Issue 1,308 Wednesday 26 January 2011

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EXCLUSIVE: HTC TO UNVEIL ARSENAL SEAL

FIRST FACEBOOK MOBILE WEMBLEY DATE
GUNNERS SECURE CARLING
DEVICE TO LAUNCH NEXT MONTH P7 CUP FINAL BERTH P30

KING: I WAS We’re committed to

helping half a million
children from street
to school.
But that’s only part

RIGHT NOT TO
of the picture.

RAISE RATES Fourth quarter

▲

UK ECONOMY
BY JULIAN HARRIS
GOVERNOR Mervyn King used a defiant
manufacturing up by

1.4%
speech last night to defend the Bank of
England’s record in the face of rising
inflation and a stumbling economic
recovery.
King’s speech came after shock fig-
ures – showing a 0.5 per cent contraction
in the UK economy for the three months
to December -- had rocked the markets.
The FTSE ended the day at 5,917.71, Fourth quarter
down 26.14 points or 0.44 per cent. And services down
the pound fell by 1.15 per cent against the
dollar and slumped 1.07 per cent against
the euro, a two and half month low.
Manufacturing grew in the fourth quar-
ter, the Office for National Statistics (ONS)
0.5%
said, but construction and services
dropped. The fourth quarter contraction
meant that GDP grew 1.4 per cent in 2010 Fourth quarter Fourth quarter
as a whole.
King insisted that the recovery would GDP down construction down
have been dented even further if interest
rates had been increased in recent
months. He also defended the coalition’s
austerity policy but predicted inflation of
four to five per cent, more than twice the
0.5% 3.3%
target.
He also warned that real wages would cal consolidation.” ed in the final quarter, the ONS said.
return to 2005 levels by the end of 2011 – Despite the shocking setback from yes- The coldest December in 100 years was
the first time since the 1920s that real terday’s GDP data, King stayed optimistic. responsible for a massive 0.5 per cent
wages had suffered such a reversal. “The UK economy is well-placed to decline in GDP, the ONS said.
“The squeeze on living standards is the return to sustained growth, Of course, New shadow chancellor Ed Balls
inevitable price to pay for the financial cri- there will be ups and downs as the squalls pounced on the figures, claiming that
sis,” he said. Monetary policy cannot alter from the world economy blow around us.” people had “altered their behaviour” in
the price of global commodities, he Other economists questioned the valid- anticipation of the impending cuts in
argued. “Nor can it alter the burden of ity of the GDP figures. “The ONS assess- public spending, harming economic
reducing our large budget deficit,” King ment is probably too downbeat -- it may growth. “Cuts which go too far and too fast
said, before appearing to attack the previ- have overestimated the weather hit to will damage our economy,” he said.
ous Labour government. December,” said Henderson’s Simon ALLISTER HEATH: P2
“The economy as a whole must deal Ward, dismissing talk of a double dip ECONOMICS: P4-5 youarethebigpicture.com
with the legacy of extraordinarily high recession. WEALTH MANAGEMENT: P24
debt levels built up prior to the crisis,” he After surprisingly fast growth earlier in
said, before endorsing the current govern- the year, the British economy -- excluding Certified Distribution
ment’s “credible medium-term path of fis- the effects of the severe weather -- stagnat- 29/11/10 till 02/01/11 is 98,444

FTSE 100 ▼ 5,917.71 -26.14 DOW ▼ 11,977.19 -3.33 NASDAQ ▲ 2,719.25 +1.70 £/$ ▼1.58 -0.02 £/¤ 1.15 ▼-0.02 ¤/$ ▲ 1.37 +0.01
 2 News
Don’t panic over disastrous GDP data
EDITOR’S LETTER
ALLISTER HEATH
MEA culpa. The dramatic extent of yes-
terday’s collapse in reported GDP took
me by surprise, though I realised a
couple of weeks ago that the slow-
down was sharper than previously
thought. That the data confounded
every professional forecaster polled by
news agencies, as well as the Bank of
England and all political parties, is
only a partial excuse.
So why did the ONS say that the UK
shrank by 0.5 per cent, led by construc-
tion and the snow? And crucially does
this imply a double-dip recession –
something I have long argued would
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WHAT THE OTHER PAPERS SAY THIS MORNING
RUSSIANS PREPARE FOR LISTING
SPREE IN LONDON
Four industrial and mining compa-
nies from Russia are set to list in
London within the next few weeks,
the first in a string of companies
from the country rushing to raise an
estimated $15bn-$20bn (£9.5bn-
£12.7bn) this year. The companies are
taking advantage of a narrow win-
dow before the state steps in with its
own capital raisings. Since the start
of the week, Hydraulic Machines &
Systems, Russia’s leading pump man-
ufacturer, and Koks, a pig iron and
coking coal group, have announced
price ranges for their upcoming list-
ings. Steel pipe maker Chelpipe is to
announce its range as early as today.
NEW VERSION OF IPHONE SET TO HAVE
“WAVE AND PAY” TECHNOLOGY
Apple is expected to install “wave and
pay” technology for the next version
not happen – or a largely weather-
related blip? We won’t know for sure
until we start getting January figures
– the first indication earlier this
month that there was a problem in
December came from the services pur-
chasing managers’ index, which
abruptly collapsed. If the survey
remains negative, we will be in trou-
ble; if not, then the fourth quarter will
turn out to be what I think it really
was – a bump in the road to recovery,
similar to those we always see in
upturns, exacerbated by our pathetic
inability to cope with snow.
Yesterday’s data was even more pre-
liminary than usual. The ONS admit-
ted that much of it was really
guesswork. I have long thought that it
would be better to wait a bit longer
before providing the markets (and
journalists) with absurd, incomplete
figures which are always revised
upwards, generally by about 0.2 per-
centage points. I well remember the
last shock, for the fourth quarter of
2009: the consensus was for growth of
BlackRock’s
profits soar
ASSET MANAGEMENT
▲
BY ALISON LOCK
PROFITS at BlackRock, the world’s
largest asset manager, soared 77 per
cent in the fourth quarter of 2010,
beating all expectations yesterday.
Higher hedge fund fees and
inflows into its exchange-traded fund
business generated earnings of
$670m (£419m), or $3.42 per share, up
from $379m, or $2.39 per share, in
the same period in 2009.
The result far outstripped analyst
forecasts of $2.90 per share and show
BlackRock consolidating its perform-
ance after a year in which first-quar-
ter results missed expectations and
the second quarter was dogged by
fears over low fee income and out-
flows of capital.
BlackRock, which bought Barclays’
US investment arm for $15bn in 2009,
of its iPhone, boosting mobile com-
merce and potentially giving the
company a big piece of the multibil-
lion-dollar transaction industry.
REAL ESTATE FUND PRIMED FOR
FLOTATION
The UK’s first listed real estate mezza-
nine finance fund is being lined up
for flotation later this year to target a
growing funding gap in the debt-con-
strained property market. Duet
Private Equity is in talks with
investors about backing the listed
investment vehicle that will buy and
originate property-backed debt.
CALA CALLS IN ROTHSCHILD TO
REVIEW STRATEGY
Cala Group, the bank-held house-
builder, has called in Rothschild to
put together a business plan, paving
the way for debt reduction and a pos-
sible sale. The move could herald a
directional shift by housebuilders
under the auspices of the banks.
0.4 per cent – the first estimate came in
at just 0.1 per cent. In the end, however,
the data was revised up to 0.5 per cent.
This is an almost scandalous indict-
ment of current data release practices
and proof that yesterday’s data should
be taken with a bucket of salt.
Even more than the overall figures,
the composition of growth is always
revised drastically. When one looks at
third quarter 2010 numbers in detail,
one soon realises that the components
have completely changed. All the early
analysis produced by the City and the
media turned out to be worthless.
Business surveys, even for December,
do not indicate anything like as much
weakness in GDP as the ONS reports.
The ONS thinks that without the
snow there would have been zero
growth – I suspect that the end result
will be to show that the underlying
expansion was a little better than
that. Another sign of relative strength:
government revenues rose to £39.3bn
in December compared to £37.8bn the
previous year; clearly, despite the
has $3.6 trillion of assets under man-
agement despite another huge capi-
tal outflow in the past quarter.
Net fund inflow was $23.9bn
excluding $38.7bn in withdrawals
from clients that had held accounts
with both Barclays and BlackRock
before the merger and did not want
all their funds to stay with one firm.
“Away from merger-related out-
flows, new business was robust,” chief
executive Laurence Fink said. “We
believe merger-related outflows are
largely behind us.” BlackRock shares
closed up 2.29 per cent at $198.01.
BlackRock chairman
and chief executive
Laurence Fink says
new business was
robust
MOD LAUNCHES ASSAULT ON COSTS
WITH INQUIRY INTO CONTRACTS
The Government will announce the
first big review of its relationship
with monopoly suppliers in more
than four decades today as it tries to
save taxpayers’ money. The review
will be led by the Ministry of Defence,
which spends about £9bn a year with
companies on a non-competitive
basis. Equipment such as nuclear sub-
marines can usually be bought only
from a single supplier, so contracts
have to be negotiated without the
benefit of competitive pressure to
keep costs down.
GROSVENOR DECIDES SHARE OF QUID
IS TOO TEMPTING
The Duke of Westminster’s property
company has swooped on €350m
(£303m) of shopping centres being
sold by one of Europe’s biggest listed
property groups.
reversal of the VAT cut, this means the
economy didn’t collapse. Yet it would
be wrong to deny the existence of a
slowdown: parts of the economy clear-
ly paused for breath, probably from
November, the weak employment fig-
ures suggest.
As the EEF points out, in the few
years following the recession in the
1980s quarterly growth rates oscillated
between -0.7 per cent and 1.5 per cent.
Up until the third quarter of 2010,
growth coming out of the recession
was faster than in the 1980s or 1990s.
GDP is now 2.2 per cent higher than it
was at the end of the recession – a
weaker recovery than in the 1980s but
a stronger one than the 1990s. The gov-
ernment should stick to its austerity
plans, which did not cause yesterday’s
supposed slump and which are the
only way to prevent a sovereign crisis.
It is not (yet) time to panic or predict a
new recession – but you will be the
first to know if I change my mind.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Minister for employment relations Ed Davey
Voluntary rules for auditors
REGULATION
▲
BY ALISON LOCK
GOVERNMENT minister Ed Davey
told a House of Lords inquiry yester-
day that moves to make the “big four”
auditors less dominant in the market
should be voluntary before more reg-
ulation is tried.
Davey, minister for government
relations, said “demand-side” meas-
ures to help mid-sized audit firms to
grow should take precedence over
regulation to improve competition.
HIGH HEATING OIL PRICES SPARK
OFFICE OF FAIR TRADING INQUIRY
Consumer complaints about high
prices for heating oil this winter have
led the Office of Fair Trading to
launch inquiry into the UK’s domestic
market. Around six per cent of house-
holds rely on heating oil, many in
remote areas away from mains sup-
plies. The watchdog said it would
investigate heating oil and liquefied
petroleum gas (LPG) suppliers, who
provide energy to 2.5m people not
connected to the gas grid.
WORRYING GROWTH FIGURES DASH
HOPES FOR JOB RECOVERY
Finding a job in today’s desolate
labour market is about to get much
harder. Yesterday’s disappointing
growth figures send a very worrying
signal to the 2.5m people already out
of work, let alone those about to be
made redundant.
CITYA.M. 26 JANUARY 2011
NEWS | IN BRIEF
BofA’s Merrill settles SEC fraud
Bank of America’s Merrill Lynch unit yes-
terday agreed to pay $10m (£6.3m) to
settle US Securities and Exchange
Commission charges that it fraudulently
misused customer orders so it could trade
for its own benefit. The SEC claimed
Merrill used the order information to
place proprietary trades on a desk it no
longer operates. The SEC also accused
Merrill of charging hidden trading fees to
institutional and wealthy customers.
Merrill did not admit any wrongdoing in
agreeing to settle the case.
Airbus and Boeing trade blows
Airbus and Boeing traded blows yester-
day ahead of a final World Trade
Organisation ruling on claims Boeing
received subsidies, in a tit-for-tat case
brought by the European Union over
similar US claims against Airbus. An
Airbus spokeswoman said in a state-
ment that the report would confirm
Boeing got “massive illegal subsidies”
from research grants. A spokesman for
Boeing said illegal European subsidies to
Airbus which the WTO has already iden-
tified in a previous case “dwarf” those in
the counter-suit.
Pictures: PA
He said the government was very
concerned about competition in the
audit market but did not want “heavy
handed” rules such as the European
Commission proposal to force compa-
nies to change auditors .
The Lords is investigating whether
Deloitte, Ernst & Young, KPMG and
PwC stifle competition in the UK,
where they audit 99 per cent of
the FTSE 100.
Davey added that the government
saw no need for a pan-European regu-
lator of auditors.
SIEMENS'S PROFIT RISES ON
ECONOMIC RECOVERY
German industrial conglomerate
Siemens yesterday said its net profit
in the first quarter rose 16 per cent
from a year earlier, as it benefited
from a recovering global economy
and increased spending on big-ticket
items. Munich-based Siemens, a
barometer for the world’s manufac-
turing industry with around 410,000
employees in 190 countries and prod-
ucts that span hospital equipment to
power turbines, posted a net profit of
€1.72bn (£1.09bn) for the quarter
ended 31 December, up from €1.48bn
a year earlier.
GOLD SLIPS TO 3-MONTH LOW
Gold futures fell to a three-month
low yesterday as investors continued
looking for a bottom amid the
metal’s ongoing correction. It was the
metal’s lowest close since 27 October.
CITYA.M. 26 JANUARY 2011
IRISH GOVERNMENT SCRAPS 90 PER CENT BANK BONUS TAX PLAN
Osborne set
to scale back
Merlin plan
▲
POLITICS
BY DAVID CROW
GEORGE Osborne is planning to water
down his flagship peace deal with
British banks, in a desperate bid to
push through an agreement before
UK bonuses are announced next
month.
The chancellor had originally
hoped to convince banks to agree 10
per cent more business loans this year
than they did in 2010, as part of the
so-called Merlin plan which will see
the government cease attacks on bank
remuneration in exchange for higher
lending.
But City A.M. understands the
Treasury is now working on a scaled-
back plan that will see banks increase
business lending by more than GDP
plus inflation.
According to the Office for Budget
Responsibility, GDP will grow by 2.1
per cent this year while inflation will
increase by 2.8 per cent.
That would mean banks would only
have to increase business loans by
more than five per cent, although
inflation – which is consistently above
target – is likely to be much higher.
However, the new agreement is like-
J&J gloomy EU’s bailout
after sales fall bond a success
▲
PHARMACEUTICALS
US health giant Johnson and Johnson
(J&J) reported a gloomy outlook for
2011 after its fourth-quarter profit was
hit by a 5.5 per cent decline in sales.
Fourth-quarter profit fell 12 per
cent to $1.9bn (£1.2bn), from $2.2bn
in the same period in 2009, while
sales revenue fell to $15.6bn from
$16.5bn a year earlier.
It has struggled to recover from a
series of product recalls on its over
the counter medicines and is con-
cerned about the weak global econo-
my. J&J’s sales for the year were down
0.5 per cent at $6.1.6bn, while US
sales were down 4.7 per cent.
News 3
IRISH finance min-
ister Brian Lenihan
Nielsen prices IPO
up on high demand
(pictured, left) yes-
terday admitted its
plan to tax bank
bonuses at 90 per
cent may not be
enforced. He said
“immense legal dif-
ficulties” meant the towards cutting Nielsen’s $8.6bn debt
▲
FUNDRAISING
plan may be left BY ALISON LOCK pile.
out of the finance The ambitious IPO is the first major
bill now being fast- TELEVISION ratings firm Nielsen New York listing of 2011 and the
tracked through priced its $1.6bn (£1bn) initial public biggest private equity IPO since Spirit
parliament. offering above the expected range yes- AeroSystem’s $1.65bn offering in
The bill must be terday on the back of higher demand. 2006. Nielsen was bought out for
passed by Friday to Private-equity owned Nielsen sold $10m in 2006 by a consortium of
allow an election 71.4m shares for $23 each, above the firms that included Carlyle,
next month. planned price of $20 to $22, as well as Blackstone and KKR among others.
Picture: PA $250m worth of subordinated bonds. JPMorgan and Morgan Stanley
All the proceeds are expected to go were lead underwriters for the deal.
ly to see banks lend less than the
chancellor had originally hoped, and
gives them more wriggle-room should
growth and demand be lower than
expected.
The Treasury still expects
Santander to agree to new lending tar-
gets, although it will do so under a
separate agreement rather than sign-
ing up to the Merlin plan.
The Spanish bank – which owns
Bradford & Bingley and Alliance &
Leicester – doesn’t want to be part of a
deal on bonuses, when most of its UK
operations don’t receive a significant
pay-out.
The Merlin deal, which was expect- Some of our investments
ed to be agreed this week, has been aren’t meant to make a profit.
delayed by a number of factors,
including anti-trust considerations Kali lives in one of Delhi’s worst
that prevent UK banks sharing infor- slums. Put to work as a small
mation on their plans for business child scavenging rubbish, the
lending. pittance she made went on
The recent appointment of Labour’s
Ed Balls as shadow chancellor has also abusing correction fluid. There
thrown a spanner in the works. was no time or money for school.
Osborne is expecting his new oppo-
nent to scrutinise any agreement Now Kali’s life is changing with
more closely that predecessor Alan the help of Street to School, an
Johnson, and wants to ensure the Aviva project that gets street
terms of the deal are watertight children into education. She
before it is made public.
attends a local centre where
she’s gradually being prepared
for full-time school.
Over the next five years, we’re
committed to helping half a
million children like Kali. She
may never be an Aviva customer,
but we think she’s a great
investment all the same.
EU ECONOMY
THE debut bond issue for the EU’s
bailout fund yesterday was nine times
oversubscribed in an unprecedented
success for the bloc.
All €5bn (£4.29bn) of the five-year
bond on offer was snapped up, with youarethebigpicture.com
Asian investors fuelling demand.
The Japanese government alone
bought more than 20 per cent of the
issue, which is perceived as the safest
of EU bonds and offered a higher
yield that German Bunds.
The AAA bond’s yield was 2.89 per
cent, compared with 2.31 per cent for
Bunds. The EU closed the order book
yesterday with demand at €44.5bn.
 4 Focus on GDP fall CITYA.M. 26 JANUARY 2011

ANALYST VIEWS: SHOULD WE TAKE THE GDP

FIGURE AT FACE VALUE? Interviews by Alison Lock

ANDREW GOODWIN | ERNST & YOUNG ITEM CLUB

“ We find it difficult to believe the economy is really

as weak as these figures suggest. This view quite simply
does not square with what survey indicators are telling us.

”
The ONS has little hard data to base this first release on, so
we see the prospect of some major revisions.

PHILIP SHAW | INVESTEC

“ The ONS’ estimates for services look strangely soft

and out of kilter with firmer survey evidence and relatively
robust retail sales figures. We are of the view that today’s

”
GDP numbers should be taken with a pinch of salt – but they
increase uncertainty over the economy.

MICHAEL SAUNDERS | CITI

“ We suspect that the economy’s underlying momentum

in the fourth quarter was nothing like as weak as the head-
line drop in GDP implies. The UK produces GDP figures earli-
December snow was
heavily blamed for
the economic setback

”
er than most other countries, and has a tendency to revise Picture: REUTERS
the figures quite sharply. The same may happen again.

Weather blamed for

0.5 per cent GDP fall
UK ECONOMY “Such estimates are generally monthly series based on separate
▲

BY JULIAN HARRIS
THE British economy shrank by
half a per cent in the final three
months of the year, official data
showed yesterday, despite econo-
mists on average expecting an
expansion of up to half a per cent.
The decline was largely blamed
on the crippling effects of
December’s snowstorms, which
knocked half a per cent off the
country’s GDP, according to the
Office for National Statistics (ONS).
But the effect of the weather and
the economic slip up may have
been overstated, according to some
economists.
“The ONS has hardly covered
itself in glory in recent years with
its first estimate of quarterly GDP,”
said Ian Harwood of Evolution
Securities.
subsequently revised, and often
very substantially,” he added.
And the ONS admitted: “the
effect of the bad weather is the best
we can make it at this stage, but is
still inevitably uncertain.”
Economic progress would have
been “flattish” irrespective of the
severe weather, the ONS suggested.
The construction industry plum-
meted by 3.3 per cent, it found,
while the UK’s service sector also
shrank by half a per cent.
Yet the results are “at odds with
what the monthly purchasing
managers’ index (PMI) surveys have
been saying,” Harwood argued.
“The composite PMI surveys
[which measure economic activity]
have run above 50,” he said.
All index scores above 50 indi-
cate economic growth.
“It is possible to construct a
data for industrial, construction
and services output,” added
Henderson’s Simon Ward.
“This calculation reveals that the
average level of GDP in October and
November was 0.1 per cent higher
than in the third quarter. In the
absence of the bad weather, GDP
would probably have risen in
December,” Ward claimed.
And Ward believes the effects of
the weather have been overestimat-
ed in the data. “The December esti-
mate probably relied on
information for the early and mid-
dle parts of the month when dis-
ruption was most severe.”
And the recovery should
rebound in the first quarter of this
year, economists expect. “The eco-
nomic recovery is probably pro-
ceeding at a moderate pace,” Ward
added.

ANALYSIS l Recovery from recession has been bumpy before, says Henderson’s Simon Ward
108
Pre-recession peak = 100

2008 recession 1979 recession

104
Start of
Recession 1973 recession 1990 recession

100

96

Source: Henderson
90
-4 -2 0 2 4 6 8 10 12 14 16 18
Quarters
CITYA.M. 26 JANUARY 2011 Focus on GDP fall 5

Why I was right to predict a GDP contraction

CITY COMMENT
ANDREW LILICO
TODAY’S GDP figures took almost
everyone by surprise. The snowfall
obviously added uncertainty to the
December numbers, but this was
expected to show in later revisions.
Instead, underlying output was softer
than thought, and the Office of
National Statistics chose to make an
early guess at a large negative effect
of the bad weather.
But we probably shouldn’t have
been as surprised as we are. We knew
the service sector was contracting
even in October, well before the snow.
And I and others had for some time
been forecasting the likelihood of a
quarter of contraction in GDP in
either the last quarter of 2010 or first
quarter of 2011, because every reces-
sion since quarterly records began
has involved at least one in the
recovery phase.
This quarter’s contraction has little
to do with the coalition’s spending
cuts – yet. The key drivers of the fall
were construction, and business serv-
ices such as consultants or outsourc-
ing. But the VAT rise this month
could cause another quarter of con-
traction to start 2011.
It’s very important now that the
government does not backtrack on
the spending cuts. What has been
announced is already barely adequate
and “rear-loaded”, so many of the cuts
do not take effect for some years.
On tax rises, matters can be a little
more flexible if needed. The VAT rise
is already done, but with the Budget
coming up there is the option of rais-
ing the income tax threshold a bit
more than expected. That shouldn’t
be done just on the basis of a bad sta-
tistic because of a bit of snow, but if
the first three months of 2011 contin-
ue to look weak, income tax cuts
should be an option.
I and others have been urging more
quantitative easing for some time,
and this GDP contraction strengthens
our case. Inflation is well above target
and will go higher: Citi has forecast
CPI of five per cent, and I am still less
sanguine – I think it likely to reach six
per cent in 2012. That means we will
have to raise rates very aggressively
from the end of 2011 into 2012, poten-
tially to above 5.25 per cent to keep
CPI inflation to only a six per cent
peak. But that is next year’s story.
It’s quite normal to have a quarter
or two of contraction at this point in
a recovery from a recession. It would
have been a surprise not to see it
after as deep a recession as in 2008/09.
But from the middle of 2011, bar-
ring calamities, I believe we will see
very strong investment-driven growth.
For now, we should not panic, but
we should be flexible where appropri-
ate – on QE and on taxes.
Dr Andrew Lilico is a director at econom-
ic consultancy Europe Economics.

Data corrections to
deficit figures offer “ WHAT COULD
BE SIMPLER THAN
hope for Osborne
the deficit for the financial year up to
▲

UK ECONOMY
BY JULIAN HARRIS December is £118.4bn, down from

DOWNWARD revisions to government
deficit figures for November, and a fall
in the deficit for December, will reas-
sure chancellor George Osborne that
he is on course to hit his targets for the
financial year.
Government borrowing dropped to
£16.8bn in December, it was revealed
yesterday, considerably below the fore-
casts of economists who expected a fig-
ure closer to £20bn.
And public sector net borrowing
(PSNB) for November was revised down
by £2.2bn, to £21.1bn.
“If current trends are replicated over
the whole fiscal year the deficit would
come in around £146bn, meaning that
chancellor Osborne would modestly
undershoot his target of £149bn,” said
Howard Archer of IHS Global Insight.
The figures suggested that govern-
ment finances might be gradually
coming under control; December’s
PSNB was down by £4.2bn against the
same time in 2009.
Excluding financial interventions,
”
£126.8bn in the final year of the
Labour administration.
However, government borrowing
levels are “still hefty,” Archer said.
SPREADS?
In November the Office for Budget
Responsibility (OBR) slightly reduced
its forecast for the year’s deficit to
£148.5bn, on the back of improved eco-
nomic data.
“This should at least provide the
NOTHING.
Treasury with a crumb of comfort on a
very difficult day,” commented Nida
Ali of the Ernst and Young Item club.
“November’s surge in government
spending appears to have been a one-
off,” she said.
Government revenues were boosted
by a year on year increase in VAT
receipts of nearly nine per cent. Even
allowing for the VAT rise, this “sug-
gests greater consumer activity in
December than other sources have
reported,” Ali added.
Yesterday also marked the first time
that the government’s investment in
banking groups RBS and Lloyds TSB
were included in the data.

Ed Balls admits double

dip recession is unlikely
POLITICS appointing,” although used a newspa-
▲

BY RICHARD PARTINGTON per column to suggest the snow had

POLITICIANS on all sides downplayed
the likelihood of a double dip recession
following the shock fall in economic
output announced yesterday.
Shadow chancellor Ed Balls said peo-
ple had already “changed their behav-
iour in anticipation of what’s coming
in the future” and said: “I don’t think
[a double dip] is the most likely out-
come.”
However, Balls said the economy was
now feeling the impact of the coali-
tion’s austerity measures.
“The fact is cuts which go too far and
too fast will damage our economy,” he
said.
Chancellor George Osborne admit-
ted the GDP figures were “obviously dis-
severely impacted economic growth at
the end of last year.
He said: “The coldest December on
record had a much bigger impact on
the economy than anyone had fore-
cast.”
The impact of the severe weather
was, however, downplayed by
Commons Treasury Select Committee
member Chuka Umunna. He tweeted:
“Even accounting for the snow today’s
ONS figures show the Conservative led
government has no policies for
growth – a government of bystanders.”
But Osborne yesterday insisted the
government would maintain its cur-
rent economic approach.
“We cannot afford to be blown off
course by bad weather,” he said.
 6 News CITYA.M. 26 JANUARY 2011

WHAT THE TWO SIDES SAY

The Cloud wi-fi
Hunt delays Ofcom’s analysis is deficient. The
network is
decision on deal will have minimal impact
on consumers and would not
enhance News Corporation's
ability to influence the news
target for Sky

▲
MEDIA

News Corp bid News Corp alleges that Ofcom

did not have an open mind
BY STEVE DINNEEN
SKY is on the brink of snapping up wi-
fi hotspot provider The Cloud in a
deal analysts say could be worth
around £100m.
when considering the issue of Sky is desperate to compete with
▲

MEDIA
BY STEVE DINNEEN
CULTURE minister Jeremy Hunt has
stalled his decision over the future of
News Corp’s £7.8bn bid for Sky.
Hunt says he will give News Corp
more time to prove its bid will not
have an adverse affect on media plu-
rality before referring it to the
Competition Commission.
Media watchdog Ofcom has filed a
report highlighting its concerns over
the bid, which it recommends is
investigated by the Competition
Commission. News Corp is desperate
to avoid this scenario, which will
delay by at least six months its bid for
the 61 per cent of the broadcaster it
does not already own.
Hunt was accused of showing bias
towards Rupert Murdoch’s organisa-
tion, despite saying he still plans to
refer the bid to the Competition
Commission.
A furious Sky yesterday accused
Ofcom of bias in its assessment of the
bid. The watchdog responded with a
strongly worded statement reading:
“We absolutely stand by our report
which is a rigorous, thorough and
independent assessment of the
issues. News Corporation’s response
makes a series of assertions of pur-
ported errors by Ofcom in its report.
“Specifically, News Corp alleges
that Ofcom did not have an open
mind when considering the issue of
plurality. This allegation is without
foundation.” Hunt has not given a
date for his final decision but is
expected to decide within the next
month. MURDOCH AT DAVOS: P15
ANALYSIS l B Sky B
760
p 752.00
25 Jan
740
720
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
plurality. This allegation is
without foundation.
TIME LINE | TWISTS AND TURNS OF THE BID
June 2010: News Corp bids for the
61 per cent of Sky it doesn’t already
own. News Corp shares jump four per
cent despite the £7bn offer. The bid is
swiftly rejected by the Sky board
who say the firm is worth more.
July 2010: The two sides hold meet-
ings to discuss the value of the firm.
No further bid is made and the firms
decide to put talks on ice until regula-
tory approval is given to a potential
bid.
September 2010: Business secretary
Vince Cable, who has jurisdiction over
the bid, asks Ofcom to draft a report
advising whether the Competition
Commission should become involved.
October 2010: UK media companies
including the Telegraph and the
Mirror release a joint statement con-
demning the bid.
December 2010: Cable is caught in a
sting by reporters, bragging about
“going to war” with Rupert Murdoch.
January 2011: His replacement
Jeremy Hunt delays final decision to
give News Corp time to file evidence.
rival BT, which offers its subscribers
free access to its Openzone wireless
network covering most of the coun-
try.
The Cloud has around 22,000
hotspots across the UK and gives
access to its network for £6.95 a
month. The Cloud and Sky both
declined to comment.
Meanwhile telecoms firm O2 is to
launch its own wi-fi platform in the
UK. The firm says the ambitious proj-
ect will offer double the number of
hotspots owned by BT and The Cloud
combined by 2013.
It says access to the network will be
available for free to customers of any
mobile or broadband provider.
It says the hotspots will appear in
“shops, restaurants, retail outlets and
outdoor and indoor locations across
the UK”.
O2 also says it will increase its
investment in its mobile network by
25 per cent this year. Mobile carriers
are desperate to improve their net-
works to cope with the spike in data
usage by smartphones.
CITYA.M. 26 JANUARY 2011 News 7

Yahoo profits up on cost cuts Misys says it is on track

as it battled rivals such as Facebook fell 12 per cent to $1.53bn, from
to meet full-year targets
▲

TECHNOLOGY
and Google that have mastered the $1.73bn a year earlier.
YAHOO more than doubled its fourth- art of making money from online It was also downbeat on the out-
quarter earnings year-on-year yester- adverts. look, forecasting net first-quarter its full-year target of 30, although he

day following cost-cutting measures,
but revenues fell as it struggled to
make online advertising pay.
The search firm made net fourth-
quarter income of $312m (£197.3m)
or 24 cents a share, up from $153m,
or 11 cents a share, in the same peri-
od the previous year, it reported yes-
terday.
But net revenue fell four per cent to
$1.20bn, from $1.26bn a year earlier,
Revenue from display adverts rose
16 per cent before costs, but revenue
from search adverts fell by 18 per cent
before costs, the company said.
California-based Yahoo said search
revenues dipped due to its revenue
share deal with Microsoft, which
routes all search-based adverts
through the software firm’s plat-
form. Total revenue, which included
the amount it shared with Microsoft,
2011 revenue of $1.02 to 1.08bn,
below analyst forecasts of $1.13bn.
•The results are in sharp contrast to
the record earnings announced by
Google last week. Yahoo’s earnings
boost was achieved through cost-cut-
ting measures including redundancies
and it said it would cut a further 600
staff. Google has said it will recruit a
record number of staff this year, beat-
ing 2007’s level of 6,000 hires.
▲
TELECOMS
SOFTWARE firm Misys said yesterday
it saw a gradual return to growth in
banking, helped by demand for its
new Bankfusion platform and the
closing of delayed deals that kept rev-
enue flat in the first half.
Chief executive Mike Lawrie said 13
customers had bought Bankfusion in
the six months to November, taking
the total to 26, well on track to meet
said the wider demand environment
was cautious.
Misys, which focuses on banking
and treasury and capital market
(TCM) software after it sold most of its
stake in its Allscripts-Misys last year,
reported revenue of £161m and oper-
ating profit of £23m for its first half.
Shares in the group, which have
risen by 55 per cent in the last 12
months, fell 2.95 per cent.

Facebook to TECH NEWS | IN BRIEF

Mark Zuckerberg
will take his first
steps into hard-
ware with a
Facebook phone.
Psion hit by forex losses
Psion forecast a normalised operating
loss for the full-year, hurt by forex loss-

launch first es, but said it remained confident of

strong growth in 2011. Shares of the
company fell five per cent in trading yes-
terday. The provider of mobile comput-
ing services expects a normalised
operating loss of £1.5m to £2.5m for the

mobile phone WILL YOU BUY THE NEW FACEBOOK PHONE?

Interviews by Richard Partington
full-year, compared with an operating
profit of £4m last year.

Ericsson sees sales surge 7pc

Surge in demand for mobile smart-
phones pushed Sony Ericsson to a seven
per cent rise in fourth quarter sales. Its
call or email friends from informa- TRISTAN SWINDELLS | RFIB GROUP revenue soared to 62.8bn crowns
▲

EXCLUSIVE
BY STEVE DINNEEN
HTC will unveil two new Facebook
branded mobile phones next month,
City A.M. has learned.
The Korean manufacturer will
launch an official tie-up with Mark
Zuckerberg’s $50bn (£31.6bn) social
network at the Mobile World
Congress event in
Barcelona.
The high-end smart-
phones will be the first to
bear the Facebook branding
and colours. It could look
similar to the mock-up pic-
tured right, also created by
HTC.
It is understood the
phones will run on a
tweaked version of Google’s
Android operating system
and will prominently display
users’ Facebook messages and
news feed on the home screen.
Other areas of integration
expected include being able to
tion stored on their Facebook page.
Facebook has aggressively pushed
mobile versions of its social network
and industry insiders see this as an
attempt to consolidate its position as
the world’s leading social network.
Facebook’s Joe Hewitt (who
worked on the Firefox web browser)
and Matthew Papakipos (a leading
member of the Google
Chrome browser team) are
thought to be behind the
launch.
It is unclear if the phone
will be tied to a single carri-
er in the UK.
The phone will draw
comparisons to Google’s
Nexus range, also manu-
factured by HTC. City A.M.
exclusively revealed the
new version of the
phone, the Nexus S,
would be sold in the UK
through an exclusive
deal with Carphone
Warehouse.
(£6bn), beating forecasts but its 8.4bn
crowns profit lagged behind predictions.
“No I don’t think so, I’m happy with my cur-
rent phone. I could see the appeal for younger Nokia to launch MeeGo tablet?
Nokia, the world’s biggest handset man-
people. It might be a success with them, but ufacturer by volume, may be on the
verge of revealing its first tablet com-
not for my generation.” puter. Industry sources say the firm has
developed a device featuring the new
MARTIN MALONEY | MG CAPITAL version of its operating system, MeeGo.
News Corp iPad paper to launch
“I’m not too sure actually, I’d have to see how it News Corp's new digital newspaper The
goes and see how the market receives it. I’ve Daily, designed for Apple's iPad, should
launch in the next two weeks after some
heard that Android is getting good reviews, so delays and will cost 99 cents a per week,
it could be good. Everyone loves a gimmick.” executive James Murdoch said yesterday.
The digital-only publication, available initially
only in the US, is News Corp's latest attempt
HANNAH RUBIE | HAYWARD AVIATION to force consumers to pay for its journalism.
“No, it feels a bit tacky. The success of it would BBC World Service makes cuts
The BBC World Service is to close five of
depend on the way it’s advertised. You want to its language services. It is thought that
about 650 jobs will be lost from a work-
do more than just Facebook with a phone and force of some 2,400. Staff will be
I don’t know if I could trust it.” informed today of the redundancies.
 The Capitalist
8 CITYA.M. 26 JANUARY 2011
EDITED BY
STEVE DINNEEN
GOT A STORY? EMAIL
thecapitalist@cityam.com

HEDGE FUND “The biggest

MANAGERS
GET A VERY
RAW DEAL
HEDGE fund managers rightly feel they
are being persecuted by creeping EU leg-
islation, which is suffocating their indus-
try.
But Hugh Hendry, a Scottish fund
manager at Eclectica Asset Management,
may be suffering from a touch of hyper-
bole. In the latest issue of Bloomberg
Markets he likens the plight of the hum-
ble hedgie manager to the persecution of
gypsies under Nicolas Sarkozy in France.
Hendry, who is often referred to as the
most high-profile Scot in the hedge fund
business, came into the public eye when
he railed against government bailouts.
His appearance on Newsnight was
notable for his rant against the “social-
ists I meet when I travel first class”, who
blame the hedge fund industry for the
woes of countries like Greece needing to
be bailed out.
DOUBLE DIP
Coinciding with the gloomy news that
the economy has retracted 0.5 per cent in
the fourth quarter, The Capitalist received
an unwanted gift in the post yesterday.
Commercial foreign exchange firm
Hugh Hendry likens the hedgie manager’s plight to French persecution of gypsies Picture: REUTERS
Moneycorp decided to celebrate the UK’s
anniversary of exiting recession by
reminding us how bad it all was... with a
packet of Double Dip sherbet.
The chemical treat was accompanied
by an equally depressing note reading:
“Celebrations are marred by concerns
around impending spending cuts, infla-
tion data and the possibility of a double
dip recession.
“The MPC pinned hope on a weak
pound leading to an export recovery but
2011 looks a daunting prospect with a
number of unanswered questions...”
The biggest worry though, is the sub-
liminal message the sherbet treat sent.
There was one extra bag free; does that
make it a triple dip? At least if the econo-
worry is the
subliminal
message.
There was
one extra bag
free; does
that make it
Either the rumours of the economy’s
a triple dip?” death have been greatly exaggerated, or
these guys know something we don’t
and they are stocking up on all the good
booze to drown their sorrows.
ON THE PISTE
Pub chain JD Wetherspoon prides itself
my does collapse all over again, The on its modest prices and for catering for
Capitalist can get a nice big sugar all sorts.
high. But staff at its flagship Marble Arch
watering hole got more than they bar-
gained for yesterday when in loped a
STOP WINE-ING towering, shaggy-haired customer with
If financial armageddon is nigh, it his right arm in a sling and addressing
isn’t showing in Hong Kong. staff as if he owned the place.
A wine auction over the week- The customer eventually proved to
end by Sothebys and Acker, be none other than Wetherspoon’s
Merrall & Condit raised a stag- millionaire chairman Tim Martin
gering $25m, with 100 per cent making an impromptu visit.
of the lots being snapped up. And as for his cast-enclosed arm?
Prices ranged from market Martin was heard muttering some-
prices to 30 per cent premiums thing about an accident but no expla-
(although this is relatively conser- nation was otherwise forthcoming.
vative compared to the extraordi- But suspicions are high that he
nary Lafite sale of last year). might have been on the piste.

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CITYA.M. 26 JANUARY 2011
From NHS nurse to AIM star
▲
PROFILE
BY MARION DAKERS
SERIAL entreprener Kate Bleasdale
stands to lose more than her job if
HCL flatlines – she has amassed
more than 18 per
cent of HCL’s shares
through her per-
sonal stake and
holding company
Healthmark UK.
Bleasdale gradu-
ated as a nurse
in 1983 but
KATE BLEASDALE
PZ Cussons in
share drop as
costs surge
▲
CONSUMER
BY JOHN DUNNE
PZ CUSSONS yesterday saw its shares
plummet by more than nine per cent
as it warned that the year ahead
would be tough due to rising costs.
The maker of Imperial Leather
reported a 3.4 per cent rise in first
half pre-tax profit which disappoint-
ed some analysts.
However, a poor performance in
Europe has been partially offset by
relatively healthy Asian markets, in
the six months to 30 November. In
the UK the company was hit by tough
comparative figures after its Carex
anti-bacterial gel sales were boosted
by a swine flu outbreak.
“Against such a backdrop, we do
harbour concerns that our 2010/11
EBIT (earnings before interest and
tax) forecast of £115.7m – which
requires 23 per cent growth through
the (second) half, may prove too
much of a challenge to deliver,” said
Shore Capital analyst Darren Shirley.
Shore cut its full-year pretax profit
forecast to £111m from £116.3m and
said it was considering reviewing its
‘buy’ rating on the company’s shares.
Hornby trains Profit at Games
slowed by snow Workshop down
▲
RETAIL
MODEL train maker Hornby, which
also owns Scalextric and Airfix, has
warned its profits will be below fore-
casts after sub zero temperatures hit
Christmas sales.
It said that the lower-than-expected
sales in the festive season meant
stores were unlikely to order as much
fresh stock in the next few weeks.
The company expects its pre-tax prof-
its in the year to 31 March 2011 to be
below current market expectations,
December’s severe weather meant
fewer shoppers braving the elements,
leaving retailers struggling to meet
sales targets.
News 9
Healthcare Locums suspends
stock after accounting issues
left the NHS in 1987 to found
recruitment agency Match
Healthcare, which had revenues
of £185m by the time Bleasdale
was dismissed in 2001.
She filed a sex discrimination
claim against chairman Sir Tim
Chessells, and hit headlines in ularities” that mean its profits will be in September.
▲
PUBLIC SECTOR
2002 when she walked away with BY MARION DAKERS far below market expectations of However, the firm continued to
a £2.2m payout. £25m this year. make acquisitions including the
Bleasdale used the money to MEDICAL staffing firm Healthcare Bleasdale, who is executive vice £77.8m purchase of an Australian
start rival recruiter Healthcare Locums yesterday suspended its AIM- chairman, and chief financial officer healthcare firm, which was funded by
Locums in 2003, which floated on listed stock and two of its top staff Diane Jarvis will be suspended pend- a National Australia Bank loan.
AIM in 2005 with the help of while it investigates accounting irreg- ing the outcome of the probe. The firm appointed Jefferies
nominated adviser Fairfax IS. ularities. It is understood that the police are International to join Fairfax IS as joint
She was named entrepreneur Healthcare Locums, which was set not involved in the investigation. corporate broker in September.
of the year at the 2008 AIM up by serial entrepreneur Kate Healthcare Locums has lost 25 per The company restated its 2009
Awards. Bleasdale in 2004, has begun an inves-
tigation into “serious accounting irreg-
cent of its share value since it blamed
public spending cuts for poor results
results last March to reflect a new
accounting policy.
PZ Cussons chairman Richard
Harvey said that tough trading condi-
tions and rising raw material prices –
particularly of palm oil which it uses
in many of its products – meant the
company remained cautious going
forward.
The FTSE 250 listed company,
which also owns Original Source,
Charles Worthington and The
Sanctuary spa range, saw a five per
cent fall in European operating prof-
its to £23.7m. But Asian operating
profits jumped to £8.6m from £6.1m
in the same period the year before.
And total group sales were up 1.3
per cent to £374.8m, delivering pre-
tax profits that were flat at £44.5m.
ANALYSIS l PZ Cussons
410 p 352.60
25 Jan
400
390
380
370
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
RETAIL
GAMES Workshop – which sells the
Warhammer series – yesterday said
inexperienced staff failed to keep its
tills ringing during the summer, trig-
gering a 15 per cent fall in pre-tax
profit to £6.7m for the six months to
November.
Mark Wells, chief executive of the
table-top war games maker, said: “We
made some changes to our staffing.
We had inexperienced managers and
we were a bit flat-footed.” Sales in the
six months were down four per cent
at £60m. The store usually has games
being played in-store to explain the
rules to customers.
 10 News CITYA.M. 26 JANUARY 2011

F&C fights back

Boparan buys A FRIENDLY NEW FACE FROM LLOYDS
ANDY Briggs,
pictured, was at Sherborne as
up Northern
named the next
chief executive of
pensions provider
Friends Provident
sees assets rise
yesterday. Briggs,
currently head of

Foods shares
general insurance ASSET MANAGEMENT

▲
at Lloyds
Banking Group, UNDER FIRE F&C Asset Management
takes over from delivered a blow in the fight to sup-
Trevor Matthews, press rebel shareholder Sherborne
who will step Investors yesterday, after it posted
back to become increased assets under management
vice chairman as (AUM).
▲

M&A
BY MARION DAKERS
BOPARAN Holdings built up its stake
in takeover target Northern Foods to
11.4 per cent yesterday, after several
large shareholders sold their stakes
for Boparan’s 73p per share offer
price.
Boparan, which made its takeover
bid on Friday night, said in a state-
ment it had snapped up 22.4m shares
to bring its total to 53.3m.
Boparan also confirmed that
Northern shareholders registered on
7 January will receive a 1.55p interim
dividend as planned by Leeds-based
Northern last year.
One bank understood to have sold
at least some of its stake in Northern
is Lloyds Banking Group, which last
week declared an interest in 6.9 per
cent of the Leeds-based convenience
foods maker.
Lloyds also holds a small stake in
Greencore, the Irish food firm that is
working to sweeten its all-share merg-
er plans for Northern.
Evolution Securities analyst Alex
Sloane said Greencore would likely
need to raise substantial funds, possi-
bly through a rights issue, to finance
a rival to Boparan’s all-cash bid.
He added that Boparan is unlikely
to match the cost synergies offered by
Greencore, estimating £10m to £15m
per year savings compared to
Greencore’s £40m.
Boparan, which is run and owned
by Ranjit Singh Boparan, specialises
in producing chicken products for
supermarkets.
Shares in Northern foods edged
upwards to close at 74.25p yesterday,
a gain of 0.34 per cent. Shares in
Greencore also gained to close 1.58
per cent higher at €1.16.
FAST FACTS | NORTHERN FOODS
● Leeds-based Northern Foods produces Fox’s
biscuits, Goodfella’s pizza and ready meals.
● In November, Northern announced an all-
share merger with Greencore, the maker of
Weight Watchers meals, to create Essenta Foods.
LUCA FERRARI
GOLDMAN SACHS
RANJIT Boparan hired Goldman Sachs
and Rothschild to advise on his efforts
to take over Northern Foods.
Goldman Sachs partner and manag-
ing director Luca Ferrari leads the
team working for Boparan at the bank.
He has a history of high-flying media
deals, including advising Telefonica dur-
ing its £18bn takeover of mobile net-
work O2 in 2005, but also has M&A
he is eager to
return to his
native Australia
in the next
three years.
experience in insurance and industry.
Also on the Goldman team is Nick
Harper, who last year helped Betfair
float on the London market and in
2006 worked for Boots during its
£13bn merger with Alliance UniChem.
Gilberto Pozzi, another Goldman
partner working for Boparan, worked
on one of the world’s biggest mergers
when Arcelor and Mittal joined forces
in 2006.
The Rothschild bankers include head
of hotels and leisure, Avi Goldberg,
who once advised Northern Foods.
Kevin Ramsden, who currently sits
on Boris Johnson’s social housing task-
force, and Premier Foods adviser
Robert Plowman make up the rest of
the Rothschild team.
The firm’s board said strong net
inflows last year showed its strategy to
steer the company away from years of
underperformance was working.
F&C increased AUM to £105.8bn at
the end of last year, compared to
£97.8bn the year before, with net busi-
ness inflows of £3.7bn over 2010 after
four years of net outflows.
Chairman of F&C Nick MacAndrew,
who has faced calls from Sherborne to
step down, said the rebel shareholder
had “contributed nothing” to any of
the company’s progress.
He said: “Sherborne is simply look-
ing to benefit from the hard work the
current board and F&C staff have done
to improve the group’s performance
and create value for all shareholders.”
Investors will decide next week in
an extraordinary general meeting
vote, tabled by Sherborne, whether to
replace MacAndrew and director Brian
Larcombe with the activist investor’s
representatives.
Sherborne said yesterday it was
“fully aligned” with the interests of all
F&C shareholders.
CITYA.M. 26 JANUARY 2011 News 11

BA’s brand can only stand strikes for so long

ceptions of the airline, now part of ash cloud stopping all air travel in out of the troughs it so frequently with perceptions virtually unaltered
International Airlines Group (IAG). the UK for days, but another strike a falls into. in other countries such as the US
Back in the autumn of 2009 BA month later again saw perceptions The good news for our national and Germany.
had an impressions score in the high quickly drop and then rebound to a airline is that the strikes are barely Stephan Shakespeare is founder and chief
20s. Then came the announcement high of 19 before the December snow registering outside of this country executive of YouGov.
of strikes over the Christmas period completed a miserable year for BA.
and by the turn of the year that score So what does this pattern tell us? ANALYSIS l International Impressions ANALYSIS l British Airways Impressions
was -18. BA is a brand that is very susceptible 40 40
BRANDINDEX Those strikes were declared illegal to bad publicity and perceptions are 30
UK Germany US
30 UK
and did not happen, the BA score badly hit by the strikes, but it is also
STEPHAN SHAKESPEARE started to rebound and had reached a very resilient brand with a strong
20 20
19 before a second ballot saw new legacy and an ability to recover 10 10

W
ITH BA cabin crew once strikes – which this time did go quickly. 0 0
again voting to support ahead – and the score dived again to The speed of recovery however has -10 -10
industrial action, we’ve had 15. slowed with the most recent strike
-20 -20
a look at the impact that Once again the rebound was swift, leading to questions about how 2009/ 2010/ 2010/ 2010/ 2010/ 2011/ 2009/ 2010/ 2010/ 2010/ 2010/ 2011/
the strikes have had on public per- and interestingly unimpacted by the many more times BA can drag itself 10/01 01/01 04/01 07/01 10/01 01/01 10/01 01/01 04/01 07/01 10/01 01/01

NEWS | IN BRIEF
Regal takeover deadline extended Ortac raises its gold estimates
Regal Petroleum shareholders have been
given until 7 February to accept a £77m
takeover offer from Energees
Management, the firms said yesterday.
Investors representing 2.79 per cent of
Regal’s capital have already accepted the
24p per share offer, though rival Pinchuk
has said it is preparing to bid 25p per
share. Energees said it now has the green
light from anti-monopoly watchdogs.
AIM-listed gold explorer Ortac Resources
said yesterday its reserves in a Slovakian
mine are over 40 per cent more than
thought. The Kremnica gold mine is now
thought to contain around 1.1m ounces
and Ortac said it will now ramp up work
to bring the project into full production.
But the shares plunged 21 per cent to
2.2p as the update disappointed
investors hoping for a more lucrative find.

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 12 News
Spanish bank input
below expectations
BANKING
▲
BY RICHARD PARTINGTON
SHARES in Spain’s banks slipped
yesterday after the Spanish govern-
ment refused to inject the antici-
pated level of capital into the
country’s ailing institutions.
Finance minister Elena Salgado
accelerated the recapitalisation of
Spain’s savings banks with a fur-
ther €20bn capital injection.
She said the government contri-
bution would “in no way exceed
€20bn (£17bn)”, leaving the private
sector to generate the remainder of
the funds.
It’s going to take more than €20bn
SPAIN is running out of time to
rescue its ailing banking sector.
That’s why we expected economy
minister Elena Salgado to come
up with a recapitalisation plan
that went the whole hog.
But the €20bn package out-
lined late on Monday night is sim-
ply too small: it is little wonder
that Spanish banks fell across the
board yesterday, as investors
digested the government’s mealy-
mouthed policy response.
Analysts at RBS reckon the real
cost of recapitalising the Spanish
banks is around €50bn, on top of
the €14bn already committed by
@
ANALYSIS l BBVA
@
10.0 €
8.82
25 Jan
-90
-80
MORE NEWS -70
ONLINE AT
www.cityam.com 25 Oct 12 Nov 2 Dec 22 Dec 11 Jan
She added that the banks would
be required to boost core Tier 1 cap-
ital ratio to eight per cent, one per
cent higher than strict new Basel
III levels.
The fresh injection comes on top
of €15bn already spent by the gov-
ernment on recapitalising banks,
from both its Fund for Orderly
Bank Restructuring (FROB) and a
deposit guarantee fund.
Analysts at Barclays Capital wel-
comed the recapitalisation as a
“step in the right direction,” yet
raised concerns over the adequacy
of the government investment.
Analyst Antonio Garcia Pascual
the state-backed Fund for Orderly
Bank Restructuring (FROB).
For Spain’s domestic-only
banks, the situation looks dire.
Based on the assumption that the
banks will be stressed according
to the parameters set by the 2009
US Federal Reserve test, RBS says
that Banesto needs an extra
€5.7bn to withstand a financial
shock in 2011.
That is a staggering 127 per
cent of its market capitalisation.
Bankinter needs €2.7bn (117 per
cent of its market cap); Popular
€7bn (110 per cent); and Sabadell
€5.3bn (102 per cent).
ANALYSIS l Banco Santander SA
800 752.00
€ 25 Jan
750
700
650
600
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
CITYA.M. 26 JANUARY 2011
said: “While the attempt to seek a
private sector solution is welcome,
in our view under current market
conditions it is unlikely that many
of the weak saving banks will man-
age to raise the needed funds in
the market.”
Analysts at RBS had estimated
the Spanish government needed to
inject €64bn in total in order to
insulate the banks from risk, some
€35bn short of the combined
amount now pledged by the state.
Share prices fell yesterday at
Bankinter by around 4.8 per cent,
Banco Popular by 1.8 per cent and
Banco Sabadell by 2.7 per cent.
Things are markedly better for
the more diversified banks,
Santander and BBVA, which need
an extra €17bn and €10.4bn
respectively – less than a quarter
of their market cap.
Of course, these estimates show
just how inept the Spanish gov-
ernment’s plan is, even if it does
go some way towards higher capi-
tal levels in the banking sector.
Investors should sell off Spanish
banks while they can.
BOTTOMLINE
Analysis by David Crow
ANALYSIS l Banco Popular
4.8 €
4.32
25 Jan
4.4
4.0
3.6
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
CITYA.M. 26 JANUARY 2011
American consumer confidence jumped last month, according to the US Conference Board
US mood rises
despite house
prices falling
▲
US ECONOMY
BY JULIAN HARRIS
HOUSE prices in the US fell for a fifth
consecutive month in November, a
well regarded survey revealed yester-
day.
However, there was better news for
the US recovery as official data
showed consumer confidence hitting
a seven-month high in January.
The US Conference Board said its
index of consumer sentiment
jumped to 60.6 this month, from 53.3
in December.
However, despite improving eco-
nomic news, a double-dip in home
prices could be confirmed by spring,
according to the Standard & Poor’s/
Case-Shiller index, which measures
single family house prices in 20
American cities. The index fell by half
a per cent in November, following a
one per cent drop in October.
While disappointing for the hous-
ing market, the drop was less than
expected by many economists.
Sixteen out of the twenty cities
recorded a drop in November, with
the biggest falls in Detroit (-2.3 per
cent), Atlanta (-1.7 per cent) and
Chicago (-1.6 per cent).
India ups rates BoJ trims its
to beat inflation GDP forecast
▲
ASIA ECONOMY
INDIA’S reserve bank raised the repo
rate at which it lends to banks by
0.25 per cent to 6.5 per cent yesterday,
in a bid to clamp down on resurgent
inflation.
The central bank also raised its
inflation forecast for the end of the
fiscal year in March to seven per cent
from 5.5 per cent. Markets reacted to
the inflation forecast, which could be
read as a hint towards more interest
rate hikes. The Bombay stock
exchange’s Sensitive Index (Sensex)
closed 0.95 per cent down at 18,969.45
points. The increase in key rates was
the seventh since March.
Economics 13
You worked hard
for your money
NEWS | IN BRIEF You shouldn’t have to
work even harder to get
German consumers are upbeat the best exchange rates
Germany’s relentless recovery received
another boost yesterday, as consumer
confidence figures showed yet a further
increase. The household confidence
index is expected to rise to 5.7 next
month. The level for January was
revised up to 5.5 from an initial estimate
of 5.4, following six months of increases.
“Even the first wave of German austeri-
ty measures could not stop optimism,”
said ING’s Carsten Brzeski.
French car scheme boosts sales 020 7801 9080
French consumption of manufactured worldfirst.com
goods rose 0.6 per cent in December
compared to November, boosted by the
final weeks of a government subsidisa-
tion scheme for car purchases. The rise
Picture: REUTERS was nonetheless above forecasts.
Another survey released yesterday,
the FHFA index, recorded month-on-
month price stagnation in November.
Yet prices fell by 4.3 per cent com-
pared to November 2009, it said.
“We expect softness to persist in
the near term as home prices contin-
ue to face headwinds from the large
pipeline of foreclosures entering the
market,” commented Theresa Chen of
Barclays Capital.
“However, we expect some of the
decline to be offset by increased hous-
ing demand.”
Prices were 1.6 per cent lower than
in November 2009.
“While prices held a bit better than
expected, they are only 1.2 per cent
above their crisis low in May 2009,
before the homebuyer tax credit start-
ed to distort sales and prices,” said
ING senior economist Teunis Brosens.
“In eight of the 20 cities, prices are
even below the spring 2009 level,” he
said.
In spring last year many buyers
rushed to beat the end of the home-
buyer tax credit.
After the surge, demand collapsed,
Brosens said. “The housing bubble
has left scars that will remain visible
for years,” he said.
ASIA ECONOMY
THE Bank of Japan revised up its infla-
tion forecast yesterday, a move that
reflects the impact of recent rises in
commodity prices.
Consumer price index (CPI) infla-
tion will reach 0.3 per cent in the
next financial year, it said.
“However, the Bank could not be
expected to say that inflation will
remain negative as this would admit
failure on a key policy objective,” said
Julian Jessop of Capital Economics.
Interest rates were kept at virtually
zero, while GDP forecasts for the next
financial year were revised slightly
down to 1.6 per cent from 1.8 per cent.
 14 Focus on Davos
Heading for the economic heights
DISCUSSING THE
ROAD TO FUTURE
PROSPERITY NOW
ANDREW MOSS
GROUP CHIEF EXECUTIVE, AVIVA
O
UR business is about securing the long-term financial
futures of our customers: providing prosperity and peace
of mind. And our relationships with customers are endur-
ing – potentially lasting 50 or 60 years through the sav-
ings and retirement phases of their lives.
As a leading insurer, with 53m customers, we’re at Davos to
join in some of the biggest topics up for discussion: rebuilding
trust in financial services and tackling the savings gap.
More than any other issue, the question of savings links the
big macroeconomic and political debates of our time with the
specific and everyday concerns of every individual. It links high
politics with culture and psychology; local markets with global
economic imbalances. It affects our livelihoods, our political
debate and the development of society worldwide.
We need a change in attitude towards saving, and for it to be
reconnected to the idea of prosperity, both for the individual
saver and for those that use their capital to create wealth.
With that in mind, Aviva recently convened the Future
Prosperity Panel – in partnership with the Economist
Intelligence Unit – bringing together experts in behaviour
change, economics and policy to look at ways of bringing about
a step-change in attitudes towards savings. We’ll be publishing
new thinking on the subject later this year.
The image of savings has not been helped by the turmoil that
has sapped confidence in markets and financial services. Part of
our discussions this week in Davos must focus on reintroducing
the concept of prudent saving to customers who may have lost
faith in that process.
The Future Prosperity panel is chaired by the Economist’s
capital markets editor, Philip Coggan, and brings together nine
leading thinkers. It will use insights from business, behavioural
economics and public policy to consider new approaches to
improve prosperity around the world.
Davos tweets ...
@davospulse 3.36pm
“As the attendees start flowing into town, google party
still sounds like the hot ticket. 'It's got music” #WEF
#davos
@WmShaw 3.45pm
“Plato's cave theory: you hold the conf in Switzerland,
you walk out of the hotel, 'Hey, things look pretty
good, see you next year” #Davos
RT @FTDavos 12.30am
“Biggest theme at Davos is whether east is dominant
sphere in economics – or is it a cyclical blip? #Davos”
@inkhead 01.00am
“Queue the elitism. Soon come tue Davos 2011
tweets. Rich people and celebrities partying.” #Davos
Davos leaders
fear surge in
unemployed
DAVOS 2011
BY JULIET SAMUEL
GLOBAL unemployment will be at the
top of the agenda at Davos this year,
with one official of the World
Economic Forum warning that the
biggest danger for 2011 is the possibil-
ity of a “jobless recovery”.
The warning comes as the
International Labour Organisation
(ILO), a UN body, announced yester-
day that worldwide unemployment
has stayed stubbornly high at 205m
during 2010. The ILO also forecast
that the number will fall by less than
one per cent during 2011. The figure
means that there are now 27.6m
more people without jobs than in
2007 before the crisis hit.
Delegates at Davos will discuss the
threat of ongoing joblessness this
morning at an event entitled: “The
West isn’t working”, held by
Manpower, an employment consul-
tancy and main sponsor of the WEF.
Jeffrey Joerres, chairman and chief
executive of Manpower, will blame
western educational systems for not
being “aligned with the needs of the
Cyber security global threat
TECHNOLOGY
▲
BY JULIET SAMUEL
A BREAKDOWN in cyber security is
now one of the five major risks facing
the global economy, according to
World Econmic Forum founder Klaus
Schwab.
A WEF report released as a preview
to discussions planned at the confer-
ence this week highlighted cyber
attacks and the possibility of “all-out
cyber warfare” as a major threat. “We
are now living in a completely digi-
talised world and a completely glob-
alised world,” said Schwab, pointing
to the impact of Wikileaks revela-
CEO confidence in outlook
is near pre-crisis levels
WORLD ECONOMY
▲
BY ELIZABETH FOURNIER
COMPANY bosses are in a positive
mood about economic growth over
the next year, with confidence levels
amongst chief executives almost back
to the levels seen in 2008.
Of 1,201 executives polled by
accountants PricewaterhouseCoopers,
48 per cent of respondents are “very
confident” about their company’s
prospects for growth over the next 12
months – a sharp climb from last
year’s figure of just 31 per cent.
The Annual Global CEO Survey,
launched at the World Economic
CITYA.M. 26 JANUARY 2011
world of work”.
“Industry and educational institu-
tions must work together more con-
structively and governments need to
target funding in the right areas,” he
says. “Companies, governments and
educators all have a responsibility to
get this right.”
World leaders are particularly nerv-
ous that stubborn unemployment
could combine with skyrocketing
commodity prices to create condi-
tions ripe for widespread civil unrest.
President Barack Obama has come
under heavy fire ahead of his first
State of the Union address for failing
to boost job creation: US unemploy-
ment currently stands at 9.4 per cent.
Europe is in even worse straits. And
the economist Nouriel Roubini, who
is due to speak at a CNBC breakfast in
Davos this morning, has warned that
the UK in particular has a “whiff of
stagflation” about it, saying it is
“already double dipping while infla-
tion is rising.”
Youth unemployment in the UK is
already on a par with general unem-
ployment in Spain, with both now at
20 per cent.
tions as an example of the potential gramme that aims to bring together
disruption. technology entrepreneurs from
In line with the focus on the world around the globe.
economy’s vulnerability to technolo- The programme gives awards to 31
gy breakdowns, this year’s conference technology start-ups and invites them
features a tech-heavy agenda. Senior to the forum to give their leaders a
figures from Google, Infosys chance to network and exchange
Technologies, Cisco Systems, ideas. William Brindley, chief execu-
Microsoft and Spotify are among the tive of tech social enterprise NetHope,
many guests and Google’s invite-only will also tell Davos delegates that tech
“nightcap” or drinks party on Friday is key to the aspiration of “shared
is being touted as this year’s hottest norms” at the heart of the forum’s
ticket. agenda.
In an attempt to provide a counter- “The pace of change and technolog-
part to the many doom and gloom ical innovation is great, but it should
forecasts this year, the conference is be thought of as part of the solution,
also hosting a “tech pioneers” pro- not just a problem,” he says.
ANALYSIS l How confident are you of
60
Percentage
your company's prospects
for revenue growth?
stating ‘very
confidence’
40
Forum last night, also showed that
executives on the search for sustain- 12
able growth were increasingly turning 3 Years
to emerging markets, with 92 per cent
expecting growth in their Asian opera-
tions compared to just 48 per cent con-
fident of the same in Europe.
It means that executives based in 20
developed markets are increasingly
looking further afield for opportuni-
ties to expand their businesses. “Any
industrial company – if they’re going
to be a global leader – has to have a
large presence in emerging markets,”
said Ed Breen, chairman and chief
executive of US-based industrial con- Source: xxxx
0
glomerate Tyco International. 2005 2006 2007 2008 2009 2010
In
association
with
CITYA.M. 26 JANUARY 2011 Focus on Davos 15

Clockwise from far

left: A sole sniper
guards the world’s
elite at the main
Davos conference
centre; US airline
pilot Chesley
Sullenberger III
speaking yesterday
urged politicians to
think long-term;
Rupert Murdoch
cancelled his visit to
Davos to personally
lead negotiations
with culture secre-
tary Jeremy Hunt
over the buyout of
Sky and PwC chair-
man Dennis Nally
said that chief exec-
utives’ confidence
levels were now
close to that of
before the recession

US growth to accelerate
ANALYSIS l Western Government Debt
120
Debt to
GDP %

yet Europe still vulnerable

80
WORLD ECONOMY largest economy.
▲

BY JULIAN HARRIS However, it was less positive on Russia's President

EUROPE needs to strengthen its finan-
cial rescue fund to reduce the risk of
renewed global instability, the
International Monetary Fund (IMF)
said yesterday.
But US tax cuts and buoyant emerg-
ing economies are helping propel the
recovery elsewhere, the IMF said in its
world economic outlook, published at
the start of the summit in Davos.
The IMF revised up its forecast for
US growth to three per cent this year, a
sharp increase from the 2.3 per cent
forecast in October for the world’s
other advanced economies, keeping
its Eurozone forecast at 1.5 per cent
and raising Japan slightly to 1.6 per
cent.
“The slow growth prospects of
advanced economies and the contin- 40
ued weakness in their fiscal balances
have raised the market’s sensitivity to
debt sustainability risks,” the IMF said
yesterday.
Emerging economies, such as China
and India, were expected to keep up
brisk growth, although the IMF noted
inflation pressures rising, particularly
from high food and energy prices.
Dmitry Medvedev (left)
and France’s President
Nicolas Sarkozy asre
both at Davos. Pic: PA
UK
Euro area events ...................................
US
DAVOS: WEDNESDAY 26 JAN
l From 3.30 - 4.30, delegates will be
0
Source: IMF and Haver Analytics l The World Economic Forum Annual attending the opening reception in the
2005 2006 2007 2008 2009 2010 Meeting 2011 runs until Sunday 30 Congress Hall.
January. Davos is one hour ahead. All
times are given here in UK l The opening session takes place from

Obama to freeze US spend Hero calls for

time. 4.30 - 6.

l Today’s morning l Dinner is served from 7 - 9.

long-term plans
programme begins
at 8.00 - 9.15, with l The official blog is at:
update sessions for http://www.forumblog.org/
US ECONOMY
▲

Senate Republican leader Mitch delegates.

BY ALISON LOCK McConnell rejected Obama’s cuts as l The official Twitter feed is
simply freezing in place the extraordi- l “World Economic @Davos #WEF.
▲

US PRESIDENT Barak Obama yesterday
endorsed a five-year freeze on discre-
tionary government spending to help
bridge the yawning US budget deficit.
The call, made as part of his State of
the Union address, excluded spending
on security, medical aid or social
security – but included all other
domestic spending.
The US is approaching its current
$14.3 trillion (£9 trillion) borrowing
limit and while lawmakers can vote to
extend it, pressure is growing on
Obama to offer a plan to cut spending
significantly.
nary increase in spending since 2008.
The party has proposed that public
spending should be reduced to 2008
levels and is keen to cut up to $100bn
from non-security spending.
The US deficit is expected to reach
$1.4 trillion this year, up from $1.3
trillion in 2010, from an overall 2011
b u d g e t
of $3.8 trillion. Obama struck a deal
with Republicans at the end of 2010
to pass a finance bill extending an
$858bn programme of tax cuts dat-
ing from George W Bush’s tenure as
president.
DAVOS
THE US pilot who safely landed a
plane carrying 155 passengers on the
Hudson River yesterday urged politi-
cal and business leaders in Davos to
look beyond short-term results to
deliver long-term benefits.
Chesley Sullenberger III, former US
Airways pilot, was speaking at the
World Economic Forum as chief exec-
utive of Safety Reliability Methods.
His sessions “Leadership under
Pressure” and “Exploring the
Extremes” are both fully subscribed, it
was revealed last night.
Brainstorming”
takes place from 9.30
- 11.00.
l There are further updates
and an IdeasLab session from 9.45 - 11.00.
l The opening buffet is served from 11.00
- 12.30.
l Afternoon update sessions and brain-
storming then resume until 2.
l Brainstorming is followed by update
and IdeasLab sessions until 3.30.
l Events can be watched
online:
http://www.livestream.com/worlde-
conomicforum
l The Open Forum Davos also runs in par-
allel to the World Economic Forum, from
27-29 January.
l This year’s Open Forum theme is
“Recognition, Discussion and Change”.
Unlike the World Economic Forum, this is
open to the general public. Videos of
events will be posted on YouTube.
CITYA.M. 26 JANUARY 2011
CITY MOVES | WHO’S SWITCHING JOBS
Moelis & Company
Moelis & Company has appointed
Alexandra Oldroyd to the firm as a
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com
Bric countries boost
profits at Siemens
TELECOMS
▲
BY HARRY BANKS
SIEMENS, Europe’s biggest engi-
neering conglomerate and a
German bellwether, beat profit
forecasts due to robust demand in
emerging economies and said
signs for future sales were strong.
Like most of its German peers,
Siemens relies heavily on exports
of manufactured goods to China,
Brazil, India and Russia to power
growth, profiting from infrastruc-
ture investment in those coun-
tries.
Huawei sues Motorola over sale of unit
TECHNOLOGY
▲
CHINA’S Huawei Technologies has
filed a lawsuit to block Motorola
from selling one of its business
units to Nokia Siemens Networks,
demanding that the $1.2bn (£760m)
deal be altered to avoid infringing
on intellectual property rights.
Nokia Siemens is seeking regula-
BEST OF THE BROKERS
ANALYSIS l Aberdeen Asset Management
230 p
219.40
210 25 Jan
190
170
25 Oct 12 Nov 2 Dec 22 Dec
ABERDEEN ASSET MANAGE-
MENT
Morgan Stanley rates the fund manager “buy” with a target price of 137p. While
“overweight” and has lifted its target
price to 260p. The broker has also raised ture of the Burford’s chairman, it believes
its earnings per share forecast by four
per cent on higher margin equity inflows, thanks to its $200m cash pile. It expects
and views the shares as attractive due to an average return on investment of 27
strong global equity reach and reduced per cent, providing the firm continues to
drag from fixed income.
RSM Tenon
The seventh largest accountancy firm has
named accountant Peter Musgrave as head of
its enlarged London office. RSM Tenon has
brought together teams from four offices into
the central London location in Chiltern Street in
the West End and created a 450 strong team
covering all the Group’s services. Peter previ-
ously ran the RSM Tenon’s Wigmore Street
office and now heads the largest office within
the group, dedicated to the London market.
managing director based in London.
She will advise clients in the consumer
industry with a particular focus on the
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
Siemens and steelmaker
ThyssenKrupp have also benefited
from emerging economies’
appetite for German luxury cars,
high-end engineering machinery
and industrial equipment.
Net profit from continuing oper-
ations -- which exclude units
planned to be spun off -- rose 17
percent to €1.79bn (£1.54bn) in the
quarter, beating an average fore-
cast of €1.47bn.
“Orders and revenue grew in all
regions, particularly in emerging
markets,” Siemens chief executive
Peter Loescher said, referring to
tory approval in China for its agree-
ment to buy Motorola’s network
equipment unit. Huawei wants the
deal to exclude any equipment
based on widely-used GSM and
UMTS technology standards.
Huawei alleged a possible
infringement of intellectual proper-
ty rights by Motorola in a lawsuit
filed in the US District Court for the
ANALYSIS l Burford Capital
120 p
119.50
119 25 Jan
118
117
116
14 Jan 25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
BURFORD CAPITAL
Espirito Santo rates the dispute financier
the broker was surprised by the depar-
the firm has an advantage over others
invest.
To appear in Best of the Brokers email your research to notes@cityam.com
News 17
Edited by Elizabeth Fournier in association with
food and beverage sector, working provider of the Child Trust Fund and since 2006. Clementi is currently
closely alongside Benoit Renon, man- affordable tax-exempt savings plans chairman of Kings Cross Central and a
aging director in the firm’s European especially for children, since 1992. The director of The Royal Opera House. He
consumer practice. Oldroyd joins from AFM is a trade body that represents was previously chairman of Prudential
Barclays Capital where she was a 57 mutual insurers, friendly societies and was deputy governor of the Bank
managing director and pan-European and other financial mutuals in the UK of England from 1997 to 2002. He has
beverages analyst. and is tasked with enhancing the also been chief executive of Kleinwort
importance and value of mutuals with- Benson.
AFM in the UK’s financial service sector.
The Association of Financial Mutuals Jones Lang LaSalle
[AFM] has hired John Reeve, chief World First Jones Lang LaSalle has appointed
executive of Family Investments, as its Sir David Clementi, former deputy Robert Mayhew as regional director in
new Chairman. Reeve takes over from governor of the Bank of England, Sir its valuation advisory team in London.
Mike Yardley, who stepped down as David Clementi, is to become chairman Robert is relocating from Jones Lang
chief executive of Royal London last of the board of directors of foreign LaSalle Russia and CIS where he has
year. Reeve has been chief executive of exchange brokers, World First. He has been the head of strategic consulting
Family Investments, the leading been senior advisor to the company and valuation since late 2006.
+44 (0)20 7557 7245
morganmckinley.com
NEWS | IN BRIEF
Amgen acquires BioVex Asian boost for Intl Ferro
Amgen has agreed to buy BioVex, a closely International Ferro Metals said sales of
held maker of experimental cancer drugs, ferrochrome more than doubled in its sec-
for up to $1bn (£633m). An initial payment
of $425m will be made, and as much as
$575m in milestone payments.
Biovex is a privately held, venture-funded,
biotechnology company headquartered in
Woburn, Massachusetts.
ond quarter on strong Asian demand for
the stainless steel ingredient. Chief execu-
tive David Kovarsky put the growth down
to the company building good relationships
in Asia that have focused on higher-value
markets.
the company’s first quarter to end-
December.
Shares in Siemens closed flat at
€93.43.
ANALYSIS l Siemens
€
93.43
25 Jan
95
90
85
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
Northern District of Illinois Eastern
Division.
Motorola Solutions said the case
is without merit and it still aims to
close the Nokia Siemens deal early
this year. The deal needs approval
from antitrust authorities.
Representatives for Motorola
Mobility and Nokia Siemens
declined to comment on the suit.
ANALYSIS l Greene King
500 p 446.60
25 Jan
480
460
440
420
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan
GREENE KING
Numis rates the leisure group “add” with
a target price of 525p. The broker
expects the firm to report in-line or
above-forecast sales on Monday, building
on a 17 per cent rise in pre-tax profit in
the first half of the financial year. Numis
predicts a pre-tax profit of £136m for
2011, which is slightly below consensus
estimates.
 18 News CITYA.M. 26 JANUARY 2011

DP World sees traffic at its SEVERN TRENT SEES LEAKAGES RISE

ports lift as world trade rises

strongest gains were in Asia, look for the container terminal
▲

SHIPPING
BY ROGER BAIRD
DUBAI’S DP World, the world’s third-
largest container operator, saw sales
rise 14 per cent higher in 2010 com-
pared to the previous year, in a sign
that at least parts of the world econ-
omy are gathering momentum.
DP World, which is 80 per cent
owned by Dubai World, the Arab
emirate’s debt-laden, government-
owned conglomerate, said the
Australia and America, as well as in
new terminals in Peru and China.
DP World said 49.6m TEU (twenty-
foot equivalent container units)
came through its 49 terminals in 28
countries last year.
The firm also operates the
Southampton and Tilbury ports in
the UK.
The firm’s chief executive
Mohammed Sharaf said: “We remain
confident about the long-term out-
industry. Handling 50m TEU across
our global portfolio is a major mile-
stone for DP World. It puts our annu-
al throughput for 2010 well ahead of
historic peak levels seen in 2008.”
DP World also said it is on track to
launch a secondary listing of its
shares on the London Stock
Exchange in the second quarter of
this year. Currently about 20 per
cent of DP World is listed on the
Dubai stock exchange. SEVERN TRENT said yesterday it has experienced higher levels of leakages so far this
winter because of last month’s snow. The water firm, led by chief executive Tony Wray,
added its net capital expenditure would range from £400m to £410m for the year. It said
that the business expected to book exceptional charges of around £20m to £25m.

Babcock says
sales on track
▲ DEFENCE
BY ROGER BAIRD
BABCOCK International, the defence
services group, delivered an upbeat
third-quarter trading statement yes-
terday saying that its strong order
book made it “confident” of meeting
its full-year targets.
The business, led by chief executive
Peter Rogers, said third-quarter trade
had been strong, driven by growth at
its defence, security and marine
units.
Babcock, which also maintains
Royal Navy submarines, yesterday
said that its pipeline of contracts that
it was bidding for stood at £6bn, up
from £5bn three months ago. It
added its order book was stable at
around £12bn.
The support services firm said: “We
are confident of achieving our expec-
tations for this financial year and
expect to make further good progress
thereafter.”
The firm, which last year bought
out rival VT Group, said that its inte-
gration was progressing “efficiently”
and it was confident of achieving
£50m of pre-tax savings in total from
the deal by the end of March 2011.
Babcock bought VT for £1.5bn last
March. It also said the government’s
Strategic Defence and Security
Review would provide it with new
“significant” outsourcing business.
ANALYSIS l Babcock International
600 p 579.00
25 Jan
560
520
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan

ANALYST VIEWS: HOW HAS BABCOCK DONE

SINCE IT BOUGHT VT GROUP? Interviews by Roger Baird

PAUL JONES | PANMURE GORDON

“ The order book remains stable, with the bid pipeline

showing some growth and expected to grow steadily during

”
the course of the year. Cash generation appears to remain
strong, with the integration of VT progressing well.

MIKE MURPHY | NUMIS

“ This positive third-quarter management statement

should bash the Babcock bears. We see fears over the

”
growth rate and its net debt position receding over the next
12 months driving a major re-rating of the shares.

KEVIN LAPWOOD | SEYMOUR PIERCE

“ The trading update was a comforting mixture of

stability in the UK defence businesses and strong cash flow

”
combined with encouraging growth overseas. The integra-
tion of VT Group continues according to plan.
 St rld
W
r at Ec
o
eg on
ic
Pa om
rtn ic
er Fo
to ru
th m
e
Can’t get to
Davos?
Tune in for live coverage from 26 – 28 January.
CNBC provides the most extensive coverage of the World Economic Forum Annual Meeting in Davos.

davos.cnbc.com
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CITYA.M. 26 JANUARY 2009 WORDS BY MARC SIDWELL Interview 21

The game’s not over for the West,

and Dambisa Moyo wants us to win
The controversial
author of Dead Aid “A third of
tells the West that it all Americans
needs to confront its with a college
education
problems to survive
think the US
should do

I
MAGINE if the top Premiership team,
instead of honing its football skills, more to limit
became obsessed by the performance
of another, lower-ranking but fast- trade.”
improving side. Distracted from practice,
heads craned over their shoulders to gawp
at the new phenomenon, the players’
advantage would dwindle not so much
from the growing skill of the newcomers
but from their lack of focus on their own
performance. Out of shape and badly
managed, they would rapidly find them-
selves relegated. That is the metaphor that
Dambisa Moyo suggests to me captures
the current predicament of the West.
We have met to discuss her new book,
“How The West Was Lost”, which argues
that we are losing ground to China and
other emerging economies, not so much
because they are doing well as because of
our own failing performance. And like
those forgetful but fundamentally talent-
ed players, Moyo believes that if we will
only pay attention to ourselves, and insti-
tute the economic equivalent of a tough
new training regime, all is not yet lost.
Moyo is already controversial as the
author of Dead Aid, which dared to sug-
gest that fifty years of aid to Africa may
have done more harm than good. Its suc-
cess still surprises her. She admits that
before its release, “I had a couple of con-
versations with my publisher about
pulling it” – in January 2009, with the
financial crisis dominating the news, it
seemed that few would be interested in
discussing the politics of aid. And yet it
became an immediate sensation, perhaps
because “people were actually questioning
everything”.
With her new book, Moyo is hoping to
push that questioning spirit even further.
She calls herself something of an “acciden-
tal” writer, driven by irritation over the
treatment of the issues rather than long-
standing literary ambitions. And she is
certainly a passionate defender of her
analysis, her hands reaching out to
emphasise her points. If her two books
seem on the surface far apart from one
another in subject matter, for her they are
deeply connected by the power of unin- So far so troubling, but with the coali- Dambisa Moyo calls This is an alarming call to all those, policy mistakes.
tended consequences – the dangerous way tion government in the process of cutting for the West to wake including Moyo, who see the clear bene- It isn’t over for us yet, but if Moyo is
good intentions can lead to bad outcomes. public spending and working hard to up to fifty years of fits of free trade, and she stresses that this right, the West has taken its eye off the
Often, as she points out, these problems improve the quality of national education, economic folly is not her preferred answer. Instead, she ball and is in danger of unnecessarily con-
can be traced to the choices of the same Moyo’s criticisms are at least in line with hopes to see Western nations taking more ceding the game: “It’s the West’s to lose,”
actors, the same generations of policymak- some current anxieties. And yet her most notice of the problems they have incurred she says, a voice of clarity continuing to
ers encouraging huge government to gov- extreme solutions are truly explosive – as than the success of others, and developing challenge the conventional wisdom.
ernment aid flows into Africa and calling she says, “nuclear options”. While she a strategy for sustained growth, while con- “How The West Was Lost” is published by
for subsidised house purchasing and stresses that she remains “a free trader”, fronting the legacy of a half century of Allen Lane, £14.99.
unfunded pension entitlements at home. Moyo argues that the westerner in the
What has happened to the West? When street has seen little benefit from globali-
Moyo turns her gaze from the rising stars sation. If Moyo still prefers free trade, she CV | DAMBISA MOYO
of the East she sees a civilisation that has reluctantly concludes that the boldest,
failed to take good care of its capital, surest way for the West to save itself might
building up a pension liability “that be to retreat behind trade barriers. She Born: Lusaka, Zambia Award: Named by Time Magazine as one of the “100
smells of a Ponzi scheme” and driving quotes to me from FDR’s first inaugural, Most Influential People in the World” in 2009
unsustainable investment in property, not delivered in 1933: “Our international Lives: London
only creating a disastrous bubble but also trade relations, though vastly important, Davos honoree: Nominated to the World Economic
leaving ordinary citizens in the West over- are in point of time and necessity second- Education: BA in chemistry and an MBA in finance, Forum’s Young Global Leaders Forum in 2009
invested in a troubled asset class instead of ary to the establishment of a sound American University, Washington DC; PhD in econom-
exposed to the upside of globalisation national economy. I favor as a practical ics, Oxford University; Masters, Kennedy School of Books: “Dead Aid: Why Aid is Not Working and How
occurring in emerging markets. policy the putting of first things first. I Government, Harvard University there is a Better Way for Africa” (2009). “How the
Meanwhile our human capital, she shall spare no effort to restore world trade West Was Lost: Fifty Years of Economic Folly and the
argues, is poorly educated and blinded by by international economic readjustment,
unwise ambitions – too many would-be but the emergency at home cannot wait
Career: World Bank consultant and Goldman Sachs Stark Choices Ahead“ (2011)
celebrities and not enough engineers. on that accomplishment.”
 22 Wealth Management | IFAs CITYA.M. 26 JANUARY 2011

European stocks drop as UK and Spain falter

drop since the third quarter in 2009, worst hit by the disappointing Salgado said late on Monday that the the rest of Europe,” said Angus

THEEUROPEAN prompting warnings of a grim 2011

as the government embarks on the
growth figures, with Marks &
Spencer, Next and Kingfisher down
country’s savings banks have to boost
core capital ratios to a minimum of 8
Campbell, head of sales at Capital
Spreads.

REPORT
deep spending cuts.
The pan-European FTSEurofirst 300
index of top shares closed 0.6 per cent
lower at 1,144.14 points.
0.9 to 3.1 per cent. per cent by September or the state Offering some relief from the
Encouraging macroeconomic data will partially take them over. gloom over the debt crisis in the Euro
from the United States, however, Banco Santander and BBVA under- zone, the European Financial
helped limit further losses on the performed the wider banking sector Stability Facility drew extremely high

E
UROPEAN shares fell yesterday,
as confidence in Britain was
shaken by an unexpected drop
in fourth-quarter UK growth fig-
ures and with Spanish banks down
on concerns new capital requirement
rules may not be tough enough.
Britain’s economy unexpectedly
shrank 0.5 per cent in the last three
months of last year, the first quarterly
“Everyone is on the back foot given
the GDP numbers earlier, which has
certainly capped any upside for the
market. There doesn’t seem to be
much in the way of fresh buyers
around which begs the question
where is the new wave of buying
going to come from,” said Manoj
Ladwa, senior trader at ETX Capital.
British retailers were among the
index, as figures showed consumer
confidence rose more than expected
in January to its highest level in eight
months.
Across Europe, Britain’s FTSE 100
shed 0.4 per cent, while Germany’s
DAX and France’s CAC 40 lost 0.1 and
0.3 per cent respectively.
Spanish banks were under pressure
after Spain’s Economy Minister Elena
by falling 3.1 and 2.9 per cent on con-
cerns the new capital requirements
ratios may not be tough enough to
build confidence in the sector.
“There has been quite a bit of opti-
mism around the European crisis
over the past few days, but there is
still a great deal of concern over the
Spanish cajas. If they can’t find the
funding, this will have a dire effect on
demand for its debut issue of five-year
debt to fund Ireland’s bailout, with
order books worth over eight times
the amount on offer.
Among individual movers, French
chip maker STMicroelectronics lost
4.5 per cent as disappointing per-
formance of its joint venture with
Ericsson. Ericsson, however, gained
2.5 per cent with a strong forecast.

Shock GDP contraction pulls Wall Street finishes

FTSE and sterling downward flat after late buying
more on its processing business,

THELONDON “In times of uncertainty, retailers

bear the brunt as when we see the
rose 3.1 per cent. The firm said Trevor
Matthews would quit as head of its THE NEW YORK which faces increased regulation.
“Today the market is simply a little

REPORT
economy hit, households are more Friends Provident arm, making way tired and overbought,” said Bruce

REPORT cautious,” John Stevenson, retail ana-

lyst at Peel Hunt said.
Next peer Marks & Spencer fell 2.2
per cent while home improvements
for industry veteran Andy Briggs.
Investors toasted drinks group
Diageo, up 1.6 per cent supported by
Bittles, chief investment strategist at
Robert W. Baird & Co in Nashville.
“But selling has been ineffective,
further positive broker comment and including today; the benefit of the

R U
ETAILERS were hit as Britain’s
top share index fell yesterday
after a shock 0.5-per cent con-
traction in UK GDP in the last
three months of 2010.
The FTSE 100 closed was down
26.14 points, or 0.4 per cent, at
5,917.71, having risen 0.8 per cent on
Monday.
Figures from the Office of National
Statistics showed the UK economy
unexpectedly shrunk 0.5 per cent in
the last three months of 2010, after
0.7 per cent growth in the third quar-
ter.
“There hasn’t been a correction (on
the back of the news). The market is
adjusting to the stories as and when
they break, but it feels as if there is a
resilience in the market, that could
well get us back through the 6,000
level,” Martin Dobson, head of trad-
ing at Westhouse Securities, said.
British retailers were among the
worst affected by the figures, with
Next down 3.1 per cent.
retailer Kingfisher lost 0.9 per cent.
Luxury goods firm Burberry, how-
ever, added 3.2 per cent after a bullish
trading update from peer Luxottica.
US consumer confidence rose more
than expected in January to its high-
est level in eight months.
Demand from US and Asia helped
the luxury goods industry recover-
from its worst slump in decades.
However, Wall Street was lower
after a slew of earnings including 3M,
Johnson & Johnson and American
Express failed to persuade investors to
add to the previous session’s gains.
Miners also dragged the FTSE 100
lower, tracking weaker commodity
prices, as risk appetite ebbed.
However, precious metals processor
Johnson Matthey rallied, up 1 per-
cent, helped by improving sales
trends in the automotive industry for
which it manufactures catalytic con-
vertors, traders said.
Elsewhere on the upside, British
insurance consolidator Resolution
figures for the US spirits industry. S stocks erased losses in a late
Morgan Stanley raised its target flurry of buying to end little
price for Diageo, with Exane BNP changed yesterday as overall
Paribas having done the same on optimism about earnings offset
Monday. disappointing results from blue chips
Vodafone gained 0.9 per cent after 3M and Johnson & Johnson.
its venture with Verizon beat expecta- About 70 per cent of S&P compa-
tions with wireless growth. nies so far have beaten estimates, but
BSkyB added 0.3 per cent after the worries about inflation cutting into
Culture Secretary Jeremy Hunt gave profits have caused investors to jump
News Corp a final chance to avoid a on shares of companies that only pro-
prolonged investigation into its $12.5 duce spectacular results.
bn (£7.9bn) buyout of BSkyB. Stocks were lower for most of yes-
terday’s trading. Shares of 3M fell 2
ANALYSIS l FTSE 5,917.71 per cent to $88.50 after results barely
6,100 25 Jan topped estimates and the manufac-
turer warned rising raw material
costs would pressure its bottom line.
5,900 Healthcare company J&J said US
sales of consumer products fell
sharply and forecast 2011 earnings
5,700 below expectations, sending its
shares down 2 per cent to $61.08.
American Express fell 2 per cent to
5,500 $44.80 a day after reporting results.
25 Oct 12 Nov 2 Dec 22 Dec 14 Jan Investors were worried as it relies
doubt has to go to the bullish case.”
The Dow Jones industrial average
finished down 3.33 points, or 0.03 per
cent, at 11,977.19. The Standard &
Poor’s 500 Index was up 0.34 point, or
0.03 per cent, at 1,291.18. The Nasdaq
Composite Index was up 1.70 points,
or 0.06 per cent, at 2,719.25.
The S&P 500 index bounced off sup-
port at 1,280 in a sign of the market's
resilience despite some disappointing
earnings.
Trading volume was 7.97bn shares
on the New York Stock Exchange, the
American Stock Exchange and
Nasdaq, down from last year’s esti-
mated daily average of 8.47bn shares.
Investors will focus on US
President Barack Obama’s State of the
Union speech to Congress (0200 GMT
today). His remarks could have an
impact on energy, infrastructure and
other market sectors. He is expected
to challenge Republican proposals to
cut the federal budget in a bid to slow
the growth of US government debt.

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CITYA.M. 26 JANUARY 2011 Wealth Management 23

FTSE 100 FTSE 250 FTSE ALL SHARE DOW NASDAQ S&P 500 / 1.1593 0.0015 /$ 1.3635 0.0081
5917.71 11501.60 3069.73 11977.19 2719.25
2304.03 1291.18 /$ 1.5825 0.0015 /£ 0.8635 0.0133
-26.14 -71.84 -14.15 -3.33 1.7
3.64 0.34 /¥ 130,09 1.8140 /¥ 112.31 0.0037
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
GILTS Yule Catto & Co . . . . .217.0 -1.3 221.2 106.1 Berkeley Technolo . . . .0.0 0.0 0.0 0.0 Rexam . . . . . . . . . . . .337.1 0.8 356.1 276.5 Amlin . . . . . . . . . . . . .393.2 -2.0 433.0 366.8 Aquarius Platinum . .345.0 -11.1 458.0 227.1 Derwent London . . .1535.0 4.0 1605.0 1208.0 Ladbrokes . . . . . . . . .130.3 -0.7 162.7 122.
Brewin Dolphin Ho . .162.5 -5.5 177.5 114.0 Smiths Group . . . . .1369.0 2.0 1388.0 995.5 Beazley . . . . . . . . . . . .119.7 0.2 125.0 102.3 BHP Billiton . . . . . . .2394.5 -38.0 2616.0 1684.5 Great Portland Es . . .357.3 1.8 369.2 279.1 Marston's . . . . . . . . . .101.0 -0.5 117.1 82.
Tsy 9.000 11 . . . .103.89 0.01 111.8 103.9 CONSTRUCTION & MATERIALS Camellia . . . . . . . . . .9725.0-188.010700.06900.0 Brit Insurance Ho . .1048.0 -1.0 1055.0 728.0 Centamin Egypt Lt . .139.0 -6.0 197.1 106.8 Hammerson . . . . . . . .438.1 -1.8 442.2 336.3 Millennium & Copt . .557.5 0.5 594.5 368.
Tsy 3.250 11 . . . .102.24 0.09 104.1 102.1 GENERAL RETAILERS
Balfour Beatty . . . . . .328.3 -2.4 331.4 229.8 Charles Taylor Co . . .153.5 -3.5 240.0 153.0 Catlin Group Ltd. . . .377.0 -3.0 393.1 319.9 Eurasian Natural . .1002.0 -28.0 1266.0 818.0 Land Securities G . . .687.0 1.5 707.0 545.0 Mitchells & Butle . . . .342.8 -4.2 361.0 265.
Tsy 2.500 11 . . . .309.72 0.04 311.1 306.4 Keller Group . . . . . . .671.0 1.0 784.5 515.0 City of London Gr . . . .93.5 0.0 94.5 62.0 Brown (N.) Group . . .296.3 0.6 311.2 206.5 CPP Group . . . . . . . . .310.4 -3.1 329.0 225.0 Fresnillo . . . . . . . . . .1312.0 -43.0 1682.0 669.5 SEGRO . . . . . . . . . . . .295.0 1.5 341.3 250.2 National Express . . .244.6 -5.3 259.6 195.
Tsy 4.250 11 . . . .100.42 -0.01 104.0 100.4 Kier Group . . . . . . . .1280.0 -24.0 1383.0 886.5 City of London In . . .450.0 2.0 461.5 266.5 Carpetright . . . . . . . . .776.0 -14.0 973.0 636.0 Hiscox Ltd. . . . . . . . . .380.7 -0.8 399.0 326.2 Hochschild Mining . .468.2 -9.4 658.0 234.0 Shaftesbury . . . . . . . .441.5 -2.3 460.1 349.3 PartyGaming . . . . . . .190.1 -1.8 334.5 186.
Tsy 9.000 12 . . . .112.11 0.00 118.0 107.3 Close Brothers Gr . . .859.0 -0.5 888.5 664.0 Debenhams . . . . . . . . .67.2 -0.7 79.0 53.0 Jardine Lloyd Tho . . .634.0 -1.5 639.0 459.0 Kazakhmys . . . . . . .1500.0 -58.0 1671.0 965.0 Punch Taverns . . . . . .68.0 -1.2 101.0 58.
Tsy 5.250 12 . . . .105.92 0.14 108.7 105.8 ELECTRICITY Collins Stewart . . . . . .86.5 -0.5 94.0 67.3 Dignity . . . . . . . . . . . .674.5 -1.0 726.5 598.0 Lancashire Holdin . . .575.5 4.0 647.0 442.0 Kenmare Resources . .33.5 -0.2 35.1 9.3 SOFTWARE & COMPUTER SERV. Rank Group . . . . . . . .128.4 -1.0 138.5 89.
Tsy 5.000 12 . . . .104.68 0.11 107.7 104.5 Drax Group . . . . . . . .398.3 4.2 421.0 326.3 Evolution Group . . . . .68.5 -3.5 129.6 67.0 Dixons Retail . . . . . . .22.0 -0.4 36.5 21.4 RSA Insurance Gro . .134.9 -0.1 136.6 114.8 Lonmin . . . . . . . . . . .1717.0 -26.0 2113.0 1355.0 Autonomy Corporat 1487.0 9.0 1975.0 1271.0 Restaurant Group . . .300.0 2.2 310.9 188.
Tsy 4.500 13 . . . .106.90 0.23 109.2 106.6 International Pow . . .427.1 8.0 448.6 284.5 F&C Asset Managem .89.9 -1.2 92.9 47.5 Dunelm Group . . . . . .475.0 0.0 550.0 325.3 Petropavlovsk . . . . .1009.0 -30.0 1365.0 852.0 Aveva Group . . . . . .1579.0 -39.0 1673.0 1007.0 Sportingbet . . . . . . . . .53.0 -2.2 79.9 51.
Tsy 8.000 13 . . . .117.72 0.32 121.3 117.3 LIFE INSURANCE
Scottish & Southe . .1215.0 -7.0 1258.0 1010.0 Gartmore Group Lt . .101.0 -0.5 222.0 88.5 Halfords Group . . . . .411.0 1.0 550.0 372.8 Randgold Resource 4855.0-180.0 6655.0 4209.0 Computacenter . . . . .428.2 -16.5 444.7 260.0 Stagecoach Group . .206.2 3.0 224.0 160.
Tsy 2.500 13 . . . .279.82 0.15 280.3 263.6 Hargreaves Lansdo .514.5 -7.0 599.0 276.5 Home Retail Group . .214.8 -2.8 295.1 188.5 Aviva . . . . . . . . . . . . .433.9 -0.5 439.7 294.2 Rio Tinto . . . . . . . . .4290.0 -57.5 4584.0 2812.0 Fidessa Group . . . . .1540.0 10.0 1722.0 1225.0 Thomas Cook Group 199.2 -4.8 272.0 171.
Tsy 5.000 14 . . . .110.75 0.33 114.1 109.5 ELECTRONIC & ELECTRICAL EQ. Helphire Group . . . . . .14.0 0.3 60.3 11.8 Inchcape . . . . . . . . . .382.7 -4.0 394.8 237.1 Legal & General G . . .108.1 -2.3 111.1 69.8 Vedanta Resources 2351.0 -77.0 2934.0 1839.0 Invensys . . . . . . . . . . .329.0 3.6 364.3 230.2 TUI Travel . . . . . . . . . .270.3 3.2 308.4 190.
Tsy 8.000 15 . . . .125.89 0.33 131.6 125.2 Domino Printing S . .625.5 -9.5 659.0 322.9 Henderson Group . . .152.1 -1.1 155.5 112.8 JD Sports Fashion . .870.5 1.0 933.5 560.5 Old Mutual . . . . . . . . .125.4 0.1 145.2 97.3 Xstrata . . . . . . . . . . .1392.0 -31.5 1535.0 845.8 Logica . . . . . . . . . . . .137.9 0.8 147.9 101.7 Whitbread . . . . . . . .1778.0 5.0 1887.0 1266.
Tsy 7.750 15 . . . .106.80 -0.43 112.2 76.0 Halma . . . . . . . . . . . . .321.6 -0.8 366.6 223.0 Highway Capital . . . . . .7.0 0.0 8.5 6.0 Kesa Electricals . . . .130.9 5.1 174.0 99.2 Phoenix Group Hol . .588.0 3.5 758.0 557.5 Micro Focus Inter . . .409.1 6.1 546.5 276.0 William Hill . . . . . . . . .186.4 0.5 216.5 155.
Tsy 4.750 15 . . . .110.50 0.39 114.7 108.5 MOBILE TELECOMS
Laird . . . . . . . . . . . . . .161.4 2.0 174.1 98.8 ICAP . . . . . . . . . . . . . .545.0 -3.5 570.5 294.0 Kingfisher . . . . . . . . .262.8 -2.4 271.3 198.5 Prudential . . . . . . . . .668.0 13.5 697.5 487.5 Misys . . . . . . . . . . . . .322.6 -9.8 343.0 201.5
Tsy 2.500 16 . . . .314.26 0.23 318.5 291.8 Morgan Crucible C . .255.1 -6.1 274.3 159.8 IG Group Holdings . .470.6 -9.3 553.0 362.4 Marks & Spencer G . .361.4 -8.0 427.5 323.4 Resolution Ltd. . . . . .253.0 7.7 328.6 211.3 Inmarsat . . . . . . . . . . .636.0 15.0 821.0 606.5 Sage Group . . . . . . . .283.3 3.4 289.0 222.1 AIM 50
Tsy 4.000 16 . . . .106.87 0.42 111.4 102.8 Renishaw . . . . . . . . .1335.0 9.0 1353.0 565.5 Intermediate Capi . . .347.5 4.7 360.3 240.4 Mothercare . . . . . . . .542.0 0.0 660.0 491.2 St James's Place . . . .295.4 1.3 296.2 204.2 Vodafone Group . . . .179.5 1.6 180.7 129.5 SDL . . . . . . . . . . . . . . .604.0 2.0 656.0 410.0 Abcam . . . . . . . . . . . .316.0 -7.0 393.0 199.
Tsy 12.000 17 . . .129.82 0.16 135.9 129.4 Spectris . . . . . . . . . .1310.0 8.0 1418.0 735.0 International Per . . . .334.5 -4.4 386.6 183.3 Next . . . . . . . . . . . . .2075.0 -67.0 2344.0 1817.0 Standard Life . . . . . . .225.2 -0.9 236.1 173.0 Telecity Group . . . . . .454.2 21.2 532.5 360.0 Albemarle & Bond . .297.0 -4.5 334.0 218.
Tsy 1.250 17 . . . .108.02 0.14 111.1 102.6 NONEQUITY INVESTM. COMM.
International Pub . . .115.5 -0.3 118.3 109.2 Sports Direct Int . . . .164.3 -6.5 174.7 92.3 MEDIA SUPPORT SERVICES Amerisur Resource . .23.0 1.0 23.0 11.
Tsy 8.750 17 . . . .135.35 0.35 142.2 132.4 EQUITY INVESTMENT INSTRUM. Investec . . . . . . . . . . .490.9 -14.1 562.0 417.7 WH Smith . . . . . . . . . .480.8 1.4 523.0 398.2 Genesis Emerging . .532.5 -1.5 568.0 398.9 Archipelago Resou . . .64.3 0.3 64.8 30.
Tsy 5.000 18 . . . .111.91 0.36 117.6 107.4 Aberforth Smaller . . .682.5 -3.0 686.0 495.0 IP Group . . . . . . . . . . . .33.0 0.0 58.5 28.0 4imprint Group . . . . .255.0 -5.0 275.0 120.0 Aggreko . . . . . . . . . .1410.0 -4.0 1685.0 882.0 ASOS . . . . . . . . . . . .1495.0 -5.0 1683.0 415.
Tsy 4.500 19 . . . .107.45 0.35 113.8 102.5 HEALTH CARE EQUIPMENT & S. OIL & GAS PRODUCERS
Alliance Trust . . . . . .369.0 1.5 377.9 293.5 Jupiter Fund Mana . .305.0 -4.8 314.0 180.3 Aegis Group . . . . . . .138.7 -2.8 145.5 103.6 Ashtead Group . . . . .163.8 2.4 176.9 77.0 Aurelian Oil & Ga . . . .79.8 -3.0 87.0 32.
Tsy 3.750 19 . . . .101.41 0.35 107.7 95.9 Bankers Inv Trust . . .414.1 -2.9 423.0 337.0 LMS Capital . . . . . . . . .52.5 0.0 56.3 40.0 Smith & Nephew . . . .691.5 -4.5 714.0 537.5 Bloomsbury Publis . .116.0 -1.0 134.3 105.3 Afren . . . . . . . . . . . . . .148.6 -1.5 161.7 79.0 Atkins (WS) . . . . . . . .672.5 1.5 792.5 556.5 Avanti Communicat .611.5 -1.0 735.0 375.
Tsy 4.750 20 . . . .108.67 0.30 115.9 103.8 BH Global Ltd. GB .1095.0 -17.0 1178.0 1082.0 London Finance & . . .19.5 0.0 21.5 16.5 Synergy Health . . . . .888.0 -12.0 915.0 562.5 British Sky Broad . . .752.0 2.0 758.5 524.5 BG Group . . . . . . . . .1326.5 4.0 1366.0 984.0 Babcock Internati . . .579.0 8.5 635.0 492.8 Avocet Mining . . . . . .208.8 -1.3 240.0 84.
Tsy 2.500 20 . . . .316.28 0.19 325.7 290.9 BH Global Ltd. US . . . .10.8 -0.1 11.6 10.7 London Stock Exch .866.5 -3.0 906.0 544.0 Centaur Media . . . . . . .70.0 0.0 71.0 45.8 BP . . . . . . . . . . . . . . . .497.0 0.0 655.4 302.9 Berendsen . . . . . . . . .430.0 -4.3 449.9 360.2 Blinkx . . . . . . . . . . . . . .96.8 0.0 102.0 12.
Tsy 8.000 21 . . . .136.66 0.29 147.1 132.8 HHOLD GDS & HOME CONSTR.
BH Macro Ltd. EUR . . .16.6 -0.1 17.2 15.8 Man Group . . . . . . . . .277.9 -7.0 310.5 201.9 Chime Communicati .252.0 3.0 258.8 158.0 Cairn Energy . . . . . . .429.2 -11.1 493.2 318.3 Bunzl . . . . . . . . . . . . .750.5 3.5 777.0 616.5 Borders & Souther . . .64.8 -2.0 93.0 45.
Tsy 4.000 22 . . . .100.93 0.32 108.4 95.4 BH Macro Ltd. GBP 1710.0 -16.0 1805.0 1630.0 Paragon Group Of . .181.2 -2.5 190.0 114.4 Barratt Developme . . .95.6 -3.5 137.7 70.1 Chrysalis . . . . . . . . . .159.3 0.0 164.0 96.0 EnQuest . . . . . . . . . . .140.8 -1.9 150.6 89.3 Capita Group . . . . . . .690.0 -3.5 826.0 635.5 BowLeven . . . . . . . . .351.0 -19.0 398.0 102.
Tsy 1.875 22 . . . .112.26 0.23 117.8 107.3 BH Macro Ltd. USD . . .16.5 -0.2 17.1 15.8 Provident Financi . . .962.5 -2.0 999.5 728.5 Bellway . . . . . . . . . . . .643.0 -22.0 809.0 511.0 Creston . . . . . . . . . . . .81.8 1.3 105.0 78.5 Essar Energy . . . . . .536.0 2.0 589.5 383.0 Carillion . . . . . . . . . . .379.3 -2.5 387.6 273.0 Caledon Resources . .96.0 -1.0 107.0 23.
Tsy 2.500 24 . . . .276.95 0.24 286.9 254.0 BlackRock World M .757.0 -19.0 815.0 492.1 Rathbone Brothers .1138.0 -2.0 1160.0 762.5 Exillon Energy . . . . . .400.0 -14.8 414.8 163.0 De La Rue . . . . . . . . .720.0 25.0 984.0 549.5 Cape . . . . . . . . . . . . . .439.3 -3.5 467.5 190.
Tsy 5.000 25 . . . .109.60 0.31 118.5 103.6 BlueCrest AllBlue . . .170.1 -0.9 174.5 156.2 Real Estate Credi . . . . .1.0 -0.0 2.5 0.9 Heritage Oil . . . . . . . .436.6 -0.3 581.0 296.8 Electrocomponents .255.3 5.1 279.5 174.8 CareTech Holding . . .236.8 5.5 440.0 231.
Tsy 1.250 27 . . . .105.13 0.23 111.2 100.4
Tsy 4.250 27 . . . . .99.78 0.27 108.8 94.8
British Assets Tr . . . .135.8 -0.9 140.5 104.1
British Empire Se . . .505.0 0.0 512.0 396.5
RSM Tenon Group . . .59.8 -3.8 66.3 38.0
S & U . . . . . . . . . . . . .596.0 0.0 602.5 447.5
MAIN CHANGES UK 350 JKX Oil & Gas . . . . . .289.5 -0.8
Premier Oil . . . . . . . .2008.0 -2.0
329.3 223.2
2025.0 1017.0
Experian . . . . . . . . . . .773.0 -1.0 819.0 572.0
Filtrona PLC . . . . . . . .276.0 2.0 290.0 168.0
Conygar Investmen .114.0 1.0
Cove Energy . . . . . . . .96.0 0.5
124.3
110.0
101.
23.
Tsy 6.000 28 . . . .121.69 0.26 132.7 116.9 Caledonia Investm .1826.0 -45.0 1928.0 1512.0 Schroders . . . . . . . .1793.0 -35.0 1922.0 1116.0 Royal Dutch Shell . .2165.5 -7.0 2182.0 1624.0 G4S . . . . . . . . . . . . . . .267.4 3.1 283.5 237.7 Daisy Group . . . . . . .106.0 -0.5 108.5 84.
Tsy 4.125 30 . . . .262.93 0.18 274.4 242.0 City of London In . . .285.9 -0.8 296.0 231.0 Schroders (Non-Vo .1406.0 -26.0 1508.0 929.5
Risers % Fallers %
Royal Dutch Shell . .2162.0 -8.5 2178.5 1554.0 Hays . . . . . . . . . . . . . .122.8 0.5 133.6 88.4 Desire Petroleum . . . .40.3 -2.3 168.5 33.
Tsy 4.750 30 . . . .104.87 0.25 115.0 100.1 Dexion Absolute L . .143.0 -0.6 147.9 131.2 Tullett Prebon . . . . . .408.8 11.7 420.5 262.0 Telecity Group . . . . . .454.2 4.9 PZ Cussons . . . . . . . .352.6 -7.0 Salamander Energy .282.1 -6.8 296.6 204.9 Homeserve . . . . . . . .432.1 -11.4 487.5 326.2 EMIS Group . . . . . . . .425.3 0.0 440.8 303.
Tsy 4.250 32 . . . . .97.88 0.24 107.8 93.7 Edinburgh Dragon . .247.0 -1.0 262.1 178.0 Walker Crips Grou . . .50.0 0.0 51.0 45.0 STV Group . . . . . . . . .131.8 4.2 RSM Tenon Group . . .59.8 -5.9 Soco Internationa . . .359.3 -10.7 484.2 292.0 Howden Joinery Gr . .112.1 -4.0 118.0 56.8 Encore Oil . . . . . . . . .130.8 -2.8 149.0 14.
Tsy 4.250 36 . . . . .96.91 0.21 107.4 93.0 Edinburgh Inv Tru . . .438.1 -0.2 467.2 364.1 Tullow Oil . . . . . . . . .1331.0 -9.0 1388.0 991.5 Intertek Group . . . . .1753.0 27.0 2000.0 1150.0 Faroe Petroleum . . . .198.3 -8.5 218.3 105.
Tsy 4.750 38 . . . .105.02 0.18 116.5 101.1 FIXED LINE TELECOMS Kesa Electricals . . . .130.9 4.1 Premier Foods . . . . . . .20.7 -5.1
Electra Private E . . .1652.0 -20.0 1719.0 1177.0 De La Rue . . . . . . . . .720.0 3.6 Evolution Group . . . . .68.5 -4.9 Michael Page Inte . . .523.5 3.5 565.5 346.4 Gulfsands Petrole . . .357.0 -4.5 401.5 240.
Tsy 4.500 42 . . . .101.04 0.15 112.8 97.5 OIL EQUIPMENT & SERVICES
F&C Inv Trust . . . . . .311.0 -0.6 316.3 251.4 BT Group . . . . . . . . . .176.2 3.3 190.8 109.9 Elementis . . . . . . . . . .131.1 3.6 Ocado Group . . . . . . .228.0 -4.6 Mitie Group . . . . . . . .232.9 -0.4 241.1 188.7 GW Pharmaceutical .109.0 -1.0 141.0 83.
Fidelity China Sp . . . .112.8 -0.5 128.7 92.3 Cable & Wireless . . . .47.1 -0.1 63.7 44.4 Amec . . . . . . . . . . . .1172.0 -4.0 1226.0 733.5 Premier Farnell . . . . .282.9 -1.1 304.4 174.0 Hamworthy . . . . . . . .406.3 -3.8 439.0 256.
AEROSPACE & DEFENCE Fidelity European . .1145.0 0.0 1150.0 916.0 Cable & Wireless . . . .70.1 -1.9 100.0 60.5 Burberry Group . . . .1063.0 3.2 Imagination Techno .367.0 -4.5 Hunting . . . . . . . . . . .750.0 -5.5 806.0 439.4 Regus . . . . . . . . . . . . . .98.6 -0.7 120.0 66.1 Hargreaves Servic . .845.0 27.0 845.0 556.
BAE Systems . . . . . .351.6 -1.4 388.8 294.7 Fidelity Special . . . . .587.0 -3.0 593.0 503.0 COLT Group SA . . . .147.0 -1.1 149.9 109.0 Resolution Ltd. . . . . .253.0 3.1 Centamin Egypt Ltd .139.0 -4.1 John Wood Group . .534.5 2.5 581.5 293.1 Rentokil Initial . . . . . .104.7 0.2 138.5 87.7 Healthcare Locums .112.5 0.0 273.5 89.
Chemring Group . . .3299.0 -34.0 3663.0 2598.0 Herald Inv Trust . . . .512.0 -2.5 518.5 328.0 TalkTalk Telecom . . .156.1 3.1 168.3 108.5 Tullett Prebon . . . . . .408.8 3.0 Sportingbet . . . . . . . . .53.0 -4.0 Lamprell . . . . . . . . . . .319.9 -2.1 390.0 185.2 RPS Group . . . . . . . . .220.3 -4.2 242.0 169.8 Immunodiagnostic . .901.5 11.5 975.0 575.
Cobham . . . . . . . . . . .220.0 -2.0 275.9 192.3 HSBC Infrastructu . . .118.9 -1.3 121.2 112.0 FOOD & DRUG RETAILERS Inmarsat . . . . . . . . . . .636.0 2.4 SVG Capital . . . . . . . .236.6 -3.8 Petrofac Ltd. . . . . . .1535.0 -45.0 1685.0 879.8 Serco Group . . . . . . .554.0 -4.0 651.0 494.2 James Halstead . . . . .395.0 -5.0 415.0 280.
Meggitt . . . . . . . . . . . .359.7 1.1 380.9 251.4 Impax Environment .123.9 -1.2 130.5 106.5 Mecom Group . . . . . .281.0 2.2 Sports Direct Inte . . .164.3 -3.8 Wellstream Holdin . .784.5 -1.0 793.5 435.9 Shanks Group . . . . . .115.0 -0.5 127.5 92.0 Kalahari Minerals . . .239.0 -6.8 268.0 142.
QinetiQ Group . . . . . .133.3 -1.7 142.0 96.7 JPMorgan American .866.5 9.5 869.5 673.0 Booker Group . . . . . . .56.5 -1.3 60.6 38.6 PERSONAL GOODS SIG . . . . . . . . . . . . . . .141.0 -4.1 153.2 90.7 London Mining . . . . .370.0 2.0 383.0 194.
Rolls-Royce Group . .636.5 7.0 665.0 473.4 JPMorgan Asian In . .235.1 -0.5 250.8 171.3 Greggs . . . . . . . . . . . .468.7 -2.6 501.5 401.0 Price Chg High Low Price Chg High Low SThree . . . . . . . . . . . .368.3 2.1 380.5 231.1 Lonrho . . . . . . . . . . . . .18.3 0.0 19.0 9.
Senior . . . . . . . . . . . . .150.0 2.8 159.0 78.5 JPMorgan Emerging .598.0 0.5 639.0 450.5 Morrison (Wm) Sup .264.7 -2.9 306.3 257.6 Burberry Group . . . .1063.0 33.0 1156.0 590.5 Travis Perkins . . . . .1027.0 -18.0 1127.0 664.5 M. P. Evans Group . .451.0 11.0 500.5 317.
Ultra Electronics . . .1770.0 17.0 1895.0 1265.0 JPMorgan European .855.0 -8.0 885.0 606.0 Ocado Group . . . . . . .228.0 -11.0 239.0 123.5 Berkeley Group Ho . .917.0 -7.5 960.0 742.0 Daily Mail and Ge . . .570.5 3.0 590.0 432.4 PZ Cussons . . . . . . . .352.6 -26.6 409.0 246.0 Wolseley . . . . . . . . .2191.0 23.0 2205.0 1223.0 Majestic Wine . . . . . .416.0 -9.0 430.0 230.
JPMorgan Indian I . . .430.7 -1.8 502.0 345.0 Sainsbury (J) . . . . . . .371.9 -1.5 395.0 312.9 Bovis Homes Group .434.3 -7.4 459.2 326.6 Euromoney Institu . .700.0 -0.5 732.0 461.1 Supergroup . . . . . . .1560.0 -1.0 1638.0 535.0 TECHNOLOGY HARDW. & EQUIP. May Gurney Integr . .260.0 -3.0 264.0 177.
ALTERNATIVE ENERGY JPMorgan Russian .712.5 -0.5 755.0 477.0 Tesco . . . . . . . . . . . . .399.0 -6.5 454.4 377.5 Monitise . . . . . . . . . . . .18.5 -0.3 24.3 14.
Mcbride . . . . . . . . . . .159.8 -0.2 247.4 114.0 Future . . . . . . . . . . . . . .25.8 -0.3 28.5 15.8 PHARMACEUTICALS & BIOTECH
Hansen Transmissi . . .58.4 -0.3 108.0 40.0 Law Debenture Cor . .355.1 -5.4 362.9 267.0 FOOD PRODUCERS Persimmon . . . . . . . .419.3 -4.5 507.5 336.5 Haynes Publishing . .232.5 -1.0 262.5 202.5 ARM Holdings . . . . . .520.5 2.0 536.5 189.4 Mulberry Group . . . .1320.0 -6.0 1350.0 158.
Mercantile Inv Tr . . .1116.0 -8.0 1133.0 828.0 Reckitt Benckiser . .3444.0 -6.0 3655.0 3037.0 Huntsworth . . . . . . . . .81.0 -1.0 87.5 60.8 AstraZeneca . . . . . .3029.0 -3.0 3385.0 2732.0 CSR . . . . . . . . . . . . . .390.0 -3.0 505.0 280.9 Nanoco Group . . . . . . .95.0 -0.5 115.8 74.
AUTOMOBILES & PARTS
Merchants Trust . . . .406.5 -4.7 425.0 315.5 Associated Britis . .1081.0 -11.0 1182.0 873.5 Redrow . . . . . . . . . . . .126.0 0.5 151.9 97.5 Informa . . . . . . . . . . . .433.3 -3.7 448.1 304.4 BTG . . . . . . . . . . . . . .232.4 2.4 263.0 154.2 Imagination Techn . .367.0 -17.3 441.7 215.1 Nautical Petroleu . . .473.5 -6.3 479.8 45.
GKN . . . . . . . . . . . . . .207.7 -0.2 237.1 102.0 Monks Inv Trust . . . .353.6 -5.3 363.0 271.1 Cranswick . . . . . . . . .850.0 10.0 907.5 735.0 Taylor Wimpey . . . . . .35.9 -1.4 44.0 22.3 ITE Group . . . . . . . . . .220.2 -2.8 252.2 126.5 Genus . . . . . . . . . . . . .872.0 -4.5 886.0 675.0 Pace . . . . . . . . . . . . . .182.6 -1.6 215.5 148.6 Nichols . . . . . . . . . . . .465.0 -15.0 495.0 331.
Murray Income Tru . .633.0 -6.0 649.0 502.0 Dairy Crest Group . . .394.5 -5.2 424.9 329.0 ITV . . . . . . . . . . . . . . . . .76.2 -0.9 78.5 48.3 GlaxoSmithKline . . .1167.5 -12.0 1318.5 1095.0 Spirent Communica .130.9 -2.8 160.3 102.8 Numis Corporation . .121.0 -1.5 159.0 109.
BANKS Murray Internatio . . .928.0 -1.5 966.0 736.5 Devro . . . . . . . . . . . . .234.0 -1.7 275.0 137.5 INDUSTRIAL ENGINEERING Hikma Pharmaceuti .875.0 13.0 900.0 525.0 Patagonia Gold . . . . . .44.8 -4.0 59.3 12.
Johnston Press . . . . . .11.0 -0.3 33.5 9.1 TOBACCO
Barclays . . . . . . . . . . .298.5 -2.1 383.2 255.4 Perpetual Income . . .250.8 -0.7 262.0 203.0 Premier Foods . . . . . . .20.7 -1.1 35.6 16.0 Bodycote . . . . . . . . . .285.0 0.0 301.0 168.0 Mecom Group . . . . . .281.0 6.0 288.0 141.8 Shire Plc . . . . . . . . . .1663.0 9.0 1674.0 1220.0 Pursuit Dynamics . . .330.0 -2.5 700.0 135.
HSBC Holdings . . . . .698.0 0.8 719.6 596.2 Polar Cap Technol . .371.2 1.2 384.0 233.5 Tate & Lyle . . . . . . . . .544.0 -6.0 564.5 388.7 Charter Internati . . . .798.5 1.5 853.5 567.0 Moneysupermarket. . .85.9 -1.0 89.1 61.0 REAL ESTATE INVEST. & SERV. British American . .2355.0 -18.0 2521.0 1959.0 Rockhopper Explor .358.5 -7.5 510.0 37.
Lloyds Banking Gr . . .63.2 -1.9 77.6 46.6 RIT Capital Partn . . .1295.0 -1.0 1322.0 971.5 Unilever . . . . . . . . . .1870.0 -50.0 1997.0 1688.0 Fenner . . . . . . . . . . . .347.8 -2.2 386.7 173.8 Pearson . . . . . . . . . .1046.0 -8.0 1058.0 855.0 Imperial Tobacco . .1818.0 -16.0 2154.0 1753.0 RWS Holdings . . . . . .342.0 -6.0 370.0 239.
Royal Bank of Sco . . .43.3 -0.8 58.1 31.3 Schroder Asia Pac . .223.0 -1.2 233.6 168.5 FORESTRY & PAPER IMI . . . . . . . . . . . . . . . .885.5 8.5 953.0 530.5 Reed Elsevier . . . . . .570.0 3.0 570.0 460.6 Capital & Countie . . .147.3 -1.6 156.9 100.0 TRAVEL & LEISURE Songbird Estates . . .142.0 -1.0 180.2 133.
Standard Chartere .1658.5 5.0 1950.0 1351.7 Scottish Inv Trus . . . .505.5 2.5 516.5 401.0 Melrose . . . . . . . . . . .302.5 -3.3 329.0 162.0 Rightmove . . . . . . . . .800.0 10.0 812.0 500.5 Daejan Holdings . . .2774.0 -1.0 2870.0 2157.0 Sterling Energy . . . . . .67.0 0.5 167.3 51.
Scottish Mortgage . .704.0 -2.0 717.5 475.0 Mondi . . . . . . . . . . . . .493.8 2.6 557.5 338.2 Rotork . . . . . . . . . . .1626.0 -12.0 1895.0 1215.0 STV Group . . . . . . . . .131.8 5.3 133.0 47.0 F&C Commercial Pr .102.7 0.4 107.0 87.5 Avis Europe . . . . . . . .225.0 -6.0 284.7 190.0 Valiant Petroleum . . .640.0 -21.0 761.5 504.
BEVERAGES SVG Capital . . . . . . . .236.6 -9.4 250.0 125.2 Grainger . . . . . . . . . . .103.9 1.9 145.0 86.3 Betfair Group . . . . . . .996.0 -13.0 1550.0 882.0 Vatukoula Gold Mi . .163.0 -7.0 227.0 84.
GAS, WATER & MULTIUTILITIES Spirax-Sarco Engi . .1850.0 -25.0 2025.0 1240.0 Tarsus Group . . . . . .138.5 1.5 145.0 105.0
AG Barr . . . . . . . . . .1077.0 -2.0 1304.0 791.5 Temple Bar Inv Tr . . .886.0 -10.5 913.5 717.0 Weir Group . . . . . . .1618.0 6.0 1861.0 735.5 Trinity Mirror . . . . . . . .85.5 -0.8 170.1 64.5 Helical Bar . . . . . . . . .281.0 -1.1 358.8 262.0 Carnival . . . . . . . . . .2948.0 7.0 3153.0 2037.0 Young & Co's Brew .618.0 0.5 670.0 485.
Britvic . . . . . . . . . . . . .448.7 2.0 518.0 404.4 Templeton Emergin .630.0 -5.0 689.5 471.5 Centrica . . . . . . . . . . .326.1 -1.0 346.1 263.9 Ferrexpo . . . . . . . . . . .420.2 -4.7 447.9 197.1 United Business M . .705.5 -3.0 712.0 409.7 London & Stamford .129.0 2.0 133.5 110.3 Compass Group . . . .568.5 1.0 594.0 425.1
Diageo . . . . . . . . . . .1241.0 20.0 1250.0 1000.0 TR Property Inv T . . .167.4 -0.8 171.2 132.3 National Grid . . . . . . .547.0 -4.5 596.2 484.2 Talvivaara Mining . . .583.0 -2.0 620.0 342.4 UTV Media . . . . . . . . .120.0 0.0 151.0 95.0 Savills . . . . . . . . . . . . .351.8 1.8 399.0 273.1 Domino's Pizza UK . .527.5 -1.5 586.0 309.2
SABMiller . . . . . . . . .2073.5 -24.0 2306.0 1650.0 TR Property Inv T . . . .79.6 0.5 80.8 59.2 Northumbrian Wate .304.7 0.5 361.5 252.8 Wilmington Group . .174.5 0.0 176.0 125.0 St. Modwen Proper . .174.6 1.1 204.5 135.4 easyJet . . . . . . . . . . . .380.0 -4.9 496.5 348.6
Witan Inv Trust . . . . .513.5 -0.5 522.0 409.9 Pennon Group . . . . . .619.0 0.5 650.0 482.9 INDUSTRIAL TRANSPORTATION UK Commercial Pro . .80.0 -0.2 85.0 72.8 Enterprise Inns . . . . .106.3 -1.7 139.3 84.4
CHEMICALS WPP . . . . . . . . . . . . . .777.0 -16.0 802.0 572.5
FINANCIAL SERVICES Severn Trent . . . . . .1424.0 8.0 1499.0 1086.0 BBA Aviation . . . . . . .224.0 -1.2 228.0 158.0 Yell Group . . . . . . . . . .11.0 0.0 59.0 10.3 Unite Group . . . . . . . .209.3 1.1 302.6 163.0 FirstGroup . . . . . . . . .386.6 -4.6 412.6 336.0
AZ Electronic Mat . . .298.9 -1.1 317.5 249.0 United Utilities . . . . .555.5 3.0 628.5 507.0 Forth Ports . . . . . . . .1325.0 -15.0 1433.0 1025.0 REAL ESTATE INVEST. TRUSTS Go-Ahead Group . . .1270.0 -25.0 1490.0 1042.0
Croda Internation . .1525.0 8.0 1625.0 751.0 3i Group . . . . . . . . . . .310.0 -7.4 340.0 250.0 MINING Greene King . . . . . . .446.6 -5.9 491.4 376.2
GENERAL INDUSTRIALS Stobart Group Ltd . . .144.0 -0.4 162.2 125.6
Elementis . . . . . . . . . .131.1 4.5 143.0 50.5 3i Infrastructure . . . .113.1 -2.6 125.2 101.1 African Barrick G . . .518.5 -8.0 670.0 503.0 Big Yellow Group . . .328.1 -1.4 353.3 284.4 InterContinental . . .1316.0 19.0 1332.0 887.0
Aberdeen Asset Ma .219.4 3.9 225.0 112.8 Cookson Group . . . . .632.5 -6.5 687.5 367.4 NON LIFE INSURANCE British Land Co . . . . .520.5 2.0 537.0 418.3 International Con . . .275.0 -10.0 328.1 184.2
Johnson Matthey . .1950.0 19.0 2100.0 1446.0 Anglo American . . .3075.0 -51.0 3410.0 2254.0
Victrex . . . . . . . . . . .1403.0 -15.0 1522.0 806.0 Ashmore Group . . . .350.0 -1.3 383.7 217.9 DS Smith . . . . . . . . . .212.9 -2.0 226.0 103.9 Admiral Group . . . . .1637.0 -12.0 1693.0 1122.0 Antofagasta . . . . . . .1390.0 -18.0 1634.0 761.0 Capital Shopping . . .382.0 2.3 424.8 301.0 JD Wetherspoon . . . .443.9 -7.6 548.5 386.5

EU SHARES US SHARES
Price Chg High Low Price Chg High Low
AIR LIQUIDE........................................92.40
ALLIANZ ..............................................97.50
ALSTOM ..............................................41.12
0.20
-0.97
-0.12
99.15
99.69
50.73
70.60
75.82
30.78
Don’t miss “Breaking 3M ........................................................88.50
ABBOTT LABS ...................................47.96
ALCOA ................................................16.24
-1.82
-0.21
-0.19
91.49
55.66
16.72
67.9
44.5
9.8
ANHEUS-BUSCH INBEV ....................41.85 0.50 46.33 33.50 AMAZON.COM..................................176.70 -0.15 191.60 105.8
ARCELORMITTAL ..............................27.32
AXA......................................................15.15
BANCO SANTANDER...........................8.76
-0.05
0.03
-0.28
35.46
17.60
10.60
21.33
10.88
7.00
News” with our new AMERICAN EXPRESS........................44.80
AMGEN INC.........................................57.16
APPLE ...............................................341.40
-0.99
-0.13
3.95
49.19
61.26
348.60
36.6
50.3
190.2
BASF SE..............................................56.12
BAYER.................................................54.50
BBVA .....................................................8.82
BMW ....................................................56.08
0.19
0.33
-0.27
0.85
61.88
59.17
11.71
65.49
39.12
43.27
6.87
28.28
10:30 AM EMAIL AT&T....................................................28.76
BANK OF AMERICA...........................13.63
BERKSHIRE HATAW B......................83.25
BOEING CO.........................................72.24
0.28
-0.29
0.31
-0.49
30.10
19.86
85.86
76.00
23.7
10.9
67.8
57.1
BNP PARIBAS.....................................54.55 -0.62 59.34 40.81 BRISTOL MYERS SQUI......................26.03 0.03 28.00 22.2
CARREFOUR ......................................33.80
CREDIT AGRICOLE ............................10.94
-0.36
-0.22
41.28
13.78
30.85
7.87
Each day we’ll cover the morning’s breaking CATERPILLAR....................................94.39
CHEVRON ...........................................94.08
-0.18
-0.02
96.80
94.53
50.5
66.8
CRH PLC .............................................16.02
DAIMLER .............................................55.21
0.49
0.69
22.00
59.09
11.51
29.93
news, give you current market analysis and CISCO SYSTEMS................................21.54
COCA-COLA .......................................62.96
0.37
-0.29
27.74
65.88
19.0
49.4
DANONE..............................................44.74
DEUTSCHE BANK ..............................43.64
-0.23
-0.70
48.50
55.25
39.35
35.93 the most up-to-date financial headlines. COLGATE PALMOLIVE......................80.12
CONOCOPHILLIPS.............................67.48
0.28
-0.62
86.15
68.99
73.1
46.6
DEUTSCHE BOERSE .........................57.27 0.02 59.00 45.45 CVS/CAREMARK................................35.16 0.17 37.82 26.8
DEUTSCHE TELEKOM .........................9.91 -0.06 10.64 8.51 DU PONT(EI) DE NMR........................49.04 0.15 50.54 31.8
E.ON.....................................................24.75 -0.36 28.93 20.86 EXXON MOBIL....................................78.68 0.09 79.18 55.9
ENEL......................................................4.08 -0.03 4.28 3.42 Sign up now to ensure you FORD MOTOR.....................................17.89 -0.04 18.97 9.7
ENI .......................................................17.61 -0.10 17.97 14.30 GENERAL ELECTRIC.........................19.98 -0.06 20.28 13.7
FRANCE TELECOM............................16.24 -0.02 17.92 14.01 receive our free email. GOLDMAN SACHS GRP ..................161.98 -4.29 186.41 129.5
GDF SUEZ ...........................................29.55 -0.28 30.05 22.64 GOOGLE A........................................619.91 8.83 642.96 433.6
GENERALI ASS. .................................15.72 0.00 18.39 13.31 HEWLETT PACKARD.........................47.08 -0.47 54.75 37.3
IBERDROLA ..........................................6.27
ING GROEP CVA ..................................8.07
INTESA SANPAOLO.............................2.37
-0.06
-0.16
-0.05
6.40
8.32
2.99
4.38
5.34
1.88
Visit: www.CityAM.com/newsletter HOME DEPOT.....................................37.16
IBM.....................................................161.44
INTEL CORP .......................................21.55
0.51
1.81
0.31
37.18
164.35
24.37
26.6
116.0
17.6
KON.PHILIPS ELECTR .......................23.35 0.12 27.01 20.34 J.P.MORGAN CHASE.........................44.87 -0.15 48.20 35.1
L'OREAL..............................................85.42 0.25 88.00 70.90 JOHNSON & JOHNSON.....................61.08 -1.14 66.20 56.8
LVMH .................................................115.65 2.35 129.05 74.19 WORLD INDICES KRAFT FOODS A................................31.18 -0.25 32.67 27.0
MUNICH RE .......................................114.85 -1.40 123.55 98.38 MC DONALD'S CORP ........................75.48 0.10 80.94 62.3
Price Chg %chg Price Chg %chg Price Chg %chg Price Chg %chg
NOKIA....................................................7.68 -0.26 11.82 6.59 MERCK AND CO. NEW ......................33.36 -0.44 40.29 30.7
FTSE 100 . . . . . . . . . . . . . . 5917.71 -26.14 -0.44 S&P 500 . . . . . . . . . . . . . . . 1291.18 0.34 0.03 CAC 40 . . . . . . . . . . . . . . . . 4019.62 -13.59 -0.34 BOVESPA SAO PAOLO . 69426.57 293.48 0.42
REPSOL YPF.......................................22.11 -0.34 23.00 15.31 2719.25 3.64
1.7 0.06 MICROSOFT........................................28.45 0.07 31.58 22.7
FTSE 250 INDEX . . . . . . . 11501.60 -71.84 -0.62 NASDAQ 100 . . . . . . . . . . . 2304.03 0.16 SHANGHAI SE INDEX . . . . 2677.43 -18.29 -0.68 TWN-WEIGHTED INDEX . . 8729.79 133.45 1.55
RWE .....................................................53.66 -1.08 68.34 47.65 FTSE UK ALL SHARE . . . . 3069.73 -14.15 -0.46 FTSEUROFIRST 300 . . . . . 1144.14 -7.04 -0.61 HANG SENG. . . . . . . . . . . 23788.83 -12.95 -0.05 STI . . . . . . . . . . . . . . . . . . . . 3181.15 -4.61 -0.15 OCCID. PETROLEUM.........................97.15 -0.03 99.57 72.1
SAINT-GOBAIN ...................................43.13 0.41 43.39 27.81 FTSE AIM ALL SH . . . . . . . . 944.67 -8.79 -0.92 NIKKEI 225 AVERAGE. . . 10464.42 119.31 1.15 S&P/ASX 20 INDEX . . . . . . 2871.60 13.90 0.49 IGBM . . . . . . . . . . . . . . . . . . 1089.04 -16.40 -1.48 ORACLE CORP...................................32.29 -0.11 32.68 21.2
SANOFI-AVENTIS ...............................50.65 -0.33 57.45 44.01 DOW JONES INDUS 30 . . 11977.19 -3.33 -0.03 DAX 30 PERFORMANCE. . 7059.01 -8.76 -0.12 ASX ALL ORDINARIES . . . 4909.00 20.90 0.43 SWISS MARKET INDEX. . . 6580.33 -23.47 -0.36 PEPSICO .............................................65.77 -0.41 68.11 58.7
SAP ......................................................40.57 0.10 40.98 30.91 PFIZER ................................................18.47 0.02 19.92 14.0
SCHNEIDER ELECTRIC ...................112.65
SIEMENS .............................................93.61
1.45
-0.24
120.00
96.00
72.00
60.90
COMMODITIES CREDIT & RATES PHILIP MORRIS INTL .........................57.53
PROCTER AND GAMBLE ..................66.70
0.43
0.12
60.87
66.95
2.0
39.3
SOCIETE GENERALE.........................46.93 -1.32 48.94 29.71 LON GD ONCE FIX AM...........1326.00 -21.50 NICKEL CASH......................22675.00 480.00 BoE IR Overnight ............................0.500 0.00 Euro Base Rate ...............................1.000 0.00 QUALCOMM INC ................................51.52 0.03 53.10 31.6
TELECOM ITALIA .................................1.07 -0.01 1.18 0.88 SILVER LDN FIX AM ..................26.71 -0.70 TIN CASH.............................17500.00 250.00 BoE IR 7 days .................................0.500 0.00 Finance house base rate ................1.000 0.00 SCHLUMBERGER ..............................83.25 -1.00 87.70 51.6
TELEFONICA ......................................18.35 -0.10 19.69 14.67 MAPLE LEAF 1 OZ...................809.00 2.50 BoE IR 1 month ..............................0.500 0.00 US Fed funds...................................0.250 0.00 TRAVELERS CIES..............................56.23 0.61 57.78 47.6
ZINC CASH ............................2215.00 32.50 BoE IR 3 months ............................0.500 0.00 US long bond yield .........................4.020 0.00
TOTAL .................................................42.62 -0.29 44.63 35.66 ENGL.SOVEREIGN NEU ............91.11 0.61 UNITED TECHNOLOGIE ....................81.73 0.21 81.73 62.8
BRENT SPOT INDEX..................97.34 0.19 BoE IR 6 months ............................0.500 0.00 European repo rate .........................0.868 -0.01
UNIBAIL-RODAMCO SE...................140.85 0.60 155.95 105.19 LON PLATINUM AM ...............1787.00 -37.00 UNITEDHEALTH GROUP...................40.62 0.81 41.02 27.1
SOYA ..........................................0.00 0.00 LIBOR Euro - overnight ..................0.953 0.13 Euro Euribor ....................................0.802 0.19
UNICREDIT............................................1.83 -0.05 2.30 1.46 LON PALLADIUM AM...............786.00 -32.00 LIBOR Euro - 12 months ................1.520 0.01 The vix index ...................................17.59 0.02 VERIZON COMMS ..............................35.79 0.55 37.70 24.7
UNILEVER CVA...................................22.19 -0.68 24.11 20.68 ALUMINIUM CASH .................2176.00 -18.50 COCOA ..................................3312.00 0.00 WAL-MART STORES..........................57.26 1.21 57.29 47.7
LIBOR USD - overnight...................0.236 0.00 The baltic dry index ........................1.345 -25.0
VINCI....................................................43.03 -0.10 44.98 33.01 COPPER CASH ......................7347.00 36.50 COFFEE...................................239.10 0.00 LIBOR USD - 12 months .................0.780 0.00 Markit iBoxx...................................211.29 1.01 WALT DISNEY CO..............................39.86 -0.08 40.00 28.7
VIVENDI ...............................................21.83 -0.12 22.07 16.18 LEAD CASH ...........................2025.50 24.50 KRUG.....................................1376.00 -20.30 Halifax mortgage rate .....................3.500 0.00 Markit iTraxx....................................97.13 -2.29 WELLS FARGO & CO.........................32.70 0.00 34.25 23.0
 24 Wealth Management | Foreign Exchange
DOLLAR-YEN
COMES OUT
OF THE SHADE
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
A
FTER DROPPING to a low of ¥80.93 at
the end of last year – a move that
induced more than a few heart palpita-
tions among policy makers in Tokyo –
dollar-yen has steadily climbed higher in
January as the American economy has shown
clear signs of improvement. Today’s federal
open market committee (FOMC) rate decision
could set the tone for the rest of the week.
No one in the capital markets anticipates
any major news from the Fed, but traders will
be looking for any clues in the communique
that could signal a possible change of posture
in the near future. Given that weekly jobless
claims have consistently held below the
450,000 level since November, the Fed may
upgrade its assessment of the American econ-
omy. The improvement in the labour market is
gradual and therefore unlikely to have any
immediate impact on the Fed’s continuing pol-
icy of quantitative easing (QE), but if markets
become convinced that US monetary officials
will not expand the QE program beyond the
current $600bn limit, dollar-yen could
strengthen.
GDP DATA IS KEY
In addition to the FOMC meeting, the currency
markets will also focus on the release of US
fourth quarter GDP data due on Friday at
13:30. Consensus calls are for a significant
increase to 3.5 per cent from 2.6 per cent the
quarter prior. If the GDP data meets or beats
market expectations it will help to confirm the
bullish recovery thesis providing more fuel for
the dollar-yen rally.
Dollar-yen has spent the beginning of 2011
trading in a very narrow range between
¥81.00-¥83.00 as most speculative flows
have been focused elsewhere. It’s possible that
the pair may remain neglected as the euro
continues to set fresh highs every day, but if
this week’s US economic data surprises well,
dollar-yen may finally attract attention. If dol-
lar-yen can break above the long term resist-
ance at the ¥84.00 level it could be the start
of a larger rally towards ¥90.00.
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CITYA.M. 26 JANUARY 2011
Sterling’s rally ends as
GDP figures disappoint
The pound will not
recover losses soon,
says Daniel Knowles
T
HE British economy has lost a lot of
momentum. Last quarter it seemed
to be roaring along like a Jaguar,
growing by 0.7 per cent. Now, more
like an old Rover, it seems to have stalled in
the snow. Yesterday’s GDP statistics for the
fourth quarter of 2010 revealed a fall in
output of 0.5 per cent when the market
consensus expected it to increase by about
that much.
As a result, sterling was frozen out.
Against the dollar, it dropped by 1.30 per
cent to $1.579. Against the euro, it was
down by 1.35 per cent. Few now think that
an interest rate rise – a hot topic of conver-
sation last week – is still likely in the sum-
mer. Instead, the Bank of England (BoE)
seems to be caught in a trap between infla-
tion and low growth – and is likely to care
more about the latter.
But the GDP figures released yesterday
were only a first estimate, based on just 40
per cent of the economy. The Office for The economy seems
National Statistics (ONS) also blamed much to have stalled in the
of the fall on last month’s snow; which, if snow
true, might make for a big rebound in the Picture: REUTERS
next quarter’s data. That suspicion might
have limited the fall of sterling yesterday.
But as the shock filters through, might not argues that it would be wiser to buy the ice sectors seem not to be doing so badly
sterling have further to fall? dollar, which should do well regardless. after all, then sterling may recover some of
Glenn Uniacke, a senior dealer at But others are less pessimistic. As Jeremy its poise. If the next revision to the GDP
Moneycorp, certainly thinks so. As he First, chief economist at World First, point- data softens yesterday’s blow, then it may
points out: “These figures are really ed out, revised GDP data can be “wildly dif- even leap back up.
absolutely horrendous . . . they’re scary – as ferent”, and many traders yesterday had Based on yesterday’s figures however,
good as another recession”. Even if they arguably been “looking for a reason to that seems unlikely any time soon. Only
prove to be slightly out, Uniacke argues sell”. Indeed, Ian Harwood, chief econo- the most contrarian of traders would seem
that sterling could well drop back to the mist at Evolution Securities, goes one fur- keen to buy sterling right now.
$1.45-$1.50 range quite easily. He reckons ther, pointing out that the ONS has
that $1.55 is a decent target for the “hardly covered itself in glory in recent ANALYSIS l Sterling dropped precipitously
moment, and if sterling breaks through years” with its GDP estimates. Harwood on yesterday's news
GBP/USD
that, it could well drop much further. points to the monthly composite PMI sur-
1.600
Against the euro, however, further falls vey as contradicting the ONS figures. That
are less assured. As Uniacke points out, figure was buoyed up by exceptionally
much of Europe suffered from the snow as strong manufacturing data, however,
badly as Britain. European GDP figures are while services and construction registered 1.590
due to be released in February – if they declining figures.
prove to be as bad as in the UK, then the “The market’s attention is likely to turn
pound could well recover. But if they are to what light the next raft of UK PMI sur- 1.580
much stronger, sterling would be likely to veys due to be released next week will cast”
lose ground quickly. Given that, Uniacke says Harwood. If the construction and serv- 6:00 8:00 10:00 12:00
Get started at
gftuk.com.
CITYA.M. 26 JANUARY 2011 Wealth Management | Foreign Exchange 25

THE
EFSF bonds do TIPSTER
CABLE COULD

not address the START TO

HEAD HIGHER

T
HE pound took something of a pum-
melling off the back of the surprise UK

main problem GDP data although much of the recent

upside came from the supposition that
the Bank of England would hike rates to rein in
inflation – regardless of the economic growth
implications. Obviously today’s Monetary Policy
Committee meeting minutes will make for inter-
esting reading but with yesterday’s sell-off
Short term solutions will only kick away the doubtless being bundled with a degree of profit-
taking, cable may be able to start grinding its
crisis for so long, writes Donata Huggins way higher once again. The current IG Index
price on sterling-dollar is $1.5788-$1.5790.
Sterling-Australian dollar hit Tipster’s target

T
HE Eurozone seems to escape dis-
aster every week. Unsurprising
since it always seems to have a
new tactic up its sleeve. Yesterday’s
was the first auction of the European
financial stability facility (EFSF) bonds.
Investors poured into bonds to the tune
of €40bn.
This should have been predictable con-
sidering the bonds are AAA-rated, offer
higher yields than German bunds and
most investors have a vested interest in
the single currency’s survival.
But this was still not enough to give
the euro stability. It fell sharply against
the dollar in the morning session
despite the huge demand for the EFSF
bonds.
While the euro’s decline is partly
thanks to positive US data, this should
not have overshadowed the enormous
€40bn-worth of bids for EFSF funds from
the world’s biggest public and private
funds. Particularly considering brokers
are reported to have said they had never
taken a larger order book on a bond ever,
government or corporate.
THE FUNDAMENTAL PROBLEM
Senior trader at WorldSpreads Gary
Thomson says: “While some analysts are
now calling the dollar a good buy, I think
the reason for today’s move is probably
more to do with traders’ underlying con-
cerns about the sustainability of the
euro. People don’t think it deals with the
euro’s fundamental problems.”
Thomson says that WorldSpreads has
reacted to this view by making a market
on how long the euro will last: “People
are flooding into the trade. The over-
whelming response has been to go short
on a member country withdrawing with-
in the next 700 days.”
OPTIMISM FOR THE EURO
But IG Index’s chief market strategist
David Jones is more optimistic for the
single currency: “The fact the bond issue
was oversubscribed eight times over
emphasises the fact that there’s still an
awful lot of life left in the common cur-
rency. The short-term reaction just after
the bond auction began was positive for
the euro.” But he concedes that any
future gains for the currency are “unlike-
ly to be in the stratospheric category.”
Michael Hewson of CMC Markets also
thinks that the euro is unlikely to rally:
“Until countries like Spain start thinking
seriously about restructuring their debt,
the euro’s problems will come creeping
back. The EFSF bond is a bit like kicking
a can down the road, it only delays the
problem – you can’t kick it away forever.”
The Eurozone’s delaying tactics maybe
of Au$1.6200 early on Monday morning, but
since then has plummeted all the way to
Au$1.5853, with the pair getting crushed by
140 basis points following the dreadful GDP fig-
ures. The 50-day exponential moving average
halted the slide for now, but those thinking of
going long again should maybe wait until we
reach the Au$1.5800 level. Spread Co offers a
spread on sterling-Australian dollar of
Au$1.5872-Au$1.5884.
The Canadian dollar has weakened against
the euro on the back of falling commodity
prices. Crude oil is Canada’s biggest export and
The problem has good enough until then, leaving the euro since it has been declining the past few days, so
never gone far range bound against the dollar in the medi- has the loonie. With gold and oil expected to
um-term. But beware, for as long as the real head lower, we could see the currency follow
Picture: GETTY solution is ignored, the currency will tend suit. Capital Spreads is quoting Canadian dol-
towards the downside. lar-euro €1.3603-€1.3613.
Go short on sterling-Swiss franc because
ANALYSIS l The performance of euro-dollar over the last five days yesterday’s fourth quarter GDP figures have
1.370 provided a much-needed reality check for ster-
$ ling bulls. The -0.5% (non-annualised) drop in
GDP marks the weakest quarter since 2009.
1.360
Even allowing for the bad weather, the Office of
National Statistics estimates that growth
would have been flat. In recent days more
astute players have re-established short posi-
1.350
tions on sterling because the US and the
Eurozone have moved forward. Yesterday’s
data seems to bear this out and opens up more
1.340 marked downside for sterling in coming weeks.
ETX offers a spread on sterling-Swiss franc.
19 Jan 20 Jan 21 Jan 24 Jan 25 Jan Donata Huggins

FOREX ANALYST PICKS

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

My pick: Buy US dollar-Canadian dollar at Ca$0.9900
Expertise: Technical analysis
Average time frame of trades: 1 to 6 weeks
The daily studies are starting to look a little stretched and this is in
conjunction with longer-term cyclical studies. These signs warn of a
major base forming. This leaves us looking for opportunities to buy
rather then to sell into the downtrend. A bullish outside week provides
added confirmation of this and should help to accelerate gains over the
coming days.
My pick: Short Australian dollar- US dollar (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
The fundamentals point toward losses on Australian dollar-dollar: expecta-
tions of an Australian rate hike are withering as the consumer price index has
underperformed and the economy is being weighed down by a slowdown in
China. Meanwhile, the Aussie remains the most overvalued major currency
against the greenback on a purchasing power parity basis. I will look for con-
firmation on a break below range support at $0.9868 to enter short, initially
targeting $0.9586. A stop will be triggered on a daily close above $1.0007.
My pick: Short Australian dollar-dollar below 0.98
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day to 1 week
The potential in my sterling-Australian dollar and Canadian dollar-yen
setups from last week dissipated (the first hit its first target and little more
and the second never triggered). There are many opportunities out there,
but the fundamentals are thin. A good stand out is the possible Australian
dollar-dollar range break and long-term reversal below $0.98. A close below
this level (preferably alongside a S&P 500 plunge) would be good for a 150
point stop and first target.

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 Lifestyle
26 CITYA.M. 26 JANUARY 2011

| Motors WORDS BY
RYAN BORROFF

An SUV with
a conscience
Kia’s new Sportage is
energy efficient, easy
going and economical

H
ERE’S Kia’s new Sportage, an SUV
crossover that confirms the massive
changes that SUVs have undergone
over the last five years. An ugly, boxy,
polluting gas guzzler this ain’t. In fact it’s
not even a 4x4 (though there is an All-
Wheel-Drive version). This one is 2WD and
has Kia’s all new 1.7 CRDi 114bhp diesel
engine. It also has Kia’s Intelligent Stop and
Go (ISG) system, which shuts down the
engine when the car is stationary to fur-
ther save fuel and reduce emissions. The
car restarts instantly when I’m ready to
move and I soon forget about it entirely.
Together this version can do as much as
54.3mpg (Combined) and all with CO2
emissions of just 135g/Km. Which means
you can have the high seating position, the
look and and the practical functionality of
an SUV without the expense of owning one.
Impressive stuff.
It’s also unusually handsome, thanks to
its sporty stance and muscular styling. It’s
wide and low – which is always good from a It might look
handling perspective – and the use of like a gas guz-
chrome on the outside – in the grille and zler but the
door handles, in particular – give the car a Sportage is no
more opulent look than we have come to ordinary SUV.
expect from Kia in the past. And with its 18-
inch alloy wheels and LED daytime run-
ning lights the Sportage looks as
contemporary as any of its rivals, if not
more so than most of them.
Aimed at families, we find the Sportage
to be more than adequate space-wise and
inside it is certainly comfortable. This is the
top spec “3 Sat-nav” trim level – with
leather seats (which are heated), dual-zone
climate control and 18in wheels plus a nav-
igation kit with a seven-inch screen in the
dashboard. Inside it’s not fantastically dra-
matic – there is some piano black and some
chrome-like details and the instruments
are clear. It’s a perfectly decent car interior.
But the boot too is very spacious, with an easy car to drive. Add this to Kia’s seven-
unusually large 564-litre capacity. The year/100,000-mile warranty and very rea-
panoramic sunroof is amazing. Two sliding sonable price and it’s clear the Sportage is a
blinds close the roof from the sky but on a stress-free winner.
bright day the sunroof is a trip. An anti-trap
system means kids can’t get their fingers
trapped in it either, though God knows THE FACTS:
how they would manage that unless you let KIA SPORTAGE
them play in it on the drive at the week-
ends. Around town I find myself driving PRICE: £23,065
the Sportage conservatively. The cockpit is a 0-60MPH: 11.9secs
nice place and I find the engine responds TOP SPEED: 107mph
well to just pootling about. With a 0-60mph
time of 11.9 seconds progress is unhurried. CO2 G/KM: 135g/km
Not that the Sportage is particularly slow, MPG COMBINED: 54.3mpg
it’s just kind off easy going, or at least it
seems to encourage me to be. It’s also fan- THE VERDICT:
tastically easy to park thanks to good visibil- DESIGN hhhhi
ity and a rear camera system that displays PERFORMANCE hhhii
what’s going on behind you when reverse PRACTICALITY hhhhi
gear is selected. VALUE FOR MONEY hhhhi
Overall I find the Sportage a remarkably

CAR TALK BY RYAN BORROFF

FERRARI TO LAUNCH FOUR WHEEL DRIVE FOR FIRST TIME
Ferrari is launching its first-ever production four-wheel-drive car
at March’s Geneva Motor Show. The car, called the Ferrari FF (for
now) will replace the 612 coupé and has four seats for four adults,
not just two-plus-two, as the 612 has. The car, a front engined
V12, is capable of 0-62mph in 3.7sec, a top speed of 208mph and
emissions of 360g/km. It also has a sizeable boot of 450 litres. So
now you can get back from Ikea really quickly.
ASTON MARTIN SHOWCASES CHIC NEW CITY CAR
Aston Martin’s glamourous new city car, the Cygnet, has been
shown for the first time. Two special launch editions – called
White and Black – come with a bespoke Bill Amberg five-piece
luggage set. The White edition has white paint, silver mesh,
chrome brightwork and white alloy wheels. The Black edition has
black metallic paint, matt black louvers and chrome brightwork.
Priced from £30,995, production begins in April.
BMW X1 GIVEN M SPORT MAKEOVER
BMW has announced the M Sport version of its X1 model. The M
Sport specification adds 17-inch star-spoke M alloy wheels,
chrome plated door sill finishers with M designation, high-gloss
Shadowline exterior trim for the window surrounds, M Sport
multi-function steering wheel, Sport seats and Anthracite headlin-
ing. Prices start at £26,615 OTR for a BMW X1 18d sDrive M
Sport and £27,710 OTR for 18d xDrive M Sport.
 Business Features
Consultation
on UK’s M&A
regime means
big changes
Amalgamation of OFT and Competition
Commission raises fairness concerns
CITY COMMENT
MICHAEL GRENFELL
T
HE government is about to
launch a consultation on major
reforms of Britain’s competition
(antitrust) regime. The competi-
tion rules won’t be changed, but rather
the institutions and procedures by
which they are administered. The
implications for British business and
finance will nonetheless be far-reach-
ing.
Three key elements of the likely pro-
posals are worth highlighting. First,
the government wants to amalgamate
Britain’s two main competition
authorities – the OFT (Office of Fair
Trading) and the Competition
Commission – into a single body. This
was first mooted last autumn, but
there are huge questions about how it
will be achieved. Resolving these is crit-
ical to whether businesses will receive
fair and effective treatment in UK
“merger control” (competition scruti-
ny of M&A transactions) and “market
investigations” (eg those on the super-
markets and airports sectors in the
past few years).
FIRST PHASE
Currently, for both merger and market
investigations, the OFT conducts an
initial “first-phase” assessment to see
whether there are any concerns about
competition that require further inves-
tigation; and, if there are, the OFT
then refers the matter to the
Competition Commission for an in-
depth “second phase”.
An advantage of amalgamation is
reducing unnecessary duplication
between the two phases, which would
save costs. But for amalgamation to
work, a couple of questions in particu-
lar need to be addressed. One concerns
fairness: if the same single body is con-
ducting both phases, it’s important to
ensure that the final outcome at the
second phase is not prejudiced by the
concerns formed in the minds of offi-
cials at the first phase – so-called “con-
firmation bias”. There will need to be
different people within the single body
taking the decisions at the first and
second phases – but without losing the
27
| Law
Here’s hoping
they’re compatible
Picture: GETTY
savings benefits of amalgamation;
administrative support and other over-
heads can still be shared. The other
point is that, currently at the CC, busi-
nesses involved in second-phase merg-
er or market investigations have the
benefit of dealing face-to-face with sen-
ior decision-makers (the CC “mem-
bers”), not just with junior case
officers – reassuring them that their
views are being given a fair hearing. It
is desirable that this benefit should
somehow be retained in the new sys-
tem.
MERGERS AND INQUISITIONS
The second major proposal relates to
merger notifications (filings). At pres-
ent, the UK competition regime is
unusual in not obliging companies in
M&A transactions to notify the compe-
tition authorities. For mergers under
UK jurisdiction, notifying the competi-
tion authorities is voluntary –
although, if there are real competition
concerns, parties who don’t notify take
the risk that the deal may subsequent-
ly be investigated and ultimately
unwound. The government is contem-
plating introducing a mandatory noti-
fication system. Possible advantages of
mandatory notification include ensur-
ing that anti-competitive mergers do
not escape detection – but that needs
to be balanced against the unnecessary
regulatory burden of having to notify
even mergers that raise no real compe-
tition concerns.
Third – the system for investigating
alleged cartels and other illegal anti-
competitive behaviour. Here, responsi-
bility has always rested with just one
competition authority in the UK, the
OFT. But that poses a fairness problem.
The same officials who first suspect
the alleged illegality, and then start
investigating it, are also responsible for
pronouncing the final decision on
whether the company has behaved ille-
gally, and indeed for imposing penal-
ties (including substantial fines). It is
as if, in an alleged robbery, the investi-
gating police were allowed to give the
verdict – and indeed to pass sentence.
This hardly accords with modern prin-
ciples of fairness and justice – and
there are signs that the government
may use this opportunity to introduce
new procedural safeguards, which
would be a welcome development.
Next month’s consultation, then,
heralds significant changes in the way
UK competition law is applied – and an
important opportunity for those affect-
ed to have their say.
Michael Grenfell is a competition law
Partner at Norton Rose LLP
 28 Lifestyle | TV& Games CITYA.M. 26 JANUARY 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Rip Off Britain:
BBC News
8pm DIY SOS: The Big
Build – Chippenham
9pm Crimewatch
10pm BBC News 10.25pm Regional
News 10.35pm Crimewatch Update
10.45pm The National Lottery
Wednesday Night Draws 10.55pm
Film 2011 with Claudia Winkleman:
National Lottery Update 11.35pm
FILM Silkwood 1983; Weatherview
1.45am Sign Zone: Country Tracks
2.40am Climbing Great Buildings
3.10am Filthy Rotten Scoundrels
3.55am-6am BBC News
6pm Eggheads
6.30pm Great British
Railway Journeys
7pm Top Gear: Jeremy
Clarkson test-drives the
Skoda Yeti.
8pm Michel Roux’s Service: The
chef tests the trainees in a
temporary restaurant.
9pm Posh and Posher: Why
Public School Boys Run Britain
10pm Have I Got Old News for
You: With guest host Chris
Addison.
10.30pm Newsnight: Weather
11.20pm The League Cup Show
12am The Planets
12.50am BBC News
3.55am-6am Close
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm CHOICE The National 7.55pm 4thought.tv 7.30pm Monkey Life;
Television Awards 2011: Dermot 8pm CHOICE Will My Crash Five News Update
O’Leary presents the star- Diet Kill Me? 8pm Cowboy Builders;
studded ceremony from the O2. 9pm Mary Portas: Secret Five News Update
10pm ITV News at Ten Shopper: The presenter 9pm CHOICE NCIS
10.30pm London News examines sofa superstores. 10pm Law & Order:
10.35pm The Secret Caribbean 10pm The Joy of Teen Sex Criminal Intent
with Trevor McDonald: 11.05pm Shameless 10.55pm Law & Order: THE NATIONAL TELEVISION
The broadcaster visits 12.10am Music on 4: 4Play: Adele
Special Victims Unit AWARDS 2011 ITV1, 7.30PM
islands in the region. 12.35am Music on 4: Mercury Prize The biggest names on the small screen
Sessions 12.50am My Family’s 11.55pm Poker
11.35pm Police, Camera, Action! Crazy Gap Year 1.50am Animal 12.55am SuperCasino gather at the O2 for the star-studded
12.30am The Zone; Madhouse 2.45am Food: What 4.05am Rory and Paddy’s Even ceremony celebrating the best of
ITV News Headlines Goes in Your Basket? 3.40am Greater British Adventure British TV over the past year.
2.35am FILM Cry Wolf: Horror, Great British Brands 3.50am 4.55am Rough Guide to Eco
starring Lindy Booth. 2005. Brothers & Sisters 4.35am ER Escapes 5.10am Wildlife SOS
4am-5.30am ITV Nightscreen 5.25am-6.10am Countdown 5.35am-6am House Doctor

SKY SPORTS 1 BRITISH EUROSPORT 2.50am Charmed 4.30am HISTORY DISCOVERY HOME &
SATELLITE & CABLE

Celebrity Four Weddings

7pm Live Carling Cup Football
10pm Football Special 11pm
FIFA Futbol Mundial 11.30pm
Football’s Greatest 12am Copa
Del Rey Football 2am
Champions Tour Golf 3am
FIFA Futbol Mundial 3.30am
Copa Del Rey Football 5.30am-
6am European Tour Weekly
SKY SPORTS 2
6.30pm International One-Day
Cricket 10pm Cricket World
Cup 11pm International One-
Day Cricket 2.30am Cricket
World Cup 3.30am-5am
International One-Day Cricket
SKY SPORTS 3
6.55pm Live Copa Del Rey
Football 9pm Live Copa Del
Rey Football 11pm Trans World
Sport 12am Champions Tour
Golf 1am Inside the PGA Tour
1.30am European Tour Weekly
2am Bowls 4am-5am Trans
World Sport
7pm Yacht Club 7.10pm Live
Figure Skating 9.30pm
Australian Open Tennis 12am-
12.30am Game, Set and Mats
2.30am-6am Live Australian
Open Tennis
ESPN
6.45pm Premier League World
7.15pm Live Scottish Premier
League Football: Hibernian v
Rangers (Kick-off 7.45pm).
10pm Coppa Italia 11.45pm
FIS Alpine Ski World Cup
Report 12.15am ESPN Kicks:
Extra 12.30am Live Basketball
2.30am Live NBA Basketball
5am ESPN Press Pass
5.30am-6am ESPN Game of
the Week
LIVING
7pm Ghost Whisperer 8pm
Four Weddings US 9pm Bones
10pm Grey’s Anatomy 11pm
Criminal Minds 12am CSI:
Crime Scene Investigation
5.20am-6am Maury
7pm Heir Hunters: Looking for HEALTH
the heirs to two unclaimed 7pm A Baby Story 8pm 10
fortunes. 8pm Ax Men 10pm
BBC THREE IRT Deadliest Roads 11pm The
Years Younger: The team make
7pm Almost Famous IV over a mother of three. 9pm
True Story 12am Ax Men 2am
8pm FILM National Treasure: Mystery ER: A woman is WILL MY CRASH DIET KILL ME?
Book of Secrets 2007. 10pm America’s Toughest Jobs 3am admitted with severe abdominal CHANNEL4, 8PM
Britain’s Nazi King 4am UFO pains. 10pm Hospital Sydney
Ready Steady Drink 11pm
Files 5am-6am Deep Sea
Dietician Anu Bhatia explains the
Family Guy 11.45pm Being 11pm The Trauma Team: A effects of extreme dieting methods on
Detectives
Human 12.45am Almost woman suffers a riding the human body and reveals which are
Famous IV 1.45am Ready
DISCOVERY accident. 12am Mystery ER the best alternatives to lose weight.
Steady Drink 2.40am Being 1am Hospital Sydney 2am The
8pm How Do They Do It? Trauma Team 3am 10 Years
Human 3.40am Hotter
8.30pm How It’s Made 9pm Younger 4am Bringing Home
Than My Daughter 4.10am-
5.10am How Drugs Work Great White Silence with James Baby 5am-6am A Baby Story
Cracknell 10.30pm Great
E4 White Silence: How Did They SKY1
7pm Hollyoaks 7.30pm Do It? 11pm Swords: Life on 8pm Dream Lives for Sale 9pm
Friends 9pm FILM One Fine the Line 12am Bear Grylls: Born Louie Spence’s Showbusiness
Day 1996. 11.10pm Alan Carr: Survivor 1am Deadliest Catch 10pm Lie to Me 11pm Ross
Chatty Man 12.15am 2am Mystery Investigator: Olly Kemp on Gangs 12am Road
Scrubs 1.10am RuPaul’s Drag Steeds 3am How the Universe Wars 1.50am Miami SWAT NCIS
Race 2.10am Alan Carr: Chatty Works 3.50am More Industrial 2.40am 99 Most Bizarre CHANNEL5, 9PM
Man 3.05am Beauty and the Revelations 4.40am Rory 3.30am The 4400 4.20am The team investigates the death of a
Geek 3.50am The Loop McGrath’s Best of British Don’t Forget the Lyrics Marine off the coast of Tanzania, but
4.10am Life Unexpected Engineering 5.30am-6am How 5.10am-6am Are You Smarter matters become complicated when it is
4.50am-6am Switched Does That Work? Than Your 10 Year Old? discovered he had a link to Ziva.

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

QUICK CROSSWORD
  

SUDOKU KAKURO
14 15 39 26 4 16 
12 3 4
16 11 27   
45
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 35 6
9 29
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 12 16 21
   
above or to the left of it. 12 29
You can only use the digits 1-9 13 30 
 and you must not use the 6 8   
same digit twice in a block. 24 34 17 10
    The same digit may occur 10 11
15
    more than once in a row or
column, but it must be in a
23
17
11
5
15
  
16 18
   separate block.
4 14 
45
  7 7 13
 

   ACROSS DOWN
1 Roman cloak (4) 1 Paper hand-
   
    WORDWHEEL F A
3
5
Ambush (6)
Insect (3)
kerchief (6)
2 Endure (5)
3 Soaked with
Using only the letters in the Wordwheel, you have 6 House attached to
 ten minutes to find as many words as possible,
N S one other (4) a liquid (3)
7 4 Quickly (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A Item of headgear with
a tall crown (3,3) 8 Pulse vegetable (3)

LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
C R 9
14
Downplay (10)
Living quarters
10 Singing couple (3)
11 Intentionally so
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
T M in the bow of a written (used after
merchant ship (10) a printed word) (3)
QUICK CROSSWORD 4 1 2 6 1 3 17 Gigantic African and 12 Small measure
P L B A P T I S E
2 9 7 5 4 8 3 6 1 SUDOKU          Australian tree with of drink (3)
6 8 7 9 4 2 edible fruits (6)
A L O N E O C          13 Former minor
1 7 9 2 9 4
R O A P R I O R I
5 6 1 8 2 7 3
         19 In the centre of (4) parish official (6)
S I T I N L A
        
O E S I T E P 5 9 7 8 9 7 8 6 20 Hand tool used to 14 Blaze (5)
        
N O D S
R
N
M A K E
T R E
A
K
E
3 5 2 4 7
2 3 2
6 1
1 3 9
WORDWHEEL         
21
mark surfaces (3)
Decapitate (6)
15 Subject to laughter
or ridicule (3)
D I M E R C Y         
1 7 1 8 2 7 The nine-letter word was
B E D T I M E I I
A H R U N I N 4 6 3 2 9 7 8 1 5          22 Unemployment 16 Burn with steam (5)
MOONSCAPE benefit (4)
P L A Y B O Y G G 8 9 3 8 9 7          18 Unsound (3)
 Sport
Djokovic confident
of toppling Federer
▲
TENNIS
BY JAMES GOLDMAN
FORMER champion Novak
Djokovic insists he has nothing to
lose against Roger Federer in the
semi-finals of the Australian Open.
The Serb’s maiden, and to date
lone, grand slam success came in
Melbourne three years ago where
he beat Federer at the last four
stage.
The 23-year-old set up a rematch
with the Swiss No2 seed with an
impressive 6-1, 7-6 (7-5), 6-1 victory
against Tomas Berdych of the
Czech Republic.
Djokovic’s head-to-head record
against the 16-time grand slam
champion makes depressing read-
ing – Federer has won 13 of their
SPORT | IN BRIEF
Kellock named Scots’ captain
RUGBY UNION: Glasgow Warriors
lock forward Alastair Kellock has
been named Scotland captain for the
upcoming RBS Six Nations. Scotland
open this season’s tournament away
to France on 5 February. “To get the
chance to captain Scotland for the
opening game is huge,” he said.
Tremlett handed England deal
CRICKET: Surrey paceman Chris
Tremlett has been awarded an incre-
mental contract by the ECB for the
2010-11 season. The 29-year-old
played a key part in this winter’s
Ashes victory. England selector Geoff
Miller said: “We are delighted with
Chris's contribution this winter.”
Denman excites Barber
HORSE RACING: Owner Paul Barber
feels Denman has “never been bet-
ter” ahead of his quest to win the
Cheltenham Gold Cup for a second
time. “He’s in great form, back in full
work, and I believe he's never been
better,” said Barber of the 2008
winner. “We’re doing everything we
can to win the Gold Cup.”
29
“SKY SACK STALWART GRAY
AFTER 20 YEARS OF PUNDITRY”
BROADCASTER FORCED TO ACT IN
LIGHT OF FURTHER EVIDENCE: P30
Swann’s injury may prove
to be a blessing in disguise
news that Graeme Swann will miss the
last four fixtures might be a blessing in
disguise.
The Nottinghamshire twirler (below)
will have to play a massive part
if England are to have a suc-
cessful time of it in the sub-
continent next month.
CRICKET COMMENT A couple of weeks back home
with his feet up will do him the
Djokovic beat
ANDY LLOYD world of good, considering he’s
played almost non-stop cricket
Federer in the IT’S FAIR to say that this one-day series, for two-and-half years.
2008 semi-final
designed to ensure England head to the While the bowling depart-
Picture: ACTION World Cup with their plans set in ment doesn’t worry, the bat-
IMAGES stone, hasn’t gone swimmingly. ting is a touch concerning.
I’m sure England will say a Matt Prior, whose recall I
seven-match marathon, follow- supported, is already effective-
ing on from a grueling Ashes ly on trial after successive
campaign, was bound to be an ducks.
anti-climax, but it’s not like Should he fail again in
these fixtures have been sprung Adelaide, traditionally a bats-
on them. man’s paradise, Andy Flower
Injuries have deprived Andrew might be forced to hastily
Strauss of his strike bowlers, but the rethink his role in the side.
19 encounters. But their most by easing past fellow Swiss
recent high-profile meeting, last Stanislas Wawrinka 6-1, 6- 3, 6-3,
year’s US Open semi-final, is cause said: “Well, the US Open was a
for optimism. close match. I guess I should have
On that occasion Federer wast- won really. I was playing good
ed two match points before losing enough to win.
in five sets and Djokovic believes a “Novak is a quality player who
repeat victory is possible. plays really offensive, he takes it to
“Coming in here I was physical- the opponent. I enjoy playing
ly prepared, mentally motivated against him because of the shot-
to make some success,” he said. making we are able to create.”
“I have nothing to lose playing In the women’s draw top seed
Federer, who’s the title defender Caroline Wozniacki fought back
here. We all know everything to reach the final four in
about him. I have to believe in Melbourne for the first time. The
myself in order to win that Dane dropped the first set before
match.” beating French Open champion
Of that defeat in New York last Francesca Schiavone 3-6, 6-3, 6-3.
September Federer, who con- She said: “Francesca is such a
firmed his semi-final appearance fighter I’m so glad to have won.”
Results
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email sport@cityam.com
 30 Sport
Aguero is being coveted by both Chelsea
and Real Madrid
Chelsea fail in
Pic: ACTION IMAGES
double swoop
FOOTBALL
▲
CHELSEA have failed with a £52m joint
bid for Atletico Madrid duo Sergio
Aguero and Diego Godin, according to
the Spanish club.
Argentine striker Aguero, 22, has
been linked with a move to Stamford
Bridge before, and is regarded as one of
the most exciting talents in La Liga
Chelsea are known to be in the mar-
ket for a centre-half and could view
Uruguayan Godin as an alternative to
David Luiz whose club, Benfica, are
holding out for a fee of £25m.
Atletico’s majority shareholder
Miguel Angel Gil said: “In the last
week, we have received two offers. One
from Real Madrid for Aguero for £39m
and the other from Chelsea for Aguero
and Diego Godin for £52m.”
The champions last night refused to
comment on the claims, a spokesman
saying: “We never comment on trans-
fer speculation, no matter how wild it
is.”
Meanwhile, after Monday’s 4-0 win
at Bolton, captain John Terry believes
critics of his side should be fearful.
He said: “The message is you don’t
fear us at your own peril. We’ve never
been out of the title race.”
L
LIVE
IVE B
BARCLAYS
ARCL AYS PREMIER
PREMIER LEAGUE
LE AGUE F
FOOTBALL
OOTBALL
Wednesday 2nd February
(Kick-Off 8pm) at Craven Cottage SW6 6HH
Tickets on General Sale
Buy now at fulhamfc.com/tickets
or call 0843 208 1234 (option 1)
Wenger: Arsenal
are ready to deliver
ARSENAL 3
IPSWICH 0 don’t have to focus on Man United or
Arsenal win 3-1 on aggregate
▲
FOOTBALL
BY FRANK DALLERES
ARSENAL manager Arsene Wenger
has told his players that an end to
their six-year trophy drought is
theirs for the taking after they swept
Ipswich aside to reach the Carling
Cup final.
A superb strike from Nicklas
Bendtner, a Laurent Koscielny head-
er and a breakaway attack finished
by Cesc Fabregas – all within 18 sec-
ond-half minutes – helped the
Gunners overturn a first-leg deficit.
It sets up their first Wembley
final, where they will meet West
Ham or Birmingham on 27
February, since completing the dou-
ble by lifting the FA Cup in 1998,
Wenger’s first full season in charge.
The night might have been even
better for Arsenal’s silverware quest,
had Blackpool held onto their two-
goal lead over Manchester United
and deprived the Premier League
leaders of three precious points.
But Wenger said: “For us it is the
perfect night. I’m convinced our sea-
son depends on our performances,
our results and our consistency. We
anybody else.
“We are a team that has taken off
a while ago and is consistent now.
It’s important for us to go from
strength to strength. Are we capable?
We have a chance. Man United wil be
a very tough opponent, but we have
a good chance if we can keep going
from strength to strength, as I
believe we can.”
Fabregas, part of the team who
lost the 2007 final to Chelsea in
Cardiff, put in a lung-bursting run to
net his goal and Wenger added: “You
could see in Cesc’s attitude that he is
hungry for it. I still believe that Cesc
is a born winner and wants to win
every day on the training pitch. It
has a lot of meaning for him.”
Arsenal started with urgency and
fluency, but Ipswich doggedly frus-
trated them for the opening 45 min-
utes, only allowing Wenger’s men
two clear sniffs of goal. Robin van
Persie crashed a back-post header
onto the crossbar, and then, just
before the break, Fabregas poked
wide from Jack Wilshere’s clever
dinked through-ball.
Nerves, then, were growing as the
Sky sack Gray after 20 years
for unacceptable behaviour
▲
FOOTBALL
BY JAMES GOLDMAN
SKY PUNDIT Andy Gray was sacked
yesterday after further allegations of
sexist behaviour emerged.
The 55-year-old was stood down
from Monday night’s coverage of
Chelsea’s match at Bolton, following
comments made about female refer-
ee Sian Massey (below) before
Saturday’s match between Wolves
and Liverpool.
But after fresh evidence emerged
yesterday, Sky felt compelled to take
further action against the former
Everton and Aston Villa striker
who had fronted their football
coverage for 20 years.
Sky Sports managing
director Barney Francis
said: “Andy Gray’s con-
tract has been terminated
for unacceptable behav-
iour. After issuing a
warning yesterday, we
have no hesitation in
taking this action
after becoming
aware of new infor-
mation.”
The footage which
ultimately cost Gray his
lucrative position showed
the ex-Scotland interna-
CITYA.M. 26 JANUARY 2011
second- half began,
but two goals in
three minutes
soon settled
the home
f a n s .
Bendtner
opened the
scoring
and lev-
elled the
tie in
style in
the 61st,
killing a
long pass,
cutting
inside Mark Kennedy with
a Cruyff turn and curling
a low shot into the far
corner.
Koscielny then head-
ed the second from
Arsenal’s next attack
and completed the turn-
around, beating Marton
Fulop to a near-post cor-
ner.
And with 13 minutes
left Fabregas got the
goal his display
deserved, latching onto
a pass from Andrey Fabregas killed the
Arshavin and slotting tie with Arsenal’s
home left-footed. third goal
Pic: ACTION IMAGES
tional talking off-air with Sky
Sports’ reporter Andy Burton about
Massey.
The pair discussed Massey’s
appearance, with Burton referring
to her as “a bit of a looker” while
Gray asks: “What do women know
about the offside rule?”
Burton was “warned” about his
remarks and he will not be involved
in Sky’s coverage of tonight’s
Carling Cup tie at St Andrews. SACKED
A further clip, thought to have
been filmed in December, then sur-
faced on YouTube in which Gray
appears to ask Sky Sports News
reporter Charlotte Jackson to
tuck his microphone into his
trousers.
Gray’s long-time on screen
partner Richard Keys was
caught up in a fresh storm last
night after a clip of him mak- WARNED
ing lewd comments in off
an air chat with Jamie
Redknapp and other pun-
dits made its way onto
the video sharing site.
Massey, meanwhile,
was withdrawn from
her role as assistant
referee in last night’s
League Two match
between Crewe and
Bradford City.
WARNED
CITYA.M. 26 JANUARY 2011 Sport 31

West Ham could sue over

stadium ruling, say lawyers
▲

OLYMPICS
BY FRANK DALLERES
WEST HAM would have a strong argu-
ment for seeking a judicial review and
Berbatov strike could even claim damages if they lose
out to Tottenham in the battle for the

stretches United’s Olympic Stadium, legal experts have

lead to five points
MANCHESTER UNITED staged an
astonishing second-half recovery
to record a 3-2 win at Blackpool
and open up a five-point gap over
Arsenal at the top of the Premier
League.
The leaders looked set to sur-
render their unbeaten record
when they trailed at the break to
goals from former United
defender Craig Cathcart and DJ
Campbell.
United were still trailing by
two goals with 18 minutes left,
but Berbatov halved the deficit
and parity was restored when
substitute Javier Herandez, who
replaced an out of sorts Wayne
Rooney, struck two minutes
later.
And Bulgarian Berbatov com-
pleted a stunning rescue act by
pouncing for the winner in the
88th minute.
Elsewhere, Aston Villa moved
six points clear of the relegation
zone with a 2-1 win at Wigan.
told City A.M.
The Hammers could argue for a
review on the grounds that such a deci-
sion would be unfair, say lawyers, since
their plans for the £537m venue appear
to match more closely the promised
legacy for east London.
Alternatively they might look to
challenge the Premier League on its
rules, or seek damages from the organ-
isation if Tottenham’s move to
Stratford were to cause a reduction in
their income.
The warning from two leading
lawyers who specialise in sport comes
after the Olympic Park Legacy
Company (OPLC) postponed its decision
on the preferred bidder, which had
been expected on Friday.
Only once a decision has been rub-
ber-stamped by the Mayor and govern- West Ham and Brady (top right) are battling Spurs and Levy (bottom right) for the Olympic Stadium Pictures: ACTION IMAGES
ment could the losing bidder take legal
action – but at that point they would success, and I think West Ham would Harry Karaolou, a senior associate at thought they would not oppose either
have several options, including judicial have a stronger case because they are Lawrence Graham, said: “West Ham club. The third option would be to
review. saying they will keep the stadium as would have a better case in that their claim damages against the league, if
“If a decision goes against Spurs, I dual-purpose.” bid adheres to promises made in the they can show the decision has dented
don’t envisage they would look at a for- West Ham, whose vice-chairman is Olympic bid in 2005. It’s difficult to see sponsorship and corporate revenue.
mal legal challenge. But if it goes Karren Brady, intend to retain the run- what possible grounds Tottenham “Premier League rules aren’t review-
against West Ham they may well look ning track and continue to host athlet- would have, unless it could be argued able but that doesn’t preclude West
at judicial review,” said Andrew Nixon, ics at the stadium. Tottenham, led by that the local area benefited economi- Ham from bringing a claim against it
an associate at Thomas Eggar. chairman Daniel Levy, propose to cally [from their arrival].” for damages,” Nixon added. “If they
“Reviewing the decision of the OPLC knock down and rebuild it as a football- The losing bidder could also appeal make a decision that causes loss and
would be the easiest and quickest only venue, with athletics being relo- to the Premier League, who must ratify damage to West Ham then they could
route, with the most viable chance of cated to a revamped Crystal Palace. a move by any team, although it is potentially issue a claim.”

Legacy boss: ‘Noise’ won’t influence us

OPLC vow to ignore
hubbub over stadium as Spurs may leave N17
more Olympic venues even if they lose bid
are put up for grabs
TOTTENHAM chairman Daniel Levy
insists the club may leave White
Hart Lane even if they fail to win the
▲

OLYMPICS
BY FRANK DALLERES
LEGACY chiefs insist they will not be
pressured into any decisions over who
takes over the numerous Olympic ven-
ues after the London 2012 Games.
Debate has raged over whether West
Ham or Tottenham should move into
the stadium, with some of the most
powerful men in the sports world fan-
ning the flames.
Today bidders are invited for the
first time to lodge interest in two more
of the Olympic venues: the aquatics
centre and the multi-use arena.
And Malcom Ross, executive direc-
tor of operations and venues for the
Olympic Park Legacy Company, is
adamant they will not be bullied into
picking one bidder or another – no
matter how intense the media specula-
tion.
“Sometimes there is a lot of noise in
the Press about other issues and it may
be interesting, but we are very focused
on what our objectives are when we
evaluate and select the operator,” he
told City A.M.
Legacy chiefs today open the bidding for the aquatics centre (above left) and the multi-use arena (above right)
Interested parties have eight weeks
to tender offers for the 2,500-seater,
Zaha Hadid-designed aquatics centre,
which features two 50m pools and a
diving pool, and the multi-use venue,
which is set to stage handball at next
year’s Games and contains 7,500 seats.
Legacy promises and viability have
been the buzz-words in the debate over
who takes over the Olympic venues
after the Games, but Ross says there is
no single overriding criterion.
“It’s not one, it’s a number, they’re
balanced and they play a very important
part in the overall process. So it’s pretty
clean and clinical, very fair, objective
and transparent,” he added.
Lord Coe, the chairman of the
organising committee for the Games
and a key figure in winning the right
to host the event, and world athletics
chief Lamine Diack are among the
high-profile names to voice strong
opinions on who should run the ven-
ues post-2012.
Ross said: “There is a lot of comment
around but we don’t get distracted or
deflected by those. We stay very clearly
focused on the mission, which is to set
ourselves up for success by selecting
the most relevant and successful, sus-
tainable solution for each of our ven-
ues – and we’ll continue to do that.
“Everybody has the right to their
Pictures: GETTY
opinions and they’ll be printed. But do
those distract or influence us? No.”
Ross confirmed that operators of
any of the Olympic venues would be
allowed to sell lucrative naming rights,
as Arsenal have for their Emirates
Stadium and both West Ham and
Tottenham would look to do if they
moved into the Olympic Stadium.
However, he warned that major
modifications to either the aquatics
centre or the multi-use arena would
not be permitted, ruling out the possi-
bility they could be bulldozed and
rebuilt to a bidder’s requirements, as
Spurs have proposed to do to the
£537m stadium.
bid to move into the Olympic
Stadium. Spurs are vying for the
occupancy of the Newham site with
West Ham. Levy said: “The situation
we are in at White Hart Lane is that
the project is not viable so we would
have look at other locations again.”
Hammers boosted
by O’Neil signing
WEST HAM have bolstered their
squad with the addition of
Middlesbrough midfielder Gary
O’Neil. The 27-year-old could go
straight into the squad for tonight’s
Carling Cup trip to Birmingham and
looks set to be joined by Hoffenheim
striker Demba Ba, who said last
night he had agreed terms for a loan
until the end of the season.
 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
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Bank of England steps in with
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Chance of Bank of England
using more quantitative
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S&P revises UK to ‘stable’
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Predicted UK corporate Private sector layoffs add to estimated
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