are reluctant to actively respond
with a private fireworks display at midnight. 3am and 4am!
to the tougher times, it was revealed
yesterday.
In a survey conducted for the Bank
of England, the “vast majority” were TICKETS ARE £125 (£115 FOR MEMBERS) AND ARE AVAILABLE ONLINE.
concerned about higher taxes and
government cuts. Just 10 per cent
said they will be unaffected.
Yet only 18 per cent say they will
The Roof Gardens 99 Kensington High Street, London W8 5SA
save more money, and only 14 per
cent are working longer hours. www.roofgardens.virgin.com/cluboffers
Government sector workers were E: victoria.l@roofgardens.virgin.com • T: 0207 368 3960
equally unlikely to respond, despite
being vulnerable to the cutbacks.
 16 News
NEWS | IN BRIEF
PwC accused of Iceland failure
PwC has been accused of failing to spot
weaknesses in the Icelandic banking
sector on numerous occasion before it
imploded in 2008. Collapsed lenders
were found by the Icelandic special
prosecutor to have been involved in
largescale irregular financial activities,
including overstating their financial sta-
bility. The investigators said PwC should
have noticed the erroneous announce-
ments.
Orchid invests £3.6m in Sky 3D
The Orchid Group yesterday announced
it will invest £3.6m upgrading all of its
TV content to Sky 3D and Sky+HD. The
move will see the technology installed in
all 300 of its premises, which include
Bar Room Bar, The Oriental Restaurant
Group and The Living Room. Rufus Hall,
chief executive of The Orchid Group said:
“We have trialled Sky+HD and Sky 3D
sports in both our drink and food led
businesses and the results show this is
what our customers want.”
Narnia film claims shaky win
The third movie in the shaky Narnia fan-
tasy franchise took the top spot at the
worldwide box office yesterday despite
a soft start in North America. The
Chronicles of Narnia: The Voyage of the
Dawn Treader sold $105.5m (£66.8m)
worth of tickets globally, distributor
20th Century Fox said.
Need
money
before
Christmas?
borro can lend you
from £1,000 to £1 million,
secured on your assets.
borro Premier can arrange a short term loan
in 24 hours, with no credit checks, secured
against assets such as jewellery, luxury
watches, Gold, Fine Art, Antiques, Sculptures,
Luxury Cars and Yachts.
On average, our valuations and loans will be
twice as much* as other lenders, and at
much lower interest rates.
For a FREE
expert valuation
visit:
Chancery House,
53-64 Chancery Lane,
London, WC2A 1QU.
9am-4pm, Monday to Friday
No appointment necessary
Or to arrange a home visit
Call: 0800 014 8198
Or visit: borro.com/cityam
*Source: MSS Market Research, September 2010.Terms & Conditions: Applicants must be over 18. Apply via
borro.com/cityam, or quote ‘City AM’ for the offer to apply. For full terms & conditions see borro.com/cityam
ALL CHANGE FOR FRIENDS PROVIDENT
Carlyle Group will
take control of
Fairfield Partnership
HOUSING
▲
BY STEVE DINNEEN
CARLYLE Group plans to take a con-
trolling stake in Fairfield Partnership,
the regional housing developer that
owns more than 1,000 sites in
Cambridgeshire and Hertfordshire.
The US private equity giant will pay
an initial £17m, rising to £40m after
an agreed investment of capital.
It will buy the stake from Fairview
New Homes, which jointly owns the
firm with Marchfield Developments.
Marchfield will retain a 20 per cent
stake in the firm.
Carlyle Group declined to comment
last night. Fairfield Partnership were
unavailable for comment.
Insurance firm Friends Provident is set to move into new offices above the One New Fairfield works with landowners to
Change shopping centre next year, sources confirmed yesterday. The company is set to develop greenfield and brownfield
take around 50,000 square feet of space for £52.50 per square foot at the new develop- sites, either leasing or buying the land
ment. Developer Land Securities declined to comment. Picture: Micha Theiner/City A.M. and promoting it for sale.
Goldman loses trio
of its key bankers
BANKING enues in the division, with sales
▲
BY STEVE DINNEEN falling 32 per cent so far this year.
It is also understood that the clo-
AT LEAST three members of sure of its prop trading division,
Goldman Sachs’ London equities located within the equities team,
team will retire from the firm. in response to new legislation,
One Head of the principal strategic could be a consideration when
Month investment group Phillip Hylander
will step down at the end of the
deciding whether to replace the
trio.
Interest year to become an advisory direc- The bank has already drafted in
Free tor to the bank. Brian Levine, chief operating offi-
Joining Hylander out of the cer of its London-based One Delta
revolving door will be Matthew business, from New York, who
Cyzer, who heads up the sales trad-
ing operation in Europe and his
counterpart in the trading division It is unclear whether
John Ashdown, who are both retir- the bank, headed by
ing. Lloyd Blankfein, will
It is not clear if the bank plans directly replace the
on directly replacing the key fig-
ures. It has been hit by falling rev-
retiring bankers
L’Occitane majority shareholder
cashes in £86m worth of its shares
▲
HEALTH & BEAUTY per cent after selling 50m shares in
L’Occitane.
L’OCCITANE International said its Half of the 364m shares offered
controlling shareholder has sold in a $708m IPO in April were sold by
$136m (£86m) worth of its shares at LOG, at HK$15.08 each. CLSA, HSBC
HK$21.14 (£1.72) each, or a 1.9 per and UBS were the placing agents.
cent discount to Friday’s closing L’Occitane, which manufactures
P R E M I E R price, in a share placement. products including almond and
The French skincare products olive-based creams, was the first
retailer said the share sale allowed French company to list in Hong
its controlling shareholder, the Kong and the second, non-Asian
L’Occitane Groupe (LOG), to mone- business to list there, behind
tise a small portion of its invest- Russia’s Rusal.
ment in the business. The firm recently announced a
LOG’s stake in L’Occitane tie-in deal with Royal Mail to trial
decreased to 69.2 per cent from 72.6 evening deliveries of its products.
CITYA.M. 13 DECEMBER 2010
The acquisition will be seen as a pos-
itive reflection on the state of the UK
housing market just days after it
recorded its first annual decline in a
year.
The three months to November, fell
0.7 per cent compared with a year
ago – the first decline on this measure
since November 2009.
That compared with gains of 1.8 per
cent on the month and a three-month
annual rise of 1.2 per cent in October.
Analysts say the figures reinforce
the view that house prices will remain
soft in 2011.
The acquisition by
William Conway’s
Carlyle Group is seen as
a vote of confidence in
the UK housing market
oversees most of its equities opera-
tions.
Last month Goldman released
the names of 110 of its staff who
have been promoted to partner.
The number promoted is around
10 per cent higher than the average
and the highest since 2006. Just 94
employees were promoted to part-
ner in 2008, the last intake.
The total number of partners is
believed to have grown, with only
60 leaving the bank since the last
count, although Goldman closely
guards the exact figure.
Around 26 per cent, a higher pro-
portion than usual, are based in
Asia, with only 45 per cent of the
partnerships being awarded in
North and South America. A fur-
ther 29 per cent are from Europe.
London homes within the M25
motorway will be eligible for the
new same-day service.
ANALYSIS l L’Occitane
25 $ 21.50
10 Dec
23
21
19
13 Sep 1 Oct 21 Oct 10 Nov 30 Nov
CITYA.M. 13 DECEMBER 2010 News 17

EU bonus rules make London uncompetitive

each of the 27 Member States.
These laws will be amongst the
most restrictive in the world – limit-
ing cash bonuses, imposing a deferral
period on the payment of bonuses
and, most controversially, allowing
money to be taken back retrospective-
ly when decisions taken are judged to
have caused losses.
MAYOR’S COMMENT The motives behind such measures
MICHAEL BEAR appear laudable; as with regulation,
the EU’s policy makers are trying to
minimise excessive risk taking within
the public – at home and overseas.
Faced with anger amongst the elec-
torate and sensationalist headlines in
the press, politicians clearly feel they
need to be seen to be taking action,
and bonuses are an easy target.
But once again, political expedien-
cy is placing our future international
competitiveness at risk. Other finan-
cial centres – particularly those in
America and the Far East – have no
intention of restricting the way in
which their financial institutions can
the global marketplace?
It is also worth remembering that
the payment of bonuses – or indeed
the way they were structured – did
not cause the financial crisis.
By restricting remuneration prac-
tices, financial institutions in the EU
are being placed in an invidious posi-
tion. Most of these institutions want
to be based here but, in order to do so,
many are now considering increasing
basic salaries in exchange for shrink-
ing their bonus pools.
salaries forces financial institutions
into increased spending commit-
ments that must be honoured even
when performance is poor.
The unintended – or I hope they
are unintended – consequences are
clear for all to see.
We are faced with a situation
whereby a proposal designed to
increase security within the financial
marketplace could result in a huge
loss of revenues for EU governments
as financial institutions take their

L
ast Friday, the EU outlined its lat-
est proposals governing the pay-
ment of bonuses that will
eventually be enacted as law in
the financial services industry. pay their staff. This is a course of action we should business elsewhere or it could result
Understandably, bonuses of the Of course London will remain the endeavour to avoid. Bonuses, when in financial institutions engaging in
scale we are used to reading about in financial capital of Europe but what used properly, are a sensible form of even riskier practices.
our newspapers are unpopular with good is that if we cannot compete in remuneration whilst raising basic Michael Bear is the Lord Mayor of London

Davies report
to shy away
from quotas possibilities that are being discussed.
▲

POLITICS However, quotas are a last resort,” the

BY MARION DAKERS
THE DEPARTMENT for Business,
Innovation and Skills insisted yester-
day that its review into women on
company boards will only push for a
mandatory quota system as a last
resort.
Lord Davies’ review into board-
room diversity could instead recom-
mend an internship scheme to
encourage a wider range of people to
take up directorships, a spokesperson
said yesterday.
Mervyn Davies, the former chief
executive of Standard Chartered and
trade minister under Labour, is con-
sulting with City players over plans to
demystify the boardroom and encour-
age more women to take top roles.
A spokesperson for the Department
of Business, Innovation and Skills,
which is overseeing the review, said
Lord Davies was not currently plan-
ning to impose a quota of women on
boardrooms and would prefer a vol-
untary system to encourage more
women into executive roles.
“It’s difficult to say what measures
will be involved, and there are lots of
spokesperson said.
Davies’ team is consulting with
head-hunters, FTSE-listed companies
and their board members to explore
ways to get a broader mix of people
into the top jobs.
The review has received more than
2,600 responses to its call for evi-
dence, which closed on 2 December.
It is expected to report its recommen-
dations in February.
Lord Davies of Abersoch said at the
launch of the review in August:
“While it is essential that the boards
of UK companies are meritocratic, the
fact that there are only 131 female
directors in FTSE 100 companies
means that we cannot be using all
the skills and talents that make our
workforce so competitive.”
Recent research by Cranfield
School of Management showed that
12.5 per cent of directors in the FTSE
100 are women.
There are 18 female executive direc-
tors – which is only 5.5 per cent of the
total.
More than one in five FTSE 100
companies have all-male boards, the
research showed.

Saudis keen to Unite opposes

hold oil at $70 De La Rue sale
▲

COMMODITIES FINANCIAL SERVICES

LEADING Opec producer Saudi Arabia
said this weekend it still favoured a
$70 (£44.27) to $80 price range for oil,
extending a two year policy of price
control.
The statement by Saudi Oil minis-
ter Ali al-Naimi at an Opec meeting
on Saturday will come as a relief to
consumer nations in the West, wor-
ried that rising oil prices could get
out of control and hurt the global
economic recovery.
His comments came as Opec
agreed to keep production restraints
unchanged, despite a recent surge in
crude prices to $90 a barrel.
UNITE the union said it was drawing
up plans to defend the world’s biggest
currency printer De La Rue this week-
end from a renewed takeover bid
from French rival Oberthur
Technologies.
Last week, De La Rue admitted it
had received an offer of £900m from
the French printing firm but said it
had almost immediately rejected the
offer.
However, Unite said this weekend it
would consult its members at De La
Rue over possible industrial action if
approaches from Oberthur turned
into a more formal offer.
 18 News
All-round positive outlook for 2011 worrying
the futures and options expire and
we all settle in to the two-week lull
before P&Ls go back to zero and we all
have to start again.
So as we kick back and look for-
ward to the seasonal re-run of The
Italian Job, tins of Quality Street in
the office and thrashing the Aussies
CNBC COMMENT in the Third Test, what market joys
STEVE SEDGWICK will 2011 bring us?
No doubt the big themes of 2010
will once again dominate and contin-
T
his is it – the last meaningful ue to fray the nerves. Sovereign debt
trading week of the year. This woes, Chinese economic bubbles and
is the final opportunity for US Government balance sheets will
anyone wanting to move be high on the list of worries as ever
around a decent amount of stock or but, let’s face it, we rallied on equity
trying to place an order without send- markets this year with acute con-
ing prices haywire. The week when cerns on all these fronts. So why not
Obama to talk
to US bosses
on economy
US POLITICS
▲
tax code and cutting the budget
BY MATTHEW WEST deficit as well as discussions over pro-
US President Barack Obama will hold viding “a balanced approach to regu-
a one-day summit of chief executives lations.”
on Wednesday as part of a renewed The meeting will be held in private
effort by the White House to build in contrast with some previous White
support from among business leaders House meetings involving business
for his economic agenda. leaders. It is expected that holding
The administration expects bosses the meeting in private will allow busi-
from Google, Cisco Systems, ness leaders to speak more candidly
International Business Machines, than the have felt able to in previous
American Express, Dow Chemical more public meetings.
and Pepsico to attend the meeting to While Obama has met with chief
discuss trade, tax, regulatory issues executives since the start of his
and the deficit. administration some have com-
The Obama administration wants plained he has ignored their views.
to persuade US firms to release some Business leaders have also expressed
of the $1.93 trillion (£1.22 trillion) in concern at the President’s occasional
cash and other liquid assets they are sharp criticism of multi-national
thought to be hording. companies, and his administration's
The Federal Reserve said last week regulatory and tax policies.
that cash as a share of total assets is at
the highest level it has been in a half- President Obama will
century. President Obama is keen for
America’s biggest companies to invest meet business leaders
that money in expansion and job cre- on Wednesday to dis-
ation. cuss economic policy
The summit will include substan- issues.
tial discussions on overhauling the
CITY MOVES | WHO’S SWITCHING JOBS
Lee Overlay Partners
Philip Lawson (pictured) has rejoined Lee
Overlay, the global active currency managers.
Lawson has been appointed as a portfolio man-
ager and will be responsible for investment
decisions related to client portfolios. He brings
with him 18 years of currency experience, most
recently working for Barclays Global Investors,
working in the client solutions group. He left
Lee Overlay Partners in 2006 after six years in
trading and portfolio management.
HSBC He moves up from his position as head of
HSBC has named Samir Assaf as chief global markets and succeeds Stuart
executive of global banking and markets. Gulliver, whose promotion to group chief
To appear in CITYMOVES please email your career
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
updates and pictures to citymoves@cityam.com
next year?
The analysts, and this may be a
worry to many of you and to the ana-
lysts themselves, seem to be in accord.
In accord that stocks and shares can
rally nicely regardless of macro issues.
“We forecast a 13 per cent gain for
European equities in 2011,” say the
European strategy chaps over at
Nomura.
The Credit Suisse team agree: “We
forecast a 13 per cent rise in the glob-
al markets in 2011.”
And over at Goldman Sachs? “Our
portfolio strategy team’s end-2011
index targets envisage 14-29 per cent
returns across the major equity mar-
kets…”
So far in 2010 the FTSE 100 has pro-
BEST OF THE BROKERS
ANALYSIS l Imperial Tobacco Group
2,100 p
1,898.00
10 Dec
2,000
1,900
13 Sep 1 Oct 21 Oct 10 Nov 30 Nov
IMPERIAL TOBACCO
RBS rates the cigarette manufacturer a “buy” fol-
lowing the announcement of price increases. It
notes that this should more than offset the impact
of increased excise rates in Spain. Imperial’s profit
pool should remain largely unchanged from FY10
and continued cost savings should allow the group
to deliver marginal profit growth. The broker notes
that its investment case remains intact and reiter-
ates its £23.80 target price.
ACS keen to start talks with Hochtief
M&A
▲
SPANISH construction company ACS
said yesterday it hoped to start talks
with Hochtief as soon as possible
after its German rival said it was open
for dialogue.
ACS has not sat down for talks with
Hochtief despite launching a formal
bid for control of Hochtief on 1
December.
“We welcome that Hochtief
Edited by Martin Williams
executive was announced in November.
Assaf will be reporting to Gulliver and,
through his promotion, will become one
of the overall group’s managing directors
and will join HSBC management board
in January.
Assaf has appointed a new leadership
team in his division, which will expand to
include global capital financing. Jose-
Luis Guerrero and Spencer Lake are to
be the new co-heads of global markets
while the new co-heads for global bank-
ing will be Robin Phillips and Kevin
Adeson.
CSF Group
The data facility and service provider,
duced a respectable rally of around 7
per cent, and an uptick of over 20 per
cent from the July wobble. The argu-
ment for a continuation of the rally
in the UK and across equities general-
ly is based on several assumptions.
HSBC sees UK earnings growth of
16 per cent in 2011. Nomura points to
a more proactive deployment of cash
flows with CEOs likely to increase
organic investment as well as M&A.
Nomura’s Ian Scott adds: “Crucially
the market is starting to give the
green light to more proactive uses of
company cash flows.”
Elsewhere, Goldman says a combi-
nation of better-than-expected
growth and moderate inflation at a
global level will be positive for risky
ANALYSIS l Avocet Mining
240 p 222.75
10 Dec
200
160
13 Sep 1 Oct 21 Oct 10 Nov 30 Nov
AVOCET MINING
Evolution Securities retains its rating of the gold
mining company as “neutral”, with exploration in
West Africa key. It notes that Avocet is worth less
with the likely sale of southeast Asian assets and
sets a target price of 225p/200p. But, the broker
says that the potential success from the drilling
programme next year could replace the company’s
lost ounces.
To appear in Best of the Brokers email your research to notes@cityam.com
responds positively to our offer for
talks which we have made several
times over the past couple of
months,” a spokeswoman for ACS
said yesterday.
“We expect talks to begin as soon
as possible. It will be crucial for both
parties to treat the talks with utmost
confidentiality.”
Asked whether there is a date for
talks, a Hochtief spokeswoman said,
“We are currently concentrating on
in association with
CSF Group has appointed Richard King
as non-executive director. He brings with
him 35 years’ experience working with
growing businesses and joins from Ernst
& Young, where he was deputy manag-
ing partner of UK and Ireland. He is also
a fellow of the Institute of Chartered
Accountants and the chair of trustees
for the Willow Foundation charity for
the seriously ill.
Pension Corporation
The risk management solutions provider
has hired Jim Collins as chief actuary.
Collins will draw on nearly 25 years
experience as an actuary to take respon-
sibility for the continued growth and
CITYA.M. 13 DECEMBER 2010
assets. GS though believes the great-
est risk to the positive scenario comes
from the post-crisis fiscal overhang.
So there you have it. One very
unscientific sampling of 2011 expec-
tations. One straw poll which clearly
points to a bullish outlook for equi-
ties despite the questionable econom-
ic fundamentals.
I for one am heartened people are
looking on the bright side. I just wish
it wasn’t across the board positivity.
Markets have a nasty habit of making
us all look a little stupid every time
we get carried away. Anyone remem-
ber Marconi circa 2000?
Steve Sedgwick is a presenter on Squawk
Box Europe each weekday morning on
CNBC. http://europe.cnbc.com
ANALYSIS l BAE System
370 p
330.40
10 Dec
350
330
13 Sep 1 Oct 21 Oct 10 Nov 30 Nov
BAE SYSTEMS
Execution Noble reiterates its “buy” rating, with
shares falling by 19 per cent since October.
BAE’s P/E discount versus the US peers has
widened to 160 basis points. The broker says that
recent beneficial moves in BAE’s pension discount
rate, and the possibility of near term closing of the
Platform Solutions disposal makes the discount
excessive.
our [regulatory] statement to share-
holders.”
As part of German takeover rules,
the management and supervisory
board must make a formal recom-
mendation to shareholders whether
or not to accept a takeover offer. A
statement is expected this week.
Hochtief said this weekend it does
not regard the takeover bid by ACS as
hostile and will agree to talks with
them “as a shareholder”.
development of Pension Corporation’s
actuarial capabilities. He will also be
responsible for the implementation of
the forthcoming solvency II framework.
He moves from Towers Watson, where
he was a senior consultant.
Simmons and Simmons
The international law firm has promoted
Jeremy Holland to be its managing part-
ner, following a vote by its partnership.
Holland replaces Mark Dawkins, who has
served in the role for six years. Hunt has
held numerous management roles since
becoming a partner in 1997 and was
made head of the firm’s financial institu-
tions sector in 2005.
+44 (0)20 7557 7245
morganmckinley.com
CITYA.M. 13 DECEMBER 2010
China hints at rates increase
▲
ASIA
BY JULIAN HARRIS
CHINA may increase interest rates,
after state media yesterday confirmed
that more “prudent” monetary con-
trols would replace the previous
“appropriately loose” policy.
“Strategic economic restructuring
will be accelerated and stabilising
price levels will be given a more
prominent position,” state media
reported at the end of yesterday’s
Central Economic Work Conference
in Beijing.
Consumer prices rose by 5.1 per
cent in November compared to the
Hands to lose
control of EMI
by Christmas
▲
MEDIA
BY MATTHEW WEST
TERRA Firma boss Guy Hands is
expected to lose control of troubled
record label EMI before Christmas fol-
lowing his bitter dispute with his
bank Citigroup.
Hands has begun telling his private
equity firm’s backers to expect the
worst as a result of negotiations over
control of the record label, which has
£2.5bn worth of debt owned by Citi
and which has halved in value since
he bought it.
Citi is expected to write off most of
EMI’s debts in exchange for control of
the company, which counts Coldplay,
Lilly Allen and Kylie among the acts
on its label. Under the proposals put
forward by Citi, Terra Firma would
keep a small stake in EMI but would
lose operational control, leaving the
bank able to conduct a quick asset
sale in the new year. Private equity
firm KKR and Warner Music are
thought to be circling with KKR keen
to take EMI’S publishing business and
Warner keen on its recorded music
business.
Last month, Hands lost a court case
in New York in which he claimed one
of Citigroup’s most senior bankers,
No interest in bid for Prudential’s Far Hong Kong secures top
East assets, says new AIA chief Tucker spot in the IPO league
▲
INSURANCE
BY MATTHEW WEST
MARK Tucker, the new chief execu-
tive of Asian insurance business AIA
said this weekend the company has
no interest in making a bid for
Prudential’s Far East assets, ending
speculation about a multi-billion
pound take over battle.
AIA is focused on organic growth
and is looking at tactical opportuni-
ties rather than a major acquisition,
he told the Sunday Telegraph.
previous year, the sharpest rise since
July 2008.
And earlier this month the govern-
ment was forced to admit that they
may revise up their target rate to four
per cent, from the current three per
cent target.
Last week the People’s Bank of
China (PBoC) increased the reserve
requirement ratio (RRR) for banks for
the sixth time this year, and the third
time in the last five weeks.
The hike further increases the
amount of funds that lenders must
keep in reserve, impounding around
RMB350bn (£33.3bn) at the central
bank, according to analysts at
David Wormsley, had tricked him
into overpaying for the record label in
2007 by suggesting rival private equi-
ty firm Cerberus Capital was placing
a bid for EMI, which was higher than
Hands’ original offer.
In the end, Hands alleged, Terra
Firna was convinced to up its bid to
265p per share valuing EMI at £4bn.
However, much of that money was
raised through a loan from Citi and
when the record label began to run
into difficulties Hands tried to rene-
gotiate the terms of the loan. Having
failed, he then took his bank to court
to try to prove he had paid too much
in the first place.
A spokesman for Terra Firma
refused to comment on the current
state of the negotiations only con-
firming that they had been taking
place since Hands lost the court case.
Terra Firma has already written off
£1.7bn in equity, which it committed
to EMI when it bought the record
label three years ago. Citi, mean-
while, has halved the value of the
loan on its books.
EMI is expectd to pass a covenant
test at the end of December but Terra
Firma would have to invest a further
£200m to retain control of the record
label after June 2011.
AIA was the subject of a takeover
bid from Prudential, which collapsed
in the summer after shareholders
raised concerns that the $35bn
(£22.14bn) bid for the firm was too
high.
Prudential’s chief executive
Tidjane Thiam has said privately that
he launched the takeover bid for AIA
because he feared a takeover offer
from the former AIG division if it suc-
cessful floated on the Hong Kong
stock market, something it achieved
last month. AIA is now valued at
Barclays Capital Research.
The anlaysts forecast three policy
rate hikes of 0.25 per cent each
between now and mid 2011.
From 20 December, the RRR for
large banks will increase to a record
18.5 per cent, with smaller banks
required to deposit 16.5 per cent.
FAST FACTS | CHINESE INFLATION
● November’s inflation of 5.1 per cent is up
from 4 .4 per cent in October.
● In November food inflation hit 11.7 per cent.
● Non food inflation increased from 1.6 per
cent in October to 1.9 per cent.
Chris Martin of Coldplay, one of EMI’s success stories
$35bn, exactly what the Pru had
offered for the firm earlier this year.
ANALYSIS l AIA Group
25
HKD 22.25
10 Dec
23
21
Nov 2 Dec
Twitter looks for office
space in central London
▲
TECHNOLOGY
SOCIAL networking firm Twitter has
sent a team to London to look at
offices near the “silicon roundabout”
on Old Street, it emerged yesterday.
Executives from the California-
based company have also scoped out
office space in the West End as part of
Twitter’s plan to open a hub in
Europe.
Twitter has been searching for a
European headquarters for several
months, and hopes to open the new
Picture: REX
▲
CAPITAL MARKETS
HONG Kong is set to claim top spot as
the world’s hottest IPO market this
year, raising over $51bn (£32.3bn), but
observers say the city’s bourse must
shrink its heavy reliance on China.
Analysts say improvements in
Shanghai's regulation make it a
strong rival to Hong Kong.
The financial hub was far outpac-
ing New York, Shenzhen and
Shanghai by early December, accord-
ing to figures from Dealogic. It is the
News 19
hub next year. The firm has expanded
its advertising efforts in recent
months as the number of users on
the site continues to mushroom.
East London will receive £400m in
government funding to help create a
technology hub in the run-up to the
Olympics, Prime Minister David
Cameron announced last month.
Twitter did not respond to requests
for comment yesterday. The firm has
previously confirmed its plan to get
“a small number of people on the
ground in Europe in 2011”.
Copper firm
raises £40m
in AIM listing
▲
MINING
COPPER Development Corporation
has today been admitted to the AIM
market after raising £40m to develop
its copper mining project.
The company is sitting on an esti-
mated 725,000 tonnes of copper in
Indonesia, with prices of the metal
currently at an all-time high.
Calculations suggest the current
value of its mines in that region is
US$485m (£307m), with the price of
copper standing at US$4.00/lb.
Company chairman and chief exec-
utive Mitch Alland has been involved
with copper mining for 23 years, with
a career at the World Bank and
International Finance Organisation.
The £40m investment comes
despite the company’s directors hold-
ing just 2.12 per cent of the enlarged
share capital. An adviser commented:
“It is a testimony to Mitch’s ability
and the strength of the project that
he has been able to raise this much.”
Fox-Davies Capital is the lead finan-
cial adviser and broker for the mining
company, with nominated adviser
Beaumont Cornish.
The mining project is situated on
an island close to China, the world’s
largest copper importer. By 2015,
China is forecast to account for 42 per
cent of global copper consumption,
placing the project in an ideal loca-
tion. Alland added: “The increasing
global demand for copper represents
a significant opportunity for CDC.”
second year in a row that Hong Kong
has led the world in initial public
offerings.
New York’s $31.39bn US fundrais-
ing bid was a shadow of Hong Kong’s
eye-watering total, with Shenzhen
and Shanghai trailing behind Wall
Street, Dealogic said.
“It’s definitely an achievement –
Hong Kong can claim to be both an
international financial centre and a
gateway to mainland China,” Liu
Qiao, an associate business professor
at Hong Kong University said.
 Markets&Investment
20 CITYA.M. 13 DECEMBER 2010

LONDON’S TOP 250

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 Name Closing Price Price Change 52wk high 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)Company (p) (p) (p) (p)
3i Group 314.5 -2.25 326 250 Colt Telecom 127.75 1.5 142.5 109 John Wood Group 488.25 2.25 503.5 286 RSA Insurance Grp 127 0.75 136.5 114.75
3i Infrastructure 118.5 0.75 120 97 Compass Group 577.5 -6.5 588.5 425 Johnson Matthey 1936 20 1973 1446 SABMiller 2155 1.5 2157 1650
A.B. Foods 1091 -14 1136 804.5 Cookson Group 618 5 622 367.5 JPM Flem.Emerg Mkt. 610 0 621 450.5 Sage Group 282 -0.25 289 220
Aberdeen Asset.Man. 205 5 205 112.75 Croda International 1511 4 1610 751 Jupiter Fund Man 295 -5 310 180.25 Sainsbury (J) 374.5 0.75 395 313
Admiral Group 1556 -7 1693 1107 Daily Mail & Gen 546.5 0 567.5 404 Kazakhmys 1529 17 1630 965 Schroders 1779 2 1779 1116
Aegis Group 142.5 -1 145.5 103.5 Davis Service 417.5 9.5 435 360.25 Kesa Electricals 168.5 6.5 174 99.25 Schroders NV 1409 4 1409 929.5
Afren 143 7 143.25 79 De La Rue 834.5 -0.5 1005 549.5 Kingfisher 253.75 0 259 198.5 Scot.& Sth. Energy 1125 9 1198 1010
African Barrick Gold 603 -6 670 503 Debenhams 70.75 0 84 53 Ladbrokes 128 -0.5 162.75 123.5 Scottish Mortgage 697.5 -0.5 699 475
Aggreko 1511 5 1685 803.5 Derwent London 1546 5 1605 1208 Lancashire 536 -5.5 647 422.25 SEGRO 288 -2 352 250.25
Alliance Trust 369.25 2.25 369.25 293.5 Dexion Abs 138.5 -0.5 148 131.25 Land Securities 661 1.5 696.5 545 Serco Group 573 -6 651 494.25
Amec 1115 -1 1155 733.5 Diageo 1174 11 1193 1000 Legal & General 99.25 0 106.25 69.75 Severn Trent 1424 3 1468 1045
Amlin 398.5 -0.5 433 357.25 Dixons Retail 26 0.5 38 23.75 Lloyds Banking Grp 68.5 0 77.5 46.5 Shaftesbury 447 4.5 460 349.25
Anglo American 3027.5 32.5 3062 2254 Domino’s Pizza 526 0 552.5 285 Logica 123.25 -0.5 148 101.75 Shire 1481 -3 1567 1159
Antofagasta 1497 -13 1528 761 Drax Group 385.75 6 444 326.25 London Stock Ex. 807 -5.5 812.5 544 SIG 121 -1.25 137.75 90.75
Aquarius Platinum 348.25 -2.25 458 227 DS Smith 208.25 -1.75 210 104 Lonmin 1857 0 2157 1355 Smith & Nephew 650.5 14.5 696.5 537.5
ARM Holdings 396 1.5 414.5 169.25 Dunelm 548 19.5 548 325.25 Man Group 285 1 327.5 202 Smiths Group 1255 18 1285 954
Ashmore Group 362 0 383.75 218 easyJet 423.25 -0.25 496.5 341.5 Marks & Spencer 378 0.5 427.5 323.5 Soco International 365 -1 484.25 292
Ashtead Group 155.25 -2.75 158 69.5 Edin.Inv.Tst. 444.5 1.5 464.25 351.5 Meggitt 359.75 0.5 367.5 242.25 Spectris 1214 3 1222 691.5
AstraZeneca 3010.5 -6.5 3385 2732 Electrocomponents 264.75 0 279.5 161.75 Melrose 291 -2.25 304.25 162 Spirax-Sarco 1852 -9 1904 1096
Atkins (WS) 710.5 -11 792.5 556.5 Enquest 137.75 1 146.5 89.25 Mercantile Inv Tst 1055 -3 1066 822.5 Spirent 150 -1.5 160.25 93.5
Autonomy 1377 32 1975 1271 Essar Energy 578.5 11.5 578.5 383 Michael Page 499.5 -0.5 513.5 346.5 Sports Direct 146 2.5 152.75 92.25
Aveva Group 1583 -6 1589 950 Eurasian Nat Res 965 27 1266 818 Micro Focus 386.25 3.5 546.5 276 St James’s Place 278 0 292 204.25
Aviva 391.5 -3 423.5 294.25 Euromoney Inst. 722 -5 727 411 Millennium & Cop. 545.5 3.5 570 351.5 Stagecoach Group 205.25 -3 224 160.75
Babcock International 550 3.5 635 492.75 Experian Group 776.5 1.5 789 572 Misys 295.25 -2.75 304 200.5 Standard Chartered 1762.5 -47.5 1950 1351.75
BAE Systems 330.5 5.75 388.75 294.75 Ferrexpo 361 0.5 396 179.5 Mitchells & Butlers 357.25 -0.5 359 247.5 Standard Life 213 0.25 236 173
Balfour Beatty 306.25 -2.75 309 229.75 FirstGroup 390 0.5 426 336 Mitie Group 223.25 0.5 241 188.75 Supergroup 1620 41 1638 535
Barclays 272.25 -3.75 383.25 255.25 For.&Col.Inv.Tst 301 0 303 251.5 Mondi 495 0 557.5 323.75 TalkTalk 164.75 -2.25 167 108.5
Barratt Development 89.5 0.5 142 70 Fresnillo 1533 15 1605 669.5 Monks Inv.tst. 355.5 2.25 355.5 265.5 Talvivaara Mining 535 2 581 342.5
BBA Aviation 216.25 5.25 217.25 154 G4S 252 2.5 283.5 237.75 Morrison (Wm) 270 -2 306.25 257.5 Tate & Lyle 532.5 -2.5 541.5 388.75
Bellway 650 -12 826 511 Genesis E.m.f. 531.5 -6 542.5 399 Murray Int.Tst 924.5 -3.5 936 720 Taylor Wimpey 29.25 0.25 44 22.25
Berkeley Grp Hldgs 911 -21.5 932.5 742 GKN 206.5 1.5 210.5 102 National Express 227.5 -2.5 259.5 182.25 Telecity Group 493.75 0 532.5 357
BG Group 1303 -30.5 1333.5 984 GlaxoSmithKline 1250 3.5 1339.5 1095 National Grid 547.5 -1 613.25 484.25 Templeton Emrg. 654 -2 685 471.5
BHP Billiton 2468 -1 2481 1684.5 Great Portland Est. 354 1 364 268 Next 2030 19 2344 1817 Tesco 427.75 1.5 454.5 377.5
BlackRock Mining 770.5 -5.5 776 492 Greene King 478 3 478 376.25 Northumbrian Water 331 2.75 361.5 252.75 Thomas Cook Group 186.5 1.25 272 171.75
BlueBay 483.5 -0.5 489.25 258 Halfords Group 447 3 550 372.75 Ocado Group 161 6 170 123.5 Travis Perkins 958 -6.5 964.5 664.5
BlueCrest AllBlue 173 0.5 174.5 152 Halma 359.75 -0.25 360 223 Old Mutual 119.5 0.25 145.25 97.25 TUI Travel 232.25 -1.25 308.5 190
Booker Group 59.25 -0.25 60 38.75 Hammerson 410.5 -2.5 434.5 336.25 PartyGaming 235.5 -3.5 334.5 206 Tullett Prebon 378 -0.5 417.25 262
BP 455 -0.5 655.5 303 Hargreaves Lansdown 539 13.5 539 271.25 Pearson 1011 -3 1051 855 Tullow Oil 1232 13 1369 991.5
Brit Insurance 1037 0 1045 724 Hays 122 1 123.5 88.5 Pennon Group 630 5 639 483 UK Commercial Prop 78.25 0.25 85 72.75
British Airways 274.25 1.25 286 184.25 Henderson Group 127.25 0.75 151.75 112.75 Persimmon 417.75 -9.5 507.5 336.5 Ultra Electronics 1665 15 1895 1265
British Amer.Tob 2379 13 2464.5 1926 Heritage Oil 420.5 -6.5 581 296.75 Petrofac 1443 -14 1540 876.5 Unilever 1894 -13 2015 1688
British Empire Tst 492.5 -1 497.5 394 Hikma 808 12.5 808 509 Petropavlovsk 1158 3 1365 852 United Utilities 594 5 628.5 488.25
British Land 508 -4 520 418.25 Hiscox 361.75 0.25 370 300 Phoenix Group Hldgs 641 -8.5 758 557.5 Utd Business Media 666.5 3 682.5 409.75
Britvic 474.5 2.75 518 379 Hochschild Mining 605 -10 658 234 Premier Farnell 278 -2 304.5 171.5 Vedanta 2275 70 2934 1839
Brown (N.) Group 301.75 5.75 301.75 206.5 Home Retail Group 204 -0.25 302 199.5 Premier Oil 1908 -11 1938 1017 Victrex 1440 10 1442 788
BSkyB 735 -1 736 524.5 Homeserve 448.5 3.75 487.5 322.75 Provident Financial 825.5 -2.5 974 728.5 Vodafone Group 165.25 1.5 175 129.5
BT Group 181.5 0.5 181.5 110 HSBC Holdings 663 -3.5 740.5 596.25 Prudential 659 5 659 487.5 Weir Group 1764 8 1861 676
Bunzl 710 -8 777 616.5 Hunting 705 12 705 439.5 PZ Cussons 389 3.5 409 234.75 Wellstream Holdings 747 1 789 436
Burberry Group 1108 -29 1156 566.5 ICAP 524 0 528 294 QinetiQ Group 128 3.25 167 96.75 WH Smith 514 9 529.5 398.25
C&W Comms 49.75 0.75 63.75 44.25 IG Group 511 7 553 360 Randgold Res 5605 -10 6655 4209 Whitbread 1763 -6 1812 1266
C&W Worlwide 68.25 0.25 100 60.5 Imagination Tech 364 -18.5 441.75 215 RDS ‘A’ 2051 20.5 2100.5 1624 William Hill 165.75 -0.25 216.5 155.5
Cairn Energy 411 -4 493.25 303.5 IMI 900 -2 948 504.5 RDS ‘B’ 2034.5 19.5 2064.5 1554 Witan Inv Trust 499.5 0.5 499.5 410
Caledonia Inv. 1882 23 1882 1511 Imperial Tobacco 1898 3 2154 1753 Reckitt Benckiser 3509 28 3655 3037 WOLSELEY 1828 -13 1880 1166
Capita Group 683.5 -2.5 826 635.5 Inchcape 350.75 -2 368 237 Reed Elsevier 519 -2 563 460.5 WPP Group 769 -7.5 776.5 572.5
Capital & Counties 148.5 0.5 157 100 Informa 410 3.5 448 295 Regus 81.5 -2 120 66 Xstrata 1441 21 1460.5 845.75
Capital Shop Centre 390 -1 411.5 301 Inmarsat 680.5 5.5 821 606.5 Renishaw 1225 19 1235 516.5
Carillion 370.75 0.5 370.75 273 InterContinental Htl 1217 -1 1230 867 Rentokil Initial 96.75 2 138.5 87.75
Carnival 2757 17 2920 2037 Intermediate Cap.Grp 321.25 -6.25 351 240.5 Resolution 235.5 0.5 349 211.25
Catlin Group 358 -1 393 320 International Pers Fin 343 -1 343.75 183.25 Rexam 303.5 -1.5 346.75 272.5
Centamin Egypt 168.5 -0.75 197 106.75 International Power 419 4.25 436.75 284.5 Rightmove 755.5 3.5 810 464 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 324.5 3.75 346 264 Intertek Group 1885 -49 2000 1150 Rio Tinto 4397 15.5 4505 2812 POWERED BY
Charter 760.5 -2 848.5 567 Invensys 332 -1.5 349 230.25 RIT Capital Partners 1194 22 1210 969
Chemring Group 2969 21 3663 2598 Investec 497.5 -0.25 562 417.75 Rolls-Royce Group 639 -3 654.5 473.5
Close Brothers 861.5 19 861.5 664 ITV 73 0 73 48.25 Rotork 1720 0 1895 1145 www.digitallook.com
Cobham 209.5 6 276 192.25 Jardine Lloyd 605.5 -4 609.5 445.75 Royal Bank of Scot 41.75 -0.5 58 28.5
CITYA.M. 13 DECEMBER 2010 Investment | Foreign Exchange 21

Equities to leap as Santa Claus rally comes to town

ANALYSIS l Dax
MARTIN ON are for now seen out-weighing fears
that the region’s debt crisis could
spread.
nervous markets.
Speculation was rife on Friday that
China would raise interest rates at the
7,200 7,006.17
10 Dec

THEMARKETS GFT is quoting the FTSE 100 index

to open up 32 points from Friday’s
close, at a level of 5,844. The German
weekend, following data showing
that consumer prices rose 5.1 per cent
on the year, the highest in over two
6,800

DAX 40 is expected to open up 25 years. 6,400

points at 7,031, and the French CAC Yet with the rate hike largely priced
40 index is forecast to open up 15 in by markets already, the absence of
points at 3,872. such a move come this morning Source: Digital Look
6,000
could provide an additional boost for 13 Sep 1 Oct 21 Oct 10 Nov 30Nov
Tax cuts and data lift sentiment equities.
President Obama’s approval of the Martin Slaney is director of Global Dealing ANALYSIS l FTSE
extension of tax cuts, data fom the UK Operations, GFT 5,900 5812.95
10 Dec
and Europe showing industrial pro-
5,800
MARTIN SLANEY duction and manufacturing expand-
ing at much better than expected 5,700
rates and US consumer sentiment at
6-month highs are all combining to 5,600

E
uropean stocks are forecast to provide the catalyst for a Christmas
power on ahead on the open this rally which only a week or so ago 5,500
morning, building on recent looked all but impossible, as the
gains as positive economic data European crisis took centre stage for 13 Sep 1 Oct 21 Oct 10 Nov 30 Nov

WALL STREET WEEK AHEAD

T
he December rally may be reach-
ing its climax, with just two
weeks to go before Santa Claus
makes his midnight run.
Dwindling volume, excess optimism,
and history all point to a stock market
that could be running out of steam.
Investors appear to have grown
complacent as the CBOE Volatility
Index, or VIX has fallen to levels not
seen since April.
Stocks have made new highs on
almost a daily basis.
The S&P 500 closed on Friday at its
highest level since September 2008
and the Nasdaq scored its best finish
since late December 2007, with many
expecting gains to run through the
end of the year.
But Cleveland Rueckert, an analyst
at Birinyi Associates in Stamford,
Connecticut, believes the year-end
rally may be largely done.
“The majority of that gain may
already have occurred,” he said.
“Most people are more likely to be
closing out their books at the end of
the month and looking for opportu-
nities to open new positions at the
start of the next month.”
Rueckert said that over the last 65
years, when the S&P 500 has rallied at
year’s end, the average gain has been
3.4 per cent between Thanksgiving
and New Year’s. So far, the index has
risen 3.5 per cent since the start of the
period.
Today starts the last five-day trad-
ing week before Christmas. The fol-
lowing week will be cut short by the
holiday. With 25 December falling on
Saturday this year, the US stock mar-
ket will be closed on Friday 24
December to observe the Christmas
holiday on Saturday.
Inflation data for November will
dominate the week’s economic calen-
dar, with the US Producer Price Index
due tomorrow and the US Consumer
Price Index set for Wednesday.
 22 Investment | Spread Betting
Take a punt on the
Three Lions’ quest
for Ashes victory
Cricket trading expert Ollie
Drew looks at the best of the
spread bets for the third Test
I
T IS hard to know what England fans
are enjoying more. Their team’s dom-
inance down under, or the pitiful
showing by Australia so far.
Going into the series, England were the
better team on paper, but most observers
expected more from the Aussies in their
own back yard – a fact that was reflected
in the hosts’ marginal favouritism with
the bookmakers.
Before the action began, Sporting Index
had set Australia’s supremacy at two
points, where 10 points are awarded to the
series winner and five points per Test won.
The smart money was certainly on selling
Australia’s series supremacy – Sporting
Index now offers England’s supremacy at
11-14.
England have set an Olympic Games-
worth of records in their last two innings.
The two men under greatest pressure –
Kevin Pietersen and, in particular, Alastair
Cook – have dispelled any worries about
their selection with run-scoring of the
finest quality.
Pietersen and Cook’s performances pay
witness to their undoubted quality and
reserves of concentration. But they also
highlight how weak the Australia bowling
attack is. The likes of Glenn McGrath,
Brett Lee and Shane Warne wouldn’t have
given England’s most vulnerable players
such an easy ride – and the clamour for
the 41-year-old Warne to come out of
retirement speaks volumes.
Australia captain Ricky Ponting’s assess-
ment of the second Test in Adelaide
describes it most succinctly and accurate-
ly: “They out-batted us, they out-bowled
and out-fielded us the entire game,” he
said.
Going into this week’s third Test in
Perth at the Waca ground, which starts in
SAYING YOU HAVE THE
TIGHTEST SPREADS
IS LIKE BRAGGING BECAUSE YOU HAVE A BELLY BUTTON.
Everyone has 1 point spreads these days. We do too, but they’re not what we’re most proud of. We provide free education
to help make more informed traders who—quite possibly—make smarter trades. We’re available 24/7. Day or night.
And, for a limited time, we’ll give you a bonus of up to £3,000 when you open an account.*
*Terms and conditions apply. See website for details. When trading CFDs, spot forex or spread bets you can lose more than
your initial deposit.
Visit gftuk.com to get started.
CITYA.M. 13 DECEMBER 2010
the middle of the night at 2.30am on
Thursday, the early weather forecast is dry
and sunny. Australian batsman Simon
Katich is out with an injury, while other
changes to the Aussie team are needed
and can be expected.
Another victory will give England an
unassailable lead, guaranteeing posses-
Can England repeat sion of the little urn until the summer of
their second Test 2013 at the earliest. Retaining the trophy
success? might have been enough for Andrew
PICTURE: Strauss’s men before the series began;
Action Images however, his sights will now be set more
than a little higher.
But England followers are a suspicious
sort, whatever the sport. After all, they
have seen more than enough episodes of
paralysing stage fright over the years. The
note of caution here is that the Three
Lions have only ever won once at the Waca
– in 1978 – and they last avoided defeat on
this remote ground in 1986, during their
last successful tour of Oz.
England must overcome Stuart Broad’s
enforced absence, but even that task looks
easier than might have been expected
after his relatively negligible contribution
before an abdominal injury cut short his
involvement.
Australia’s selection problems are far
greater and their biggest problem is find-
ing the firepower to take 20 wickets. They
haven’t even been close so far.
The Waca is typically a results pitch
ASHES STATISTICS
l So far this series, England’s Alastair Cook has clocked up
the most runs with 450 under his belt, followed by Australia’s
Michael Hussey with 340.
l England’s Steven Finn and Graeme Swann have both
taken nine wickets but Australian Peter Siddle has the best
bowling rate this series at 6-54.
l The most successful opening partnership so far was in the
first Test at Brisbane with Andrew Strauss and Alastair Cook
managing 188 runs between them.
l Since the beginning of 2009, England’s No 6 batsmen have
averaged an outstanding 54.28 runs while Australia’s sixth
batsmen average only 35.29 runs.
SPREAD BETS | CFDs | FOREX
free phone 0800 358 0864
gftuk.com
GFT Global Markets UK Ltd. is autho-
rised and regulated by the Financial
Services Authority. CD03UK.129.120310
CITYA.M. 13
18 DECEMBER
OCTOBER 2010
2010 Investment | Spread Betting 23

ASHES STATISTICS
THE TIPSTER
l England is currently third in the world Test rankings
while Australia has fallen to fourth.
l The win-loss ratio in Ashes Tests (up until the last series)
GO AHEAD TO PROFIT
stands at 122 wins for Australia to 97 wins for England with
86 draws. This has accelerated in favour of Australia in the FROM RAIL FRANCHISES
last 30 years – before the 1989 series began, the win-loss ratio
was almost even, with 87 wins for Australia to England’s 86.

l The greatest number of runs ever scored in an Ashes test
by an individual was 334 by Don Bradman in 1930.
Bradman also holds the record for the best batting average
in the Ashes. He scored 5,028 runs against England with an
average of 89.78 per innings.
l Australian Shane Warne is the highest wicket taker in
Ashes series. He has 172 wickets from 31 Ashes matches at an
average of 22.30.
l Since 2000, five Tests have been held. Australia have won
three of these while England have taken two.
l England last won the Ashes in Australia in 1986-87 when
they beat the home team by three tests to one.
l England won the last Ashes by winning two Tests, draw-
ing two and losing just one.
with approximately one in five games end-
ing in a positive outcome. With 25 points
for the winner, 10 each in the event of a
draw, and zero for the loser, Sporting
Index has set win index spreads of 10-11.5
for Australia and 12-13.5 for England,
which leaves no room for a stalemate for
buyers at either price. I wouldn’t be put
off by that and, even accounting for a
reaction from Australia, this pivotal
Test – on a field where the hosts have
lost twice in their last three outings –
really looks like being England’s to
lose.
In terms of individual perform-
ances, it is probably best to leave the
Aussie players until the team is
announced. England-wise, punters
who think Pietersen and Cook haven’t
emptied the tank just yet will be
pleased to hear that both men scored
well on this ground four years ago. KP
hit 70 in the first innings and was still
standing on 60 in the second, after
Cook had hit 116. Then Warne ran riot
as England fell short of an unlikely
557-run target.
With their previous performances
leading to increased expectations,
it might be an idea for spread bet-
ters to buy Ian Bell’s runs at 80
with Sporting Index instead. The
Warwickshire man is in decent
nick with a 76 and a 68 not out
in his two innings so far this
series. He also scored 87 on his
last Test appearance in Perth.
POINTERS
l Buy England’s third Test
win index at 13.5 with Sporting
Index.
l Buy Ian Bell runs at 80
with Sporting Index.
T
HE rail and bus company Go Ahead
might be a reasonable long call. The
company seems to be trying to
focus more on core aspects of the
business but the share price is continuing
to struggle to make an impression.
There's clearly longer term exposure to
the rail franchise renewal mechanisms
and also government intervention and
although the company found support off
the spending review plans for public
transport, the share price has drifted over
the last few weeks. As with many stocks
we're still some considerable distance
from the 2007 highs. The current IG
Index price on Go Ahead is 1268.8p-
1278.2p.
HMV Group suffered heavy losses in
their share price at the end of
last week following a drop
in sales reported on
Thursday. But with
their busiest period
just upon us, and a
slow start to
Christmas trad-
ing due to bad
weather, the
stock could
have been over-
sold. The rise in
VAT will affect
them too, as peo-
ple may begin to
stock up on goods
ahead of the price hike.
Cantor Index offers a
spread on HMV of
3,445p–3,480p.
The German tour operator TUI has fig-
ures out tomorrow and it might be worth
seeing if they can break above the previ-
ous high set at the end of September,
especially given the encouraging results
already out in the tourism sector.
WorldSpreads offers a €9.05–€9.25
spread on TUI on the German exchange.
Carpetright report their latest inter-
im results on Tuesday with their share
price looking very interesting from a
technical point of view. The recent rally
from the 685p level has taken it through
not only the 100-day moving average at
739p, but also the 200-day moving aver-
age at 763p. A decent set of results
could well see Carpetright take off from
this footing towards the 800p level, with
850p a target in early 2011. Spread Co
offers a spread on Carpetright of
762p–773p.
Daniel Knowles

much more difficult. Let’s say one wanted to

SPREAD BET buy £20 per point of Company ABC at the
GURU current market price of 180p, which is the
same as 2,000 shares. But since the stock is
JOSHUA illiquid, there are only 1,000 shares available
at 180p and another 1,000 shares available at
RAYMOND 182p. This means that you have to buy the
MARKET equivalent amount at a volume-weighted
STRATEGIST price of 181p, which is more expensive.
josh@cityindex.com With very illiquid stocks, the volume-
weighted price of a transaction can some-
times be much worse and the same could
apply to when you want to sell. There may
even be a time where there are no buyers or
sellers, meaning you can’t get in to or out of a
market.

Q. Q.
Dear Josh, why is it more risky Dear Josh, is spread betting for
trading in stocks with low market long-term traders?
capitalisations than large caps?

A. A.
It’s all down to underlying liquidity There are contracts that you can
Shanghai: China is

and this means that one has the abili-
ty to get in, but more importantly, out
of the market with ease and at a good price.
The more liquid a stock, the greater the num-
Q.
spread bet on if you have a long-term Dear Josh, why is China important stocks on the FTSE 100. Many of these min-
time horizon. But the majority of important to many for the FTSE 100? ing companies rely heavily on demand from
traders use spread betting predominantly for FTSE firms China for basic resources. So when China tries
short to medium-term trading as spreads are to cool rapidly rising inflation through mone-
Picture: REX

ber of buyers and sellers for the shares and
therefore the easier it is for one to buy a cer-
tain amount of shares at a certain price.
But when shares are illiquid there are very
few shares switching hands so it can become
A.
much tighter for shorter-term contracts. The China is the world’s fastest growing
time that spread bets are typically open for economy and therefore plays an influ-
range from a minute by minute basis to a ential role in stock exchanges around
quarterly basis. Certainly at City Index very the world. It can have a more influential role
few are left open for longer than six months. because there are several heavyweight mining
tary tightening, it can have a big effect on
metal demand and on the miners themselves.
You can learn more about the markets
and spread betting with Josh at his free City
Index seminars.
 Lifestyle
24
Journey into the
mighty history
of Samarkand
Diana Preston voyages
to exotic Uzbekistan,
Tamburlaine’s violent
stomping ground
A
ROUND Tashkent airport, giant
hoardings proclaimed in English:
“Uzbekistan Airways Wish You
Good Luck”. It might have been
more unsettling to read that message driv-
ing into Heathrow before our departure. In
fact, we’d had an incident-free flight on
Uzbekistan Airways to Uzbekistan’s capi-
tal. Tashkent sounds endlessly exotic but
isn’t really. Much was destroyed by a mas-
sive earthquake in 1966 when the country
was part of the USSR and the Russians re-
built it in typical Soviet style with slab-like
concrete buildings. Yet wandering the spa-
cious parks or sampling plov – a concoc-
tion of buttered rice, onions, carrots and
mutton – and looking at the rich mix of
people from pale Russians who stayed on
after independence to oval-faced, almond-
eyed individuals in brightly-coloured
striped robes, you begin to get a sense of
where you really are – in the heart of one
of the great thoroughfares of history –
Central Asia.
Next day, we flew to the walled city of
Khiva, near the Oxus and the border with
Turkmenistan. With its girdle of thick
mud walls and delicately-tiled domed
palaces, tombs and mosques, Khiva looks
straight out of a fairy-tale but according to
our guide, life under its khans was nasty,
brutish and short. Tax evaders were
impaled, runaway slaves nailed to the city
gates and other miscreants buried alive
upside down or simply flung from a con-
venient minaret.
Yet there’s also great beauty. Wandering
the narrow alleys and courtyards, their
sun-bleached brick walls richly golden in
the sunlight, Khiva is magical. Tiles –
green, blue and golden – shimmer on
domes and towers. Doors are inlaid with
ivory and coral. The royal harem where
wives and concubines lived in silk-hung,
richly-carpeted chambers guarded by
eunuchs evokes the romance and glamour
of the Arabian Nights. Well-placed along
the Silk Road, Khiva grew rich on trade –
slaves, silks, jewels and spices all passed
through. Today, goods for sale on the stalls,
apart from some wonderful shaggy black
| Travel
sheepskin busbies which a guardsman
might envy, are more likely to include
enormous corsets made in China, giant
stuffed tigers – soft toys I hasten to add –
and dog-eared copies of BBC English cours-
es.
From Khiva we followed the course of
the broad, sandy-banked Oxus along roads
lined with mulberry trees – silk is among
the country’s major exports – through a
landscape of cotton, maize and wheat
fields to Bokhara. If the khans of Khiva had
an evil reputation, some of the Emirs of
Bokhara were even worse. In the nine-
teenth century the Emir Nasrullah impris-
oned two British officers, early
participants in “the Great Game”, for
months in a twenty-foot deep “bug pit”,
leaving them to be tormented by flesh-eat-
ing insects before having them beheaded.
The pit is still there – empty and sanitized
– and so is the Emir’s Ark Fortress with its
dungeons, torture chambers and pillared
reception halls from which he gazed out
over his city.
Bokhara is a dusty, hectic place rich in
ancient madrassahs and mosques tiled
and carved with true artistry, like the 155-
foot high Kalon Minaret that so impressed
Ghenghis Khan he let it stand while pul-
verising the rest of the city. But one of the
city’s greatest charms are the domed,
arcaded markets where merchants
brought their carpets, silks and jewels to
trade and today’s shopkeepers bargain
hard over persimmons and Playstations.
The Silk Road knit cities along its route
like Khiva and Bokhara together and the
merchants following it needed places to
stay. Driving towards Samarkand, most
important of all the route’s entrepots,
every few miles we passed the crumbling
skeletons of caravanserais – graceful,
impressive, arcaded structures built
around great courtyards – which were
once a refuge for caravans of as many as
10,000 pack animals. In the winter, the
innkeepers collected snow and ice and
stored it in pits in the courtyard to be used
Tax evaders were impaled, runaway
slaves nailed to the city gates and other
miscreants buried alive upside down
Left: view of Khiva, Khwarezmia, Khorezm Province. Above: people in the
bazaar at the West Gate of the city of Khiva, Uzbekistan.
UZBEKISTAN, CENTRAL ASIA
KAZAKHSTAN
Aral Sea Lake Balkhash
UZ
Nukus BE K YRGYZSTAN
KI
Urgench ST Tashkent
AN
Gulistan
Bukhara Dzhizak
T U R K M E N ISTA N Samarkand
Karshi TADJIK ISTAN
Termez
IRAN
AFGHANISTAN
in the summer as drinking water.
Top: Registan Square. We reached Samarkand as the sun was
sinking over the almond and apricot
Picture: ROBERT orchards that surround it. In the Registan
HARDING Square, bounded by three soaring blue-
tiled madrassahs, we watched as dusk soft-
ened the outlines of these monumental
facades. Samarkand has a long and violent
history. Reputedly founded by Alexander
the Great over 2,300 years ago, in the sev-
enth century it fell to Arab invaders who –
inspired by their recently adopted Muslim
religion – destroyed the temples of its fire-
reverencing Zoroastrian population. Six
centuries later it was again wrecked – this
time by Genghis Khan whose hordes
slaughtered 250,000 people.
The Samarkand of today owes some of
its beauty and grace to another mediaeval
thug – Tamburlaine – who in 1370 made it
his capital. Though described by the six-
teenth century playwright Christopher
Marlowe as “the Scourge of God” and
feared by others simply as “the Great
Destroyer”, he had a profound aesthetic
sense and imported thousands of Indian
craftsmen, captured during his sacking of
Delhi, to beautify his city. The result was a
place fabled even in his time for its exqui-
site domed palaces, mosques and places of
learning protected by high walls, a section
of which remains.
The Registan was the centre of
Tamburlaine’s grand design, with hostels
for dervishes, a large hammam and mar-
kets. Though the buildings you see today
came later, Tamburlaine remains the dom-
inant presence. A statue depicts him stern,
grave, bearded and positively Arthurian.
Nearby is his tomb – the Gur Emir – with
its great blue double dome with sixty-four
ribs, Mohammed’s age when he died. The
Adventure travel specialist Explore (0844 499 0901, www.explore.co.uk) offers a 12-day
“Golden Road to Samarkand” tour of Uzbekistan, taking in Tashkent, Khiva, Bokhara,
Samarkand and a desert yurt camp, from £1,468 pp. including flights (Heathrow), transport
and accommodation and guide. Regular departures between April and October.
CITYA.M. 13 DECEMBER 2010
starry blue and gilt interior with its jade
and onyx inlay has a stunning delicacy. As
we entered, men in black and white skull-
caps were praying, hands held out and
palms upward, their murmurs rising in
the void beneath the dome.
Tamburlaine himself lies in the crypt
below. Edging down the narrow sloping
passage to it gives you goose bumps. Before
his death, Tamburlaine is said to have
cursed anyone who interfered with his
grave. A Russian anthropologist, keen to
establish whether Tamburlaine had
indeed been lame – his name in Europe
comes from a corruption of his nickname
“Timur the Lame” – opened the sarcopha-
gus in 1941. On that day Nazi Germany
attacked Russia. The expert discovered that
Tamburlaine did indeed have one leg
shorter than the other. Since then the war-
rior has been left undisturbed in his cof-
fin, the lid of which is carved with a
delicate tracery of flowers. That perhaps
seems strange but he loved gardens and
laid many around Samarkand. During the
hot summer months, he lived among
them in silken pavilions according to the
amazed testimony of the Spanish ambassa-
dor, one of the first Europeans to visit the
region.
Locals claim that the fig and apple plan-
tations around Samarkand date back to
Tamburlaine’s time. We drove through
them up to Kohat Hill to see the remains of
the six-hundred-year-old observatory built
by Tamburlaine’s grandson, the
astronomer, poet and scientist, Ulughbeg.
In the distance we could just make out the
misty, shadow outlines of the Pamir moun-
tains. The ruins of Ulughbeg’s giant mar-
ble sextant lie on the hillside and a flight
of steps descends to its base. It was so accu-
rate he could calculate the length of the
year to within ten seconds. However, he
met the fate that in times past often over-
took advanced thinkers. He was murdered.
The same anthropologist who disturbed
Tamburlaine also opened Ulughbeg’s
tomb in 1941 and found his head had been
severed from his body.
Samarkand and its mighty past assault
all the senses. The magnificence of its
architecture, the weight of its history, the
smell of ripe musk melons and grapes
piled up for sale, the earthy taste of the red
wine from the surrounding vineyards
sipped as you loll like a bygone potentate
on a divan beneath a flower-covered trellis,
the sun setting behind a towering gateway
embellished with fierce tigers and soft-
eyed gazelles – all are unforgettable. And
so they must have been to all those thou-
sands of weary travelers whose journey
along the Silk Road brought them here
over the last two millennia and beyond.
CITYA.M. 13 DECEMBER 2010 Lifestyle | TV& Games 25

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Inside Out: BBC News
8pm EastEnders
8.30pm Baby P: In His
Mother’s Words – Panorama
9pm CHOICE Accused: Legal
drama, starring Marc Warren.
10pm BBC News
10.25pm Regional News
10.35pm A Question of Sport
11.05pm Sports Personality of the
Year: The Contenders 11.45pm The
Graham Norton Show: Weatherview
12.40am Sign Zone: The Apprentice
1.40am Sign Zone: A Life without
Work 2.40am Sign Zone: The Story
of Science – Power, Proof and
Passion 3.40am-6am BBC News
6pm Celebrity Eggheads
6.30pm Strictly Come Dancing
– It Takes Two
7pm This World: Pakistan’s
Flood Doctor:
8pm University Challenge:
Merton College, Oxford, takes
on Queens’ College, Cambridge.
8.30pm Miranda:
9pm Ian Hislop’s Age of the Do-
Gooders: The broadcaster turns
his attention to the perils of sex
and alcohol. Last in the series.
10pm Grumpy Old Men
10.30pm Newsnight: Weather
11.20pm American Dream: The
role of faith in the dream.
12.20am BBC News
3.40am-6am Close
6pm London Tonight
6.30pm ITV News
7pm Emmerdale
7.30pm Coronation Street
8pm Countrywise Kitchen
8.30pm Coronation Street
9pm CHOICE The Savoy
10pm ITV News at Ten
10.30pm London News
10.35pm FILM Young Adam:
Premiere. Period drama,
starring Ewan McGregor. 2003.
12.25am The Zone; ITV News
Headlines
2.25am UEFA Champions League
Weekly 2.55am The Jeremy Kyle
Show 3.50am The Jeremy Kyle
Show 4.40am-5.30am ITV
Nightscreen
6pm The Simpsons 6pm Home and Away
6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Channel 4 News 7pm Five News at 7
7.55pm 4thought.tv 7.30pm How Do They Do It?
8pm Heston’s Christmas Feast Five News Update
9pm CHOICE River Cottage 8pm The Gadget Show:
Christmas Five News at 9
10pm Alan Carr: Chatty Man 9pm Extreme Fishing with
11.05pm Peep Show Robson Green
11.40pm The Simpsons 10pm FILM Sudden Impact:
12.10am Music on 4 Favourites: Crime thriller sequel, starring ACCUSED
James Blunt Clint Eastwood. 1983. BBC 1, 9PM
Marc Warren stars as a man who
12.40am Premier League Poker 12.25am The World of Stupid
1.40am FILM Guilty By Suspicion: Criminals assaults the suspected attacker of
Drama, starring Robert De Niro. 12.55am SuperCasino his daughter, but struggles to live with
1991. 3.25am King of the Hill 4am The FBI Files 4.45am House the guilt he later feels.
3.50am King of the Hill 4.10am Doctor 5.10am Michaela’s Wild
Brothers & Sisters 4.55am ER Challenge 5.35am-6am Michaela’s
5.40am-6.25am One Tree Hill Wild Challenge

SKY SPORTS 1 10pm WWE: Late Night – of Fashion 11pm Criminal Minds 2am Misfits 2.55am What DISCOVERY HOME &
SATELLITE & CABLE

7pm Live Monday Night
Football 10.30pm You’re on
Sky Sports! 11.30pm A League
of Their Own 12am SPL
Round-Up 12.30am Soccer
AM: The Best Bits 1.30am
Monday Night Football 3.30am
Watersports World 4.30am
Max Power 5.30am-6am FIFA
Futbol Mundial
SKY SPORTS 2
7pm British Rally Championship
8pm NFL 10pm European
Rugby Special 10.30pm Great
Run Series 11pm British Rally
Championship 12am Show
Jumping 1am European Tour
Golf 2am Wonderful World of
Golf 3.30am-4.30am PGA
Tour Classic
SKY SPORTS 3
7pm Show Jumping 8pm
Great Run Series 8.30pm
European Rugby Special 9pm
British Rally Championship
Bottom Line 11pm WWE: Late
Night – Afterburn 12am WWE:
NXT 1am-4am Live WWE:
Late Night – Raw
BRITISH EUROSPORT
7pm Champions Club 8.15pm
Eurogoals 8.30pm Alpine
Skiing 10.30pm Eurogoals
11.00pm Champions Club
12.15am-1.00am Eurogoals
ESPN
6.30pm Talk of the Terrace
8pm NHL Ice Hockey 10pm
Between The Lines 10.30pm
Talk of the Terrace 12am NFL:
Monday Night Countdown
1.30am Live NFL: Monday
Night Football 4.30am-5am
Press Pass 2010
LIVING
7pm CSI: Miami 8pm Three
Fat Brides, One Thin Dress 9pm
America’s Next Top Model
10pm Harald Gloockler: Prince
1am CSI: Miami 2am CSI:
Crime Scene Investigation 3am
Charmed 4.40am Rehab
5.30am-6am Home Shopping
BBC THREE
7pm Great Movie Mistakes:
Blunders in Hollywood films.
7.05pm Doctor Who 9pm The
World’s Strictest Parents 10pm
EastEnders 10.30pm How Not
to Live Your Life 11pm Family
Guy 11.45pm The World’s
Strictest Parents 12.45am How
Not to Live Your Life 1.15am
Mad About the House 2.15am
Lip Service 4.15am Great
Movie Mistakes 4.20am-
5.20am Mad About the House
E4
7pm Hollyoaks 7.30pm Friends
9pm Scrubs 10pm The IT
Crowd 10.30pm Pete Versus
Life 11.05pm Misfits 12.10am
Scrubs 1.05am The IT Crowd
1.30am Pete Versus Life
About Brian 3.35am Reno 911!
4am Being Erica 4.45am-6am HEALTH
7pm A Baby Story 8pm 10
Switched
Years Younger 9pm Untold
HISTORY Stories of the ER 10pm The
7pm The Universe 8pm Real A&E 11pm Trauma Unit THE SAVOY
America: The Story of the US 12am Untold Stories of the ITV1, 9PM
ER 1am The Real A&E 2am
9pm Pawn Stars 10pm Star Documentary following the £100million
Wars Legacy Revealed 12am Trauma Unit 3am 10 Years refurbishment and reopening of the
Pawn Stars 1am Star Wars Younger 4am Baby Tales 5am- Savoy hotel in central London, which
Legacy Revealed 3am-5am 6am A Baby Story began in December 2007.
Life After People
SKY1
DISCOVERY 7.30pm Modern Family 8pm
8pm How Do They Do It? Best of Oops TV: Selection of
8.30pm How It’s Made 9pm home videos and out-takes.
Storm Chasers 10pm Frontline 9pm UK Border Force: A
Battle Machines with Mike Nigerian man tries to convince
Brewer 11pm Greatest Tank officers he is 15 years old.
Battles 12am Bear Grylls: Born 10pm NCIS: Los Angeles 11pm
Survivor 1am Deadliest Catch Cold Case 12am Road Wars
2am Chris Barrie’s Massive 1.50am Dom Joly’s Happy RIVER COTTAGE CHRISTMAS
Engines 3am The First World Hour 2.40am Oops TV 3.30am CHANNEL4, 9PM
War 3.50am Raging Planet The Dresden Files 4.20am Sell Hugh Fearnley-Whittingstall and his
4.40am Unsolved History Me the Answer 5.10am-6am team offer tips on enjoying the perfect
5.30am-6am How Does That Are You Smarter Than a 10 festive holiday, including recipes,
Work? Year Old? hangover cures and handmade crackers.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
10 22 23 16 15 27 11
9 9 4
16  
30 12
Place the numbers from 1 to 9 in each empty cell so that each 33  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 30 16
18 17
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 14 39
   
above or to the left of it. 34
You can only use the digits 1-9 21 11  
   and you must not use the
20 29 7
10 28    
same digit twice in a block. 15
    The same digit may occur 15 6 
26 13 19
  more than once in a row or
column, but it must be in a
33
22
7

24 29
  separate block.
6 11
3 38
    9 5 8
 

  ACROSS DOWN
1 Harvested (6) 1 Detector used to locate
 
    WORDWHEEL E I
4
6
Ready money (4)
Leeway (9)
distant objects (5)
2 One more time (5)
Using only the letters in the Wordwheel, you have 8 Muhammad ___, 3 Cream-filled pastry (6)
   ten minutes to find as many words as possible,
C S former boxer (3) 4 Author of The
Canterbury Tales (7)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A 10 French impressionist
painter (6) 5 Shade, tinge (3)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A T 13 Three-dimensional 7 Spider’s snare (6)

SOLUTIONS
shape (4) 9 Sour-tasting
KAKURO is at least one nine-letter word in the wheel.
F N 14 Sprang up (5) yellow fruits (6)

QUICK CROSSWORD 9 8 4 8 4 1
16 Vessel for travel 11 Scottish bread (7)
4 6 2 1 3 9 7 8 SUDOKU         
on water (4) 12 Propel with oars (3)
7 $ ; , 5 + , 1 (
1 7 2 4 6 1         
17 Employee (6) 15 Comfort, solace (6)
+ 1 , / ( 1 1
2 5 3 1 7 3 9
5 8 * 6 0 7 (          20 Kimono sash (3) 18 Asian peninsula
( + , 6 7 2 * 5 $ 0 8 3 1 4 6 7 2 5
         21 Moving staircase (9) separating the Yellow
: 5 2 7 ( 7 2 < 9 7 3 1
        
%
6 8 &
7 5
& (
6
( '
/ 8 6 +
1 7 5 4 2 8 9
8 9 2 1 9
6
9 6
WORDWHEEL          22 Delicate, woven and
decorative fabric (4)
Sea and the East Sea (5)
19 Narrow raised strip (5)
$ 8 7 + ( 1 7 , & <         
& 2 7 & ( ' ( 8 9 6 5 7 1 The nine-letter word was
2 3 1 3 5 1 4 2          23 Period of ten years (6) 21 Long and slippery
2 : / ( 9 , 1
SYNTHETIC          fish (3)
1 $ 1 1 < 7 8 % $ 9 6 7 9 2 8
 Sport
26 CITYA.M. 13 DECEMBER 2010

Results
=FFK98CC

;fne`e^),
?\jb\p/'
98I:C8PJGI<D@<IC<8>L<
8jkfeM`ccX%%%%%%%%%%%%%(  ) N\jk9ifd%%%%%%%%%%%%%%%%'  (
JZ_Xie\i/0
8kk1*.#'(,
We are back:
Ancelotti hails
<m\ikfe%%%%%%%%%%%%%%%%%%'  ' N`^Xe%%%%%%%%%%%%%%%%%%%%%%%%'  '
 8kk1*)#/,*
=lc_Xd%%%%%%%%%%%%%%%%%%%'  ' Jle[\icXe[%%%%%%%%%%%%%%%'  '
 8kk1)+#+-)
E\nZXjkc\%%%%%%%%%%%%%%(  * C`m\igffc%%%%%%%%%%%%%%%%%%%'  (
EfcXe(, Blpk+0
9Xikfe/'#:Xiifcc0' 8kk1,'#(*.

Chelsea revival
Jkfb\%%%%%%%%%%%%%%%%%%%%%'  ' 9cXZbgffc%%%%%%%%%%%%%%%%%%'  (
8kk1)-#/.0 :XdgY\cc+/
N\jk?Xd%%%%%%%%%%%%%%'  ( DXe:`kp%%%%%%%%%%%%%%%%%%%%%(  *
Kfdb`ej/0 Kfli\PXpX*'#>i\\e.*f^
8kk1*)#/(* Af_ejfe/(
9fckfe%%%%%%%%%%%%%%%%%%%%'  ) 9cXZbYlie%%%%%%%%%%%%%%%%%%'  (
DlXdYX-, D;`fl]/.
?fc[\e// 8kk1)+#+.(
Kfkk\e_Xd%%%%%%%%%%%%%%(  ( :_\cj\X%%%%%%%%%%%%%%%%%%%%%%'  (
GXmcplZ_\ebf(, ;if^YX.'28kk1*,#./.
Nfcm\i_Xdgkfe%%%%(  ( 9`id`e^_Xd%%%%%%%%%%%%%%'  '
?lek+, 8kk1),#(,'
  G N ; C = 8 >; Gkj
8ij\eXc%%%%%%%%%%%%%%%%%%%%%%%%%%%%(- (' ) + *+ (/ (- *)
DXe:`kp%%%%%%%%%%%%%%%%%%%%%%%%%(. 0 , * )+ (* (( *)
DXeLk[%%%%%%%%%%%%%%%%%%%%%%%%%(, / . ' *, (- (0 *(
:_\cj\X%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. 0 + + *( () (0 *(
TOTTENHAM 1
Kfkk\e_Xd%%%%%%%%%%%%%%%%%%%%%(. . - + ), )) * ).
9fckfe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. - / * *' )+ - )-
Jle[\icXe[%%%%%%%%%%%%%%%%%%%(. , 0 * )' (/ ) )+
E\nZXjkc\%%%%%%%%%%%%%%%%%%%%%%(. - + . ). )- ( ))
CHELSEA 1
C`m\igffc%%%%%%%%%%%%%%%%%%%%%%%%(. - + . )( )) $( ))
▲

9cXZbgffc%%%%%%%%%%%%%%%%%%%%%%%(- - + - )+ )0 $, )) FOOTBALL

N\jk9ifd%%%%%%%%%%%%%%%%%%%%(. - + . )+ )0 $, ))
Jkfb\%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. - * / )( )) $( )( BY JAMES GOLDMAN
9cXZbYlie%%%%%%%%%%%%%%%%%%%%%%(. - * / )) ). $, )(
8jkfeM`ccX%%%%%%%%%%%%%%%%%%%%%(. , , . (0 )/ $0 )' CHELSEA manager Carlo Ancelotti
<m\ikfe%%%%%%%%%%%%%%%%%%%%%%%%%%%(. * 0 , (/ )' $) (/ warned his Premier League rivals
9`id`e^_d%%%%%%%%%%%%%%%%%%%%(. * 0 , (. )' $* (/ that yesterday’s draw at Spurs sig-
=lc_Xd%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. ) (' , (- )' $+ (- nalled the end of the Blues’ blip.
N`^Xe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. * . . (* )/ $(, (-
Nfcm\j%%%%%%%%%%%%%%%%%%%%%%%%%%%%%(. + * (' (/ *' $() (, Roman Pavlyuchenko’s first-half
N\jk?Xd%%%%%%%%%%%%%%%%%%%%%(. ) - 0 (, *' $(, () strike looked likely to condemn the
EGFN<I:?8DG@FEJ?@G champions to a fourth league defeat
9Xiejc\p%%%%%%%%%%%%%%%%%(  ( J_\]]Lk[%%%%%%%%%%%%%%%%%%%'  ' in seven games, before substitute good reaction in the second-half. Chelsea looked anything but back into the game when Drogba’s angled
9i`jkfc:`kp%%%%%%%%%%%%'  ) ;\iYp%%%%%%%%%%%%%%%%%%%%%%%%%'  ' Didier Drogba benefited from a goal- “We had more strength, more pas- in a first-half largely dominated by drive slipped through Gomes’ hands,
9liec\p%%%%%%%%%%%%%%%%%% )  ) C\\[j%%%%%%%%%%%%%%%%%%%%%%%%%%'  *
:ipjkXcGXcXZ\%%%%%%%'  ' ?lcc%%%%%%%%%%%%%%%%%%%%%%%%%%%%%'  ' keeping howler by Heurelho Gomes sion, more determination and we the home side, who were unfortu- before the Brazil international
C\`Z\jk\i%%%%%%%%%%%%%%%%(  , ;feZXjk\i%%%%%%%%%%%%%%%%%%%(  ( with 20 minutes left. deserved to win. Our poor form is nate not to have more than redeemed himself with the penalty
D`[[c\jYifl^_%%%%%%(  ( :Xi[`]]%%%%%%%%%%%%%%%%%%%%%%%'  ' Drogba then missed the chance to behind, but we have a very big test Pavlyuchenko’s superbly crafted save which preserved a point that his
Efin`Z_%%%%%%%%%%%%%%%%%'  ' Gfikjdflk_%%%%%%%%%%%%%%%'  ) snatch all three points when he against Manchester United next.” 15th minute opener to their credit. manager, Harry Redknapp, claimed
Gi\jkfe%%%%%%%%%%%%%%%%%%'  ( @gjn`Z_%%%%%%%%%%%%%%%%%%%%%'  '
I\X[`e^%%%%%%%%%%%%%%%%%'  ' :fm\ekip%%%%%%%%%%%%%%%%%%%%'  ' struck an injury-time penalty too His skipper, John Terry, added: When Jermain Defoe zipped a as evidence of his side’s own title cre-
JZlek_fig\%%%%%%%%%%%%%%%%  G Efkkd=fi%%%%%%%%%%%%%%%%%%%%%%%  G close to Gomes, but despite that cost- “You can lose or draw games. I think pass in the general direction of his dentials.
ly error, Ancelotti felt Chelsea’s sec- the fans appreciate that, but when strike partner there appeared little He said: “We are as good a side as
KF;8PËJ;@8IP ond-half fightback signalled an end they don’t see the passion, that’s danger, but his first touch took him almost anybody. We can give any-
9XiZcXpjGi\d`\iC\X^l\
to their recent woes. what hurts. We could all admit away from two defenders and his body a game. We will only get
DXeLk[m8ij\eXc/gd %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% He said: “We didn’t lose confi- that’s been missing over the last few low shot gave Petr Cech no hope. stronger when our best players are
dence after the first-half. It was a weeks. We’re hopefully back now.” Chelsea were gifted a route back back from injury.”
SPORTS EDITOR FRANK DALLERES
email sport@cityam.com

Wenger surprised at Arsenal

Tevez has no prob-
lem with Mancini

Picture: ACTION
IMAGES

leading a tougher top flight

you can say exactly the reverse,” he LAST FIVE MEETINGS
MANCHESTER UTD said. “Last Monday night, two quality
teams – Aston Villa and Liverpool –

ARSENAL
met and both sides were in the bot-
tom half, so that opinion is not really
proven by concrete facts.
31 Jan 10
29 Aug 09
16 May 09
Arsenal 1-3 Man Utd
Man Utd 2-1 Arsenal
Man Utd 0-0 Arsenal
Prem
Prem
Prem
Tevez claims his beef is with City
“The whole Premier League is more
difficult for everybody and what you
5 May 09 Arsenal 1-3 Man Utd Ch Lg
hierarchy and not his manger
▲

FOOTBALL 29 Apr 09 Man Utd 1-0 Arsenal Ch Lg

BY FRANK DALLERES call mid-table teams and
bottom-table teams have
ARSENAL manager Arsene Wenger improved. Every single
leads his side into a match that will game today is a cup
five-year trophy drought last week.
Wenger (left) is set to make a late
decision on whether to include cap- FOOTBALL “I wish to clarify that I have no per-
▲

have a huge bearing on their title game for everybody.” tain Cesc Fabregas, who has been des- sonal issue with the manager Roberto
ambitions tonight in the firm belief United’s own title aspi- perately fighting to recover from a MANCHESTER CITY captain Carlos Mancini. The owner has been very
that winning the Premier League is rations ought to ensure persistent hamstring injury in time Tevez last night reiterated his desire generous with what he has offered to
tougher than ever. this evening’s clash for the showdown. Defenders to leave the club and turned the heat me. I would like to thank Sheik
The Gunners arrive at Old Trafford will be a fiercely Johan Djourou and Gael Clichy on the club’s hierarchy. Mansour for his understanding.”
top of the table but battle-scarred contested one, are also doubts. Tevez confirmed he had handed in Tevez also outlined his anger at
from four defeats, three of them at while extra spice “We are top of the table at a transfer request, which has been club officials who blame his long-
home, already this season. has been added the moment, and at the start flatly rejected, but revealed he has no term mentor, Kia Joorabchian, for his
To some observers, it is evidence to an already of the season if you had said personal gripe with his manager desire to seek a fresh challenge.
that standards at the top of the combustible we would lose four of our first Roberto Mancini. “I have not been influenced by any-
English game are slipping, but rivalry by 16 games, I would not have Tevez, currently on holiday in one else in making this decision,”
Wenger insists it merely proves how recent com- thought we would be top, that Tenerife, said: “I need to clear my said Tevez. “It is something I have felt
much those outside the top four have ments from is for sure,” Wenger added. head and think because this is an for some time. I wanted to leave in
improved. Old Trafford “The positive thing is that if important part of my career. My feel- the summer but was convinced to
“I don’t agree with the people who left-back Patrice we manage to add home consis- ings have not changed and it is regret- stay. I hugely resent the manage-
say that the overall quality of the Evra, who taunted tency to our away form, we will table that we have reached this ment’s suggestions that I have been
league is lower this season. In fact, Arsenal over their be very dangerous.” situation. unduly influenced by others.”
CITYA.M. 13 DECEMBER 2010 27

Gomes atoned for his

error by saving Drogba’s
late penalty
Hunt downs Blues Martin hangs on to claim title
Picture: GETTY WOLVES piled further misery on bot-
tom-of-the-table West Ham after their GOLF title, finishing two shots clear of It was 25-year-old Michael who

1-0 win over Birmingham left Avram
Grant’s struggling Hammers three
points adrift at the foot of the Premier
League. Midfielder Stephen Hunt stole
in at the near post to tap home Sylvan
Ebanks-Blake’s cross just before the
break to hand Mick McCarthy’s side a
crucial win. Bolton closed to within
just one point of fifth-placed Tottenham
after Stuart Holden’s dramatic late win-
ner gave Owen Coyle’s men a 2-1 victo-
ry over Blackburn.
▲
SPAIN’S Pablo Martin overcame a
back-nine blip to successfully defend
his Alfred Dunhill Championship at
Leopard Creek Country Club.
Having gone five shots clear at the
start of the back nine, the Spaniard
saw his lead reduced to one after a
triple bogey at the 17th.
But he held his nerve for a birdie
at the last for a third European Tour
South Africans Charl Schwartzel and started the day top of the leader-
Anthony Michael. board, but he fell away the closing
“Luckily I was able to hit some round, carding 73. But the former
good shots coming in, especially on professional baseball hopeful, who
18,” said Martin after his late wobble. joined the tour last year, was happy
“Normally, they throw people into with his week’s performance.
ponds and stuff. But I’m glad they He said: “It feels like a win for me,
restrained themselves today. I’m I’ve overcome a lot this week.
lucky because on 17 I made a big Emotions have been beyond any-
mess and just really lucky that every- thing I ever thought I could feel. It’s
thing went well in the end.” hard to put into words.”

CHELSEA’S SPOT-KICK WOE

Give the best in navigation :

PENALTY taking is certainly an area of
Chelsea’s game that could do with
working on. Here are three other
recent high-profile penalty calamities.

Dec 2009: Michael Ballack and Gael

Kakuta both miss as Chelsea go out of
the Carling Cup at the quarter-final
stage up at Blackburn.

Dec 2009: Shay Given stops Frank

Lampard’s late effort as Manchester
City hang on to claim a 2-1 win.

Dec 2009: Lampard becomes only the

third man to miss a penalty during reg-
ular time of an FA Cup final against
Portsmouth.

TOP FIVE
TEAM PLD W D L F A PTS
Arsenal 16 10 2 4 34 18 32
Man City 17 9 5 3 24 13 32
Man United 15 8 7 0 35 16 31
Chelsea 17 9 4 4 31 12 31
Tottenham 17 7 6 4 25 22 27

TRAFFIC
Wilkinson rolls back the years as Irish
slide to their sixth consecutive defeat
RUGBY UNION per cent kicker and we don’t. He is
Lifetime
▲

like a fine wine, he just gets better,”

LONDON IRISH head coach Toby
Booth compared Jonny Wilkinson to
a fine wine after the unerring boot of
the veteran Toulon fly-half put a huge
dent in their hopes of progressing in
the Heineken Cup.
England great Wilkinson kicked
four penalties and converted Rudi
Wulf’s try as the Frenchmen won 19-13
at the Madejski Stadium, inflicting the
Exiles’ sixth consecutive defeat.
Booth said of the No10. Irish must
win the return leg at the weekend to
have a chance of progressing from Stay alert to traffic jams, roadworks and delay times up ahead and find an alternative
Pool Three, after defeat left them route with Garmin’s lifetime traffic avoidance from Trafficmaster on these sat navs:
propping up the table.
Wasps kept the pressure on
Toulouse at the top of Heineken Cup
Pool Six with a 23-16 win over
Newport-Gwent Dragons.
Harlequins remained on track to
reach the Amlin Challenge Cup last Sa
tN
av Se mber 20
pte
1 0

“In a tight game they have a 100 eight with a 20-9 win over Connacht.
nüvi 1310T with Traffic and nüvi 1300T with Lane Assist nüvi 3760T slim, sexy and
Bluetooth, exclusively from: and ecoRoute, exclusively from: a Which? Best Buy
We can go unbeaten all tour, says Prior
CRICKET ing the brand of cricket we have been
▲

there’s no reason why we can’t.

PERSONALISE YOUR GIFT:

ENGLAND wicketkeeper Matt Prior
believes his side are displaying the
sort of qualities that will help see
them go undefeated for the entirety
of their Ashes tour of Australia
Prior’s unbeaten century helped
England secure a draw in a tour
match against Victoria at the MCG
and ensured their momentum
remained intact ahead of the third
Test which starts on Thursday.
Prior said: “You’d like to think we
can stay unbeaten. If we carry on play-
“It would be a fantastic feat – but
something we’re certainly targeting.”
Seamers Ajmal Shahzad, Chris
Tremlett and Tim Bresnan are in line
to replace the injured Stuart Broad in Download Elfred the snowman’s voice guidance, add festive vehicle icons or
Perth and Prior is sure any of the use Voice Studio to create your own seasonal directions at giveagarmin.co.uk
three are capable of stepping into the
Nottinghamshire man’s shoes.
He said: “They’ve all put their *Based on worldwide shipments for 2009 of mobile navigation devices reported by independent market analyst firm Canalys. Global leader in satellite navigation*
hands up, and I’m sure whoever gets
selected will do a great job. They all
did well here on a track that gave
them no help whatsoever.”
 ONS reveals 0.8% growth for Q3,
double the predicted rate.
Real amount of debt tumbles.
Gilt yields fall as markets Inflation returns to UK.
factor in the optimism.
UK debt servicing
costs fall.
Can sterling stay on
its feet? Take a position at
igindex.co.uk
The flood of money
Will George Osborne’s increases business credit
and mortgage lending.
spending cuts send sterling Will sterling
deflate?
down the tubes? Take a position at
igindex.co.uk
Bank of England steps in with
further quantitative easing.
Chance of Bank of England
using more quantitative
easing weakens.
20th October 2010 and the
full scale of George Osborne’s Does sterling
comprehensive spending strengthen?
review is revealed. Take a position at
igindex.co.uk
S&P revises UK to ‘stable’
from ‘negative’, affirms triple
Debt perceived to Will the FTSE
‘A’ credit rating. Fall in consumer
be under control. follow suit?
Take a position at confidence
Private igindex.co.uk causes retail
sector contracts sales to drop.
squeezed. Reduced tax revenue
plus increased benefit
claims inflate the UK
Will Gilt prices fall? deficit.
Take a position
at igindex.co.uk
But what’s the
reality for the FTSE?
Take a position
at igindex.co.uk
Investors fear a UK
Profits feel credit downgrade. Job loss fears prompt those
under pressure.
still employed to pay off more
As companies personal debt.
take a hit do shares
feel the blow?
Take a position at
igindex.co.uk
Predicted UK corporate Private sector layoffs add to estimated
tax revenue falls. 490,000 public sector redundancies.
Spread betting can result in losses that exceed your initial deposit.