INVESTMENT banks face a fight for

survival as returns and revenues

shrink, according to two reports
released today.
A study by McKinsey & Co claims
that investment banks are heading for
a day of reckoning that will see
many firms fall by the wayside.
And figures compiled by data
provider Dealogic show that European
revenues from primary advisory busi-
ness have slumped to a 14-year low.
Data for primary business deals
announced in August 2011 such as
advice on mergers and acquisitions,
floats and debt sales show revenues
fell to just $546m (334.8m) in Europe.
The last time they were lower was in
August 1997, when they hit $474m,
whereas last August banks netted
$935m.
The dire numbers coincide with
McKinseys assessment that, without
drastic action, investment banks
returns on equity will drop to just
seven per cent from a current average
of 20 per cent.
That is below McKinseys nine to 11
per cent estimate of the cost of equity,
making most banks non-viable as busi-
nesses if they fail to take action.
New capital requirements from
Basel III will be responsible for three
quarters of the hit to returns,
McKinsey claims. Worse still, it did not
model the additional effect from uni-
lateral measures such as the UKs bank
levy or proposals by the Independent
Commission on Banking (ICB).
With mitigating actions, such as
shutting down chunks of their busi-
ness, altering pay schemes and hiking
prices, McKinsey says banks should be
able to push returns up to 11-12 per
cent and, with succesful overhauls of
business models, to 12-14 per cent.
But the study warns that the decline
in trading volumes that has seen banks
lay off thousands of workers will be
exacerbated by regulation, especially in
structured credit and rates.
The knock-on effect will see the cost
of financial services and credit rise for
businesses, as banks pass on some of
the costs of regulation.
McKinsey adds that banks fixed
income, commodity and currency
(FICC) divisions and structured credit
will be worst hit.
Some products like collateralised
debt obligations (CDOs) may even
cease to exist while others will see a
six-fold increase in capital require-
ments, potentially making them
unprofitable.
The charge for counterparty risk
could rise by a factor of 2.5, McKinsey
suggests, for trading unusual over-the-
counter (OTC) derivatives that cannot
be cleared by central clearing houses.
MORE ON UK BANKS: PAGE 5
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Issue 1,457 Wednesday 31 August 2011
Certified Distribution
04/07/2011 till 31/07/2011 is 93,093
BY JULIET SAMUEL
BANKING

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PAGE 15
BUMPY RIDE | MCKINSEY & CO SAYS DEALMAKERS ARE SET FOR A DAY OF RECKONING
BP out in the cold as Exxon inks deal with Rosneft
EXXONMOBIL has won a highly covet-
ed contract with Russias Rosneft to
develop offshore oil fields in the
Arctic.
The $3.2bn (1.96bn) deal comes as
a major blow for British rival BP, who
just seven months ago announced a
groundbreaking strategic global
alliance with Russias state-owned oil
company that was later abandoned
after objections from shareholders in
BPs Russian venture, TNK-BP.
The agreement announced yester-
day gives the biggest US oil company
access to explore the same three
licence blocks in the Kara Sea that
were central to BPs historic agree-
ment with Rosneft announced in
January.
After a surprise signing by Prime
Minister Vladimir Putin yesterday at
the Black Sea resort of Sochi,
ExxonMobil has agreed to hand
Rosneft unspecified assets, including
some that the company owns in the
deepwater zones of the Gulf of Mexico
and onshore in Texas.
This compares to the BP deal, which
called for a $16bn share swap in which
BP would exchange a five per cent
stake for 9.4 per cent in Rosneft.
The deal marks the most significant
US-Russian corporate deal since
President Barack Obama began a push
to improve ties, which analysts say was
aimed at reducing the political risk for
businesses working in Russia.
BY KASMIRA JEFFORD
ENERGY

INVESTMENT BANKS
FACE BLEAK FUTURE
ANALYSIS l Barclays PLC
p
Jul Aug
220
250
240
180
200
160
165.40
30 Aug
June
ANALYSIS l JPMorgan & Chase
$
July June Aug
37.06
30 Aug
42
40
38
36
ANALYSIS l Credit Suisse Group AG
CHF
Jul Aug
30.00
35.00
32.50
25.00
27.50
22.50
22.76
30 Aug
June
ANALYSIS l Goldman Sachs Group Inc
$
Jul Aug
250
300
150
200
100
115.18
30 Aug
June
BARCLAYS;
BOB DIAMOND
JP MORGAN CHASE;
JAMIE DIMON
CREDIT SUISSE;
BRADY DOUGAN
GOLDMAN SACHS;
LLOYD BLANKFEIN
News
2 CITYA.M. 31 AUGUST 2011
Deeper gloom
on high street
CONSUMER confidence has sunk fur-
ther on both sides on the pond,
according to fresh data.
A widely-regarded measure of senti-
ment on the UK high street was con-
firmed this morning at 13 points
below its level at the same time last
year.
The GfK NOP consumer confidence
index -- which slipped to a score of -31
in August -- also revealed a gloomier
outlook for the UKs general econom-
ic situation for the next 12 months.
The sub-index measuring economic
expectations for the next year also
dipped to -31, down from -27 in July.
The continuing loss of consumer
confidence is a major worry for the
government, said GfK NOPs Nick
Moon.
The news mirrored data released in
the US yesterday, where a gauge of
consumer sentiment dropped to its
lowest level since April 2009.
The Conference Boards index
slumped to 44.5, from a downwardly
revised 59.2 in July.
Economists had not expected such a
severe drop.
This was its largest fall since the 23-
point decline in October 2008, when
the collapse of Lehman Brothers sent
shockwaves around the world,
responded Chris Williamson, chief
economist at Markit.
BY JULIAN HARRIS
ECONOMY

DISPUTE ERUPTS OVER CONTROL OF

LIBYAS $65BN SOVEREIGN FUNG
A dispute has erupted over control of
Libyas $65bn (40bn) sovereign
wealth fund, as the national transi-
tional council attempts to maintain
stability in the nation. Several NTC
members have contested the authori-
ty of Mahmoud Badi, who is probing
corruption at the Libyan Investment
Authority.
HONG KONG'S CHOI FAMILY CALLS OFF
RAB DEAL
Hong Kongs billionaire Choi family
has backed out of plans to acquire
funds from RAB Capital, the belea-
guered London-based hedge fund
manager. The move comes amid fur-
ther steep losses for RABs investment
vehicles including those that the
Sunwah conglomerate, which the
family owns, had intended to pur-
chase and make the foundation of a
new large-scale alternative asset man-
agement business in London.
CHESAPEAKE IN TALKS OVER OHIO
SHALE FIELD
Chesapeake, the second-biggest gas
producer in the US, is in talks with
oil companies and private equity
groups to find a partner to help devel-
op its new Utica shale field in Ohio.
Aubrey McClendon, chief exec, said
he hoped to pick a joint venture part-
ner to buy 25 per cent of the project
by the end of September or October to
begin developing the firms 1.25m
acres field by the end of the year.
JINHUI LATEST TO WARN COSCO ON
CONTRACTS
Jinhui Shipping and Transportation,
one of Asias biggest listed dry bulk
shipping companies, has become the
latest company to warn Chinas Cosco
of dire consequences if it reneges on
contracts, after threatening corre-
spondence between the two over
charter rates.
COUPON-CRAZY FAMILIES BEING SOLD
SHORT
Recession-hit Britons are latching on
to online discount vouchers despite
mounting evidence that consumers
are being misled. In less than six
months, the advertising watchdog
has banned 60 voucher adverts by the
burgeoning industry of websites
offering alluring discounts on goods
and services stretching from meals
out to fish-based pedicures.
WOMEN CLIMB THE FIRST RUNG OF
THE LADDER TOWARDS EQUAL PAY
Female executives are earning more
money than their male counterparts
for the first time but only on the
lowest rung of the corporate ladder.
Stats compiled by the CMI show that
women at the junior executive level
earned an average of 21,969 last
year, about 600 more than the aver-
age man in a similar position.
MAGNATE BYRNE EYES OMEGA
An investment group led by the son of
US insurance magnate Jack Byrne has
emerged as the frontrunner to buy
Omega Insurance Holdings, the
Lloyds of London underwriter. Mark
Byrne, who is close to legendary
investor Warren Buffett, is in pole
position to buy Omega for around
200m following an auction of the
business that started earlier this year.
BORROWERS TOLD TO CUT BACK
Around 30,000 low-income homeown-
ers will be told to cut spending on Sky
TV, trips to the pub and mobile phone
bills or face losing their houses when
interest rates rise. The warning will
come from the state-owned bank
charged with recovering the govern-
ments 48nn investment in Bradford
& Bingley and Northern Rock, the
mortgage lenders which were nation-
alised during the credit crisis.
POLICE REVIEW OLYMPICS SECURITY
UK authorities are reviewing security
plans for next summers Olympic
Games, including staffing levels and
intelligence gathering, in the wake of
recent riots. Metropolitan Police
Assistant Commissioner Chris Allison
said in an interview that authorities
are studying the recent riots that
rocked London and other U.K. cities
to see whether they should deploy
additional police resources.
NORWAY'S OIL CHIEF TO VISIT CHINA
Norway plans to send its oil minister
to China, a sign relations could be
thawing after last years Nobel Peace
Prize to jailed Chinese dissident Liu
Xiaobo threw talks on a free-trade
accord into a deep freeze. Norwegian
energy minister Ola Borten Moes
visit to Beijing in September will be
the be the first by a Norwegian minis-
ter to China since October.
WHAT THE OTHER PAPERS SAY THIS MORNING
House price slump is already upon us
HOUSE prices remain overvalued in
Britain, locking out many aspiring
buyers. Of that there is no doubt. But
it is also the case that average prices
have fallen far more than is usually
understood; the single biggest reason
why so many younger people cannot
enter the market is because they have
to put down much larger deposits and
cannot borrow as much relative to
their incomes. Given the prospect of
further house price declines, these
frustrated wannabe buyers may actu-
ally end up thanking their lucky stars.
The UK housing market peaked four
years ago, with the average property
going for a record 199,612 in August
2007, before tumbling all the way
down to 154,663 by April 2009,
according to the Halifax. The average
price is now 163,981, and has been
fluctuating around that level for the
past 11 months. In cash terms, the
average UK house is back to where it
was in June 2005 the gains of the last
six years have been entirely wiped
away. In real terms, we are probably
back to early 2003 levels; this further
demolishes the case for a wealth tax.
The extent of the slump is rarely dis-
cussed the continuing rise of prime
central London property prices,
fuelled by overseas demand and a
ridiculous scarcity of family homes,
has obscured the overall picture.
Compared with the all-time peak of
four years ago, in cash terms, the aver-
age house price is down by 17.9 per
cent, a devastating reduction. During
that time, the retail price index has
risen by a crippling 13.5 per cent so
in real terms, the price of the average
home in the UK has collapsed by
around a third. Prices are down in
London too, on average, which busts
another myth: they peaked at around
319,000 in the third quarter of 2007
and are now at 262,000.
Of course, the real loss to homeown-
ers is even greater: billions are poured
into the housing stock every year to
refurbish, extend or modernise prop-
erties. Transactions are expensive;
stamp duty raises a fortune and is a
weird and unfair tax. Against that, the
real value of mortgages is being erod-
ed; homeowners with the largest
mortgages are losing the least from
the crash. Mortgage debt is a partial
hedge against inflation. Interest bills
are also down, often substantially.
Further house price falls are on the
way, at least in real terms. The average
house peaked at a preposterous 5.82
times full-time male earnings in April
2007. It is now at 4.45 times, still too
high; the ratio wont fall all the way
back to the 3.1 seen in 2000, however,
because the population is growing so
fast and because restrictive planning
rules are still scandalously constrain-
ing the supply of new homes. But the
market will take another hit when the
Bank of England eventually starts to
increase rates, which will shock those
who have become used to permanent-
ly rock-bottom rates.
Given that prices are bound to drop
further, lenders will continue to insist
on large deposits to protect them-
selves in case borrowers default and
of course it is these down-payments,
combined with smaller loan to value
ratios, which have put home-owner-
ship out of reach for millions of peo-
ple who could actually afford
mortgage payments at current rates.
But while having to pay exorbitant
rents isnt fun, the younger genera-
tion could yet have the last laugh: on
current trends, they could end up pay-
ing significantly less for their first
home when they finally manage to
cobble a deposit together.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
DEEP divisions have appeared among
senior Federal Reserve officials, the
minutes to the Feds August meeting
exposed last night.
The minutes revealed a few mem-
bers pushing for a more substantial
loosening of policy -- widely assumed
to be a third period of quantitative
easing known as QE3.
Yet the hawkish side of the com-
mittee are digging their claws in.
Richard Fisher -- one of the three dis-
senters who refused to endorse the
Feds pledge to keep interest rates at
exceptionally low levels at leas
through mid-2013 -- described
Americas economic problems as
chiefly non-monetary.
Nonetheless, contrary comments
from Fed dove Charles Evans yester-
day, in which he urged the Fed to sig-
nal more loosening, helped send gold
prices upwards. The precious metal
rose over two per cent during the day,
to reach $1,838 per ounce.
BY JULIAN HARRIS
US ECONOMY

Split among Fed officials

Chairman Ben Bernanke is leading an increasingly divided Fed Picture: REUTERS
NEWS | IN BRIEF
IL&P buys Northern Rock assets
Irish Life & Permanent's banking unit
has agreed a deal to acquire the 650m
(575.8m) Irish deposit book of UK
lender Northern Rock as it seeks to
improve its stretched funding position
and ensure a standalone future for the
bank. The bancassurer, which has been
effectively nationalised in the face of a
4bn capital hole, did not detail the cost
of the acquisition yesterday. The Irish
assets accounted for less than five per
cent of Northern Rocks total deposits.
Lego builds on sales growth
Sales of Lego increased by 25 per cent
in the first half of the year, driven by
new products and classic ranges such as
Star Wars. The Danish firm said net
sales were DKK 7.355bn (873m) com-
pared with DKK 5.863bn in the same
period last year. Operating profit was
DKK 2.03bn compared with DKK 1.47bn
for the first half of 2010. Lego said sales
of its new Ninjago line had beaten
expectations and its City and Star Wars
toys were still top-sellers. Consumer
sales of Lego achieved double-digit
growth in nearly all markets, the pri-
vately-owned firm said.
EDITORS LETTER
ALLISTER HEATH
Editorial Statement
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editorial content of publications under the Editors
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Augusts index, a level
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News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
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Pictures Alice Hepple
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Head of Distribution Nick Owen
-31
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BANK of America Merrill Lynch saw its
shares fall again yesterday over a back-
lash against its plan to settle $8.5bn
(5.2bn) of mortgage disputes.
The Federal Deposit Insurance
Corporation, which manages failed US
banks, and dozens of other investors
objected to BofAs plan to resolve huge
claims from investors sold subprime
bonds by mortgage lender
Countrywide Financial, which BofA
took over in 2008.
FDIC said it did not have enough
information to evaluate whether the
settlement was reasonable, sticking a
spanner in BofAs plans to settle a sub-
prime mortgage dispute brought by 22
major investors including the New
York Federal Reserve and BlackRock.
We believe that the trustee acted
reasonably in entering into the settle-
ment, and that there are compelling
reasons why the agreement should
receive judicial approval, BofA
spokesman Lawrence Grayson said.
The news revived fears over BofAs
ability to pay bigger sub-prime claims
and though it confirmed yesterday it
had sold half its shares in China
Construction Bank for $11.6bn, its
shares closed down three per cent.
BofA also came under fire over its
$5bn funding deal, signed five days
ago with billionaire investor Warren
Buffett, as critics warned that it was a
good deal for Buffett but few others.
And BofA was hit by a $1.75bn law-
suit from US bank Bancorp for failed
mortgage-backed securities it was sold
before the financial crisis.
BofA shares
slide on fresh
lawsuit fears
CREDITORS of failed US investment
bank Lehman Brothers were granted
approval to vote on its $65bn (40bn)
payback plan, clearing a major hurdle
to ending the biggest bankruptcy in
US history.
Bankruptcy judge James Peck over-
ruled a handful of objections from
corporate creditors and agreed to
enter an order approving the outline
of the plan and sending it to creditors
for a vote on 4 November. Objections
from investment funds Mason Capital
and Centerbridge, among others,
were dismissed.
Peck told a packed courtroom the
plans disclosures were abundant
and adequate as to the issues in this
too-big-to-fail enterprise.
Lehmans estate has spent years in
talks with angry creditors but ulti-
mately managed to bring powerful
critics, including distressed investors
and former trading partners, on side
before the hearing.
Among its supporters were two
creditor groups, including bondhold-
ers led by hedge fund Paulson & Co
and derivatives creditors such as
Goldman Sachs and Morgan Stanley,
which hold a total $100bn in claims.
If creditors vote in favour, the plan
will come back to court for a final
approval hearing on 6 December.
Lehmans $65bn
payout plan to
go to final vote
BY ALISON LOCK
BANKING

ENFORCEMENT

News
3 CITYA.M. 31 AUGUST 2011
ANALYSIS l Bank of America Corp
$
9.00
8.50
8.00
7.50
7.00
6.50
24Aug 25Aug 26Aug 29Aug 30Aug
8.12
30 Aug
ACTIVIST investor Carl Icahn picked
his battles yesterday, admitting defeat
in his attempt to win control of stu-
dio Lionsgate but renewing his efforts
to overhaul bleachmaker Clorox.
Lionsgate said yesterday that the
billionaire and his son Brett Icahn
had agreed to sell up to 44,161,971
shares of its common stock, repre-
senting most of the studio shares
owned by the family. The deal will see
Icahn and the studio, who have
fought each other repeatedly in the
courts, agree to dismiss all outstand-
ing legal action between them.
Yesterday Icahn also said his nomi-
nees for the Clorox board would try to
sell the firm if elected, with him
backstopping an auction with a
$10.26bn bid. Icahn has launched a
proxy fight for Clorox after the board
rejected two of his buyout offers, the
last one worth $10.52bn.
Icahn lets go of Lionsgate
but battles on for Clorox
Billionaire Carl Icahn has admitted defeat in the battle for Lionsgate Picture: Reuters
BY PETER EDWARDS
M&A

ITALY finally returned to debt markets

yesterday with a sale that saw weak
demand despite European Central
Bank (ECB) efforts to keep yields down.
Rome sold 7.75bn (6.86bn) of long-
term debt, but the bid-to-cover ratio on
a new ten-year bond slumped to 1.27,
below the 1.4 average for this year.
There was speculation that the ECB
intervened in the secondary market to
prop up prices during the sale.
Italy paid 5.22 per cent to sell its ten-
year bonds, down from 5.77 per cent at
the last similar auction in July before
the ECB restarted its bond-buying pro-
gramme.
Figures published yesterday showed
the Bank has mopped up a staggering
43bns worth bonds in less than a fort-
night, bringing the total value of its
interventions so far to 115.5bn.
Although the Italian and Spanish
bonds the ECB is buying are less risky
than the Greek, Portuguese and Irish
debt it has bought previously, the sheer
size of Romes bond market means
that its interventions must be far larger
to have an impact.
As a result, Italian and Spanish ten-
year yields have fallen from over the
danger threshold of six per cent clos-
er to five per cent, but it is not clear
how long the Bank can sustain the pur-
chases.
Meanwhile, Eurozone leaders
remain locked in dispute over whether
the regions bailout fund should be
allowed to inject new capital into fail-
ing banks.
We y from Gatwick, Luton and Stansted. We y to Majorca (Palma). Price correct as at 17 August 2011.
For travel between 2 September and 17 October 2011. Variable charges for hold baggage apply
and some payment methods attract a handling fee. See website for details.
Theres still time
to nip away
ECB fails to lift demand
for Italian debt auction
BY JULIET SAMUEL
EUROZONE

News
4 CITYA.M. 31 AUGUST 2011
IN NEED OF A STIMULUS
ITALYS central bank warned yesterday that government efforts to cut debt were at risk
from weak growth. Ignazio Visco, deputy director-general of the central bank, said
growth was likely to be under one per cent in 2011 and warned that market tensions
remained high. The problems of economic growth are perceived as a strong limit to the
ability to rebalance the finances of our country, Visco said. Picture: REUTERS
News
5 CITYA.M. 31 AUGUST 2011
BRITISH banks share prices rallied
dramatically yesterday as London
played catch up with world markets
after Mondays holiday.
Analysts said that investors were
pricing in the possibility of further
quantitative easing due to the
Federal Reserves September meet-
ing being extended from one to two
days.
But UK lenders were also helped
by a bullish note from Deutsche
Banks Jason Napier. Calling the sell-
off in British banks overdone, he
upgraded RBS and rated
Barclays a top pick.
RBS gained most, rising
eight per cent, while Lloyds
gained 7.8 per cent,
Barclays 6.7 per cent
and HSBC 4.2 per cent.
In total the banks
value swelled some 12.5bn.
Barclays also took advantage of a
surge in the bank covered bond
market to issue 2bn of the instru-
ments.
However, there are growing con-
cerns in the City that an over-zeal-
ous approach from the
I n d e p e n d e n t
Commission on
Banking (ICB) in
its final report
could erode
UK banks val-
ues.
In recent
days both the British Bankers
Association (BBA) and the CBI have
lashed out at the ICBs plans for a
ringfence around banks retail oper-
ations.
And City analysts are increasingly
concerned about their inability to
model the impact of any ringfence
if the ICB, led by John Vickers (pic-
tured), does not provide a detailed
blueprint of precisely how it will
work in its final report on 12
September.
Investecs Gareth Hunt told City
A.M. that concern over the ICB is par-
ticularly acute because it will be a
unilateral British measure: At some
point in time we [in the UK] need to
stop convincing ourselves that were
brilliant at regulation and just do
what everyone else is doing, he
said. Investec has modelled a
400m net income hit for RBS
from a ringfence, but says that
the figure is uncertain.
Banks rally but City
frets over ringfence
BY JULIET SAMUEL
BANKING

NEWS | IN BRIEF
Greek bank loses on bond move
National Bank of Greece, the countrys
largest lender, made a big first-half loss
on government debt writedowns and said
it would not rush into big strategic
moves. NBG lost 1.31bn from its planned
participation in a voluntary swap of
Greek government bonds, aimed at reliev-
ing the countrys debt burden. Excluding
this provision, net first-half earnings
would have reached 29m, down 80 per
cent year-on-year.
BIS warning over UKs debt levels
High debt can be a major drag on growth,
the Bank of International Settlements
(BIS) has warned, drawing attention to
the UKs perilous levels of borrowing.
Debt-to-GDP ratios will explode in all but
a few countries in the next 30 years, it
states. Debt quickly rises to more than
100 per cent of GDP, with negative con-
sequences for growth. In a number of
countries Japan, the UK and the US
the projections rise much further.
Barnes & Noble bullish on e-books
US bookseller Barnes & Noble yesterday
forecast sales of its Nook e-reader and e-
books would more than double this fiscal
year to $1.8bn and said book sales would
get a lift from the demise of rival Borders,
sending its shares up about 15 per cent.
The group reported a loss of $56.6m for
the quarter, compared with a loss of
$62.5m a year earlier.
BANKS have paid out a total of more
than 215m in compensation so far
this year to clients that were mis-sold
payment protection insurance (PPI),
figures published by City regulator the
FSA revealed yesterday.
The data released showed that 16
banks representing 92 per cent of all
PPI claims made had so far spent
215m on claims, with almost half of
the damages paid since the High Court
rejected an appeal against the new
rules in April.
Payouts increased significantly after
the appeal ruling compared to earlier
in the year, with 37m and 65m
spent in May and June respectively.
Banks including Lloyds, RBS and
Barclays have made hefty provisions to
account for one-off compensation
charges, with Lloyds putting aside a
total of 3.2bn to handle claims.
The regulator also said yesterday it
was planning to introduce a new
health alert system to warn about
risky financial products in a bid to halt
the string of costly mis-selling scandals
in recent years.
Alerts to firms as well as to con-
sumers will be public, and financial
lawyers are already warning clients
the regulator is keen to make an exam-
ple of a company.
I expect us to start issuing warn-
ings soon, said Margaret Cole, the
FSAs acting managing director of busi-
ness conduct.
Weve been asking for minutes of
product approval meetings and there
are examples where we have told a
firm to go back and add features to a
product to bring about greater com-
fort on our part, Cole said.
PPI fine payments
hit 215m in first
six months of 2011
BY ELIZABETH FOURNIER
REGULATION

Osborne must try to sit on the fence

A
S GROWTH slows and the
chorus of criticism swells,
chancellor George Osborne
might wish he had kept his
cards a little closer to his chest at
Mansion House in June.
His endorsement of the
Independent Commission on
Bankings (ICB) proposal for a
ringfence around banks retail
operations before the Treasury
could even say anything about how
it would work certainly provoked
some furrowed brows in the City.
And now the chancellor faces the
prospect of implementing whatev-
er it is that John Vickers ICB pro-
duces amid the growing threat of a
double dip recession and a
European financial crisis.
Supporters of the mysterious
ringfence proposal suggest that it
will bolster financial stability and
therefore contribute to growth in
the long run although they can-
not say exactly how.
But there is little sign that a
ringfence would have mitigated
the 2008 bank collapses and there
is no evidence that it would halt
European contagion.
In fact, in conjunction with the
FSAs liquidity scheme, which
gives retail deposits a low weight-
ing, it could instead concentrate
risk by forcing retail banks to buy
more government bonds rather
than share funding with their
investment banks.
And it will cost small businesses
(SMEs) too: Santander UK has
warned that a ringfence could
force it to raise the cost of SME
loans to by one per cent, regardless
of how competitors act.
The question is how Osborne
will extract himself from this mess.
BOTTOMLINE
Analysis by Juliet Samuel
Will the Vickers reforms help or
hinder the economic recovery?
In association with
PoliticsHome.com
Apply to join today at
www.cityam.com/panel
Back in April, we asked members of
our readers panel about the impact
of the interim Vickers report on the
banking sector. With the final report
due in a fortnight, we want to know if
opinions have changed following the
recent market turmoil.
Will plans for a ringfence, which
requires banks to run their retail and
investment banking operations sepa-
rately, affect lending to consumers
and businesses or the economic
recovery? Will banks consider moving
abroad to avoid any new rules or are
such noises just empty threats? And
do you think a ring-fence will prevent
a repeat of the 2008 financial crisis?
Meanwhile, do you think the chancel-
lor, George Osborne, will find a way of
delaying any reforms, and would he
be right to do so?
To answer these questions and oth-
ers like them apply to join the panel
at www.cityam.com/panel today.
PoliticsHome.com PoliticsHome.com
In partnership
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News
6 CITYA.M. 31 AUGUST 2011
HURRICANE Irene sparked a relief
rally in UK insurance stocks yesterday
after low damage estimates from the
storm left insurers less likely to suffer
more claims to add to their heavy
losses already this year.
Lloyds insurers saw their shares
fall last week as US authorities evacu-
ated New York and warned of huge
damage as hurricane Irene
approached the east coast.
Irene killed more than 40 people
after she swept up the US east coast
from North Carolina on Saturday and
Sunday, leaving a million homes
without power and swathes of
Vermont and New York states suffer-
ing serious flooding.
But the storm caused far less dam-
age than feared, causing a rebound in
stocks such as Lancashire, Amlin and
Catlin, which have large US property
accounts, and others such as Hiscox
that reinsure US insurers.
Catlin shares jumped 11 per cent in
trading after catastrophe modelling
firm AIR said insured losses in the US
and the Caribbean would come to no
more than $7.1bn (4.3bn).
Lancashire closed up 6.7 per cent
while Hiscox finished 2.8 per cent
higher, outperforming the FTSE.
This is just a small earnings event
for them, said Jefferies analyst James
Shuck, saying most losses would fall
on primary US insurers and the US
national flood programme rather
than the London market.
But Sebastian Kafetz, relationship
director in the insurance team at
Lloyds Bank Corporate Markets, said
insurance stocks were also rising on
expectations of US premium rates
increasing after years of declines.
Loss estimates at the moment
range from $5-12bn and our view is
that it will be at the higher end of
that, Kafetz told City A.M. This has
been a year of a significant number of
catastrophes and the insured global
cost to date is much larger than, for
instance, hurricane Katrina.
The other side to that is that gen-
erally it will lead to significant insur-
ance rate rises. Going forwards, the
market should be a lot more prof-
itable.
Shore Capital analyst Eamonn
Flanagan said US and Bermuda-based
insurers were also benefiting from
investor relief.
The bulk of the damage is likely to
emanate from flooding, which is not
a standard feature on US homebuyers
contracts. Hence, the losses are likely
to be from commercial and business
interruption cover, he said.
Insurers see
share bounce
after Irene
BY ALISON LOCK
INSURANCE

MOST private equity houses expect to

be able to raise the cash needed for
new investments, according to new
research.
The study, produced by Grant
Thornton, also found that the over-
whelming majority of private equity
houses do not expect to see a fall in
the number of buyouts over the com-
ing months.
Half expect the number of invest-
ments to increase in the coming year
while three per cent expect to see a
decrease. More than three-quarters
also said they did not expect their
ability to do deals to be he hit by prob-
lems in raising new equity funds.
Separate research, from SEI and
Greenwich Associates, found that
more institutional investors are turn-
ing to private equity.
Private equity buyouts will not be
stopped by lack of access to cash
PRIVATE EQUITY

Hurricane Irene left swathes of Vermont flooded Picture: REUTERS

People will always buy houses
rather than rent because its a per-
sonal achievement: the only prob-
lem is the affordability.
Renting is cheaper
because of the
deposit when buying,
causing a decline in
house
owner-
ship.
MARCUS KUM | INSTITUTE OF
CHARTERED SHIPBROKERS
CITY VIEWS: DO YOU THINK HOME OWNERSHIP IS DECLINING? Interviews by Phoebe Torrance
Yes, but I'm not sure how long it
will last. There are a lot of
mortgage deals to help people but
the deposits when you
buy are a problem.
The general trend is
people moving away
from the city to be
able to buy more
affordable
homes.
CHRIS COPPING |
UNITED INSURANCE BROKERS
Ownership is definitely declining
because of the market we are in.
For first-time buyers its so expen-
sive. More people rent
as it is affordable, but
I think it will always
be desirable to buy a
home when you have
a family or if
you can
afford it.
ALEX TUNSTALL |
KENNEDYPEARCE CONSULTING
* These views are those of the individuals above and not necessarily those of their company.
BOVIS HOMES more than doubled
its profits in the first half of the
year after cutting building costs
and embarking on an aggressive
land buying spree, despite gloomy
market conditions.
The FTSE 250 company said pre-
tax profits jump to 8.1m in the six
months to 30 June from 3.5m in
the same period last year, with rev-
enues up by 15.6 per cent to
133.6m.
This increase has been delivered
through improved profit margins
generated from reduced construc-
tion costs on existing sites and the
initial contribution from new high-
er margin sites acquired since the
housing market downturn, David
Ritchie, Bovis chief executive, said.
The British house builder also
went on a spending spree, adding
1,571 plots on nine new sites most-
ly in the south of England and has
agreed terms to acquire a further
2,500 plots.
Ritchie said the company expects
an 11 per cent growth in the num-
ber of sites in 2011 compared with
the previous year, followed by a 16
per cent growth forecast 2012.
We are not looking for a market
recovery to drive our success: we
are going to do that ourselves,
Ritchie added.
Bovis confidence in its growth
outlook encouraged the group to
declare an interim dividend of 1.5
pence, which was suspended fol-
lowing the housing slump in 2008.
Cost cutting
helps boost
Bovis profits
BY KASMIRA JEFFORD
CONSTRUCTION

LENDERS approved the highest num-

ber of mortgages since May 2010 last
month, but growth in consumer bor-
rowing slowed more severely than
expected, according to Bank of
England figures.
The Bank said 49,239 mortgages
were approved in July, rising from an
upwardly revised 48,500 in June.
Gross lending secured on dwellings
stood at 11.3bn last month, in line
with the six-month average.
Its difficult to get too excited
about the pickup in mortgage
approvals. Although this might have
been a 14-month high, its still very
low in a historical context and the
market remains essentially stagnant.
Similarly, lending levels remain just a
fraction of long-term averages, said
Andrew Goodwin, senior economic
adviser to the Ernst & Young Item
Club.
And consumer credit rose by just
200m last month, compared with a
400m gain in June, and lending
through credit cards rose by 300m.
Although the data contain some
signs that credit supply to households
is improving, heightened uncertainty
about the economic outlook means
lenders are likely to remain cautious,
said Simon Hayes at Barclays Capital.
Mortgage approvals pick up
but consumer loans lose pace
BY MARION DAKERS
ECONOMICS

While mortgage approvals rose in July, the figures are well below long-term averages
News
7 CITYA.M. 31 AUGUST 2011
IS BOVIS STILL ON TRACK? by Kasmira Jefford

CHRIS MILLINGTON | NUMIS

Bovis' H1 update is in line with expectations...We believe that Bovis is a
quality housebuilder and efforts to rebuild revenue and margins should ensure that
profit continues to grow strongly. However, we still hold concerns over the low rate of
asset turn and believe that this will hold back the return on capital employed.

SIMON BROWN | NORTHLAND CAPITAL

Despite the warnings of a flat housing market, we believe the house-
builders can achieve profit growth thanks to some specific attributes and self-
help....Bovis has all the necessary attributes and we would expect solid progress to be
reported from its growing number of newer sites.

MARK HUGHES | PANMURE GORDON

These results are strong and ahead of our expectations, particularly
with regards to comments on build cost reductions and overall operating margin...
With this positive statement behind them, and a number of new site openings
supporting volumes, we believe the shares now offer good value...

ANALYSIS l Bovis Homes Group PLC

Jul Jun Aug

420
440
380
400
360
340
320
369.50
30 Aug
GROWTH in the Far East helped stock-
broker Daniel Stewart swing back
into the black after years of turmoil.
The AIM-listed firm made a 1m
pre-tax profit, compared to a 2.91m
loss the previous year, and said its
wealth management arm is growing
quickly. It warned, however, that mar-
ket conditions had dipped since the
year end, following a pick-up in the
third and fourth quarters.
Revenue for the year to 31 March
hit 8.5m, up from 3.6m, as it won
more advisory work overseas. Peter
Shea, chairman and chief executive,
said the firm had done well in chal-
lenging market conditions.
The key to our progress is that we
have been proactive and innovative in
expanding our product and service
range for corporate and private
clients alike, he added.
It advised seven Kuala Lumpur-
based firms on London listings and
its wealth management arm is now
responsible for more than 125m of
funds, including more than 50m in
Dubai after it developed links with
local brokers.
The firm, which suffered during
the financial crisis as liquidity on the
junior stock market all but dried up,
strengthened its balance sheet in
2010 with a 1.5m cash injection
from investment group Brainspark
and a share placing with staff.
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With over 400 ights a week between London and Ireland, you can be sure
of a time that suits. Just one of the many ways Aer Lingus takes care of you.
Daniel Stewart warning
despite return to profit
BY PETER EDWARDS
BANKING

News
8 CITYA.M. 31 AUGUST 2011
Looking ahead: Peter Shea expects Daniel Stewart to grow despite market turbulence
NEWS | IN BRIEF
Readymix posts losses of 18m
Building materials group Readymix yester-
day reported a pre-tax loss of 18m in the
first half of this year as demand for its
products fell further. The group's revenues
fell by 24 per cent and an operating loss of
6.2m. Readymix said its priority was fur-
ther cost cuts and that the company
expects very demanding trading conditions
to continue into next year due to weakness
in the housing and commercial sectors and
the uncertain timing of any new infrastruc-
ture projects.
Infrastructure fund boosts NAV
Listed infrastructure fund International
Public Partnerships has increased its half-
year dividend by 2.6 per cent, and posted a
0.4 per cent rise in net asset value. For the
six months to 30 June the net asset value
was 550m compared with 541.9m for
the same period last year.
rate, the Sun King wasnt park-
ing as he turned up for work at
the leisurely hour of 9.40am; he
was being dropped off in a
midnight blue, chauf-
feur-driven Bentley with
the personalised num-
berplate CCC 333.
The third letter of the
alphabet followed by
the number three and
both in triplicate.
Whatever can it all
mean?
MAKING RENT
THANKS to a sharp-eyed City
A.M. reader, up with the
lark for his regular game of
squash at the RAC Club,
who reports on the lengths
the Candy brothers are
going to keep the extrava-
gantly wealthy tenants of
One Hyde Park happy.
Pitch up outside the 1bn
development at about 6am,
reports the early-bird mole, and
a pavement-washing machine
will be hard at work scrubbing
the vicinity of the building
until Nick and Christian can
see their faces in it.
It seems when your lodgers
include the likes of the
Ukrainian oligarch Rinat
Akhmetov, the sterling main-
BENGALARU is becoming one of the most
important global centres for technology
and Indias most developed city. So the IT
capital formerly known as Bangalore was
the obvious choice for the latest multimil-
lion-pound scheme from Vinay Kapoor,
the president and chief executive of
Westcourt UK, who contributed to the
design and development of the World
Financial Centre and Canary Wharf.
Developed by Westcourt and designed
by Studio u+a, the firm founded by
Kapoor and his wife Shirley Fujikawa,
the CityView project is a complex of
three towers. One to house a limited
number of one- and two-bedroom
Four Seasons private residences
above a 230-room Four Seasons
hotel; one containing three- and
four-bedroom private resi-
dences; and one for corporate
offices with a boutique retail
development.
And all set within 6.5
acres of tranquil gardens
designed by Bangkok land-
scape architects P Landscape.
Sounds ideal so expect a
rush of international buyers
for Bengalarus premier
address when the develop-
ment opens in late 2013.
Particularly those globetrot-
ters who like a drink as the
brochure reassures thirsty
potential tenants: Personal
dual-temperature chillers will
be available to maintain pri-
vate stocks of wine under per-
fect conditions. Its the details
that count.
THE THIRD MAN
YOU WONT catch Baron Browne
of Madingley taking the tube
not if The Capitalists sighting of
the former BP chief executive
(right) parking outside his new
Riverstone Capital offices at 3,
Burlington Gardens yesterday is a
daily occurrence.
Although to be more accu-
tenance efforts of Westminster Council
are just not enough
THE RYAN GIGGS EFFECT
NEVER a dull moment at Paddy Power
even the bookmakers interim results are
entertaining. Until May, the sporting
results were on track to deliver an overall
group sportsbook gross win percentage,
said chairman Nigel Northridge.
But then the firm decided to liven
things up by offering to refund losing
bets on the UEFA Champions League final
if the favourites Barcelona beat
Manchester United, promoted by a photo-
shoot starring Imogen Thomas of Ryan
Giggs super-injunction fame.
The fact she looked particularly fetch-
ing in tight 80s-style football shorts helped
no end, wrote Northridge, who consoled
himself after the resulting 3m payout
that left the sportsbook profits in tatters
with the thought that we went for it.
Such short-term ups and downs are an
intrinsic part of bookmaking, he reas-
sured shareholders.
THE FAMOUS FIFTY
FORGET Enid Blytons Famous Five these
days, the world of childrens books is all
about The Famous Fifty an invention
of GFT Global Markets director and father-
of-two Martin Slaney, worried by the trend
of children reading less and less.
Slaney, a City A.M. columnist, has come
up with the idea to write a crowd-
sourced childrens book, like a literary
version of Consequences. So far, he has
asked 50 bestselling authors to each con-
tribute one chapter, with the aim of creat-
ing a fundraising classic of a short story
adventure, with all profits donated to the
Childrens Literacy Trust.
Slaney told City A.M: I see the chances of
pulling this off as low, but the rewards if
we do will be immense somewhat akin
to buying a deep out of the money option.
GAME CHANGER
INSURANCE and Premiership rugby: natu-
ral bedfellows, thought Elite Insurance
chief executive Jason Smart, as he signed
off a one-year deal for his company to
become the shirt sponsor of Aviva
Premiership champions Saracens.
Smart, pictured on the left of the
three suits among the Saracens with
Elites group chief operating officer
Russell Smart and group finance direc-
tor Paul Lavender, said at a recent
Saracens versus Connacht pre-season
game: Saracens are at the top of their
game and we are delighted to be associat-
ed with their continuing success.
INDIAN CITY
OASIS SEEKS
WINE-LOVING
RESIDENTS
Above left: The three
towers that make up
the CityView complex
and the Four Seasons
hotel pool (right)
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9 EDITED BY
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
The Capitalist
CITYA.M. 31 AUGUST 2011
THE awarding of a contract to supply
trains for the 15bn Crossrail project
has been pushed back raising hopes
that a UK-based firm can seal the deal.
The Crossrail scheme to build a new
railway link under central London
said it had deferred the tendering for
60 new carriages from late 2013 to
2014 .
The move means that a decision
will not be made until a government
review of public procurement has
been completed. That review is aimed
at ensuring that UK based companies
are better placed to win contracts
against European rivals.
It was announced in the wake of a
controversial decision in June to
award a consortium led by Germanys
Siemens a 1.4bn contract to build
1,200 Thameslink train carriages, trig-
gering 1,500 job losses at the Derby-
based plant of rival Bombardier.
Bombardier, Siemens, Spains CAF
and Japans Hitachi are competing for
the Crossrail contract but it was yes-
terday announced that Frances
Alstom had pulled out of the race.
Crossrails programme director
Andy Mitchell said: Crossrail had
identified that significant operational
cost savings, running into tens of mil-
lions, can be realised for taxpayers by
introducing rolling stock to the rail
network over a shorter period of
time.
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Crossrail train bids put
back as Alstom pulls out
BY JOHN DUNNE
TRANSPORT

News
10 CITYA.M. 31 AUGUST 2011
MORE NEWS
ONLINE
@
www.cityam.com
An artists impression of the new Crossrail station being planned for Canary Wharf
A NUMBER of major City property
developments are expected to come
up for grabs for 250m when a long-
awaited sale by Irish investors begins
next month.
Among the buildings ready to be
sold it 107 Cheapside, the upmarket
development near St Pauls
Cathedral.
The office and retail building,
opened three years ago, was devel-
oped by Irish property firm Menolly
but the debt secured against it was
taken on by the National Asset
Management Agency (Nama), the
Irish bad bank set up to hold weak
property loans made during the
boom over the last decade.
Senator House, owned by Avestus,
could be sold for around 77m as
well as a third, Irish-owned building
which could go for 50m.
The sales would be the latest move
in a lengthy reshuffle of commercial
property assets following the finan-
cial crisis in Ireland..
Nama was created to purge Irish
banks of their risky real estate loans.
It is one of the worlds largest proper-
ty groups and has shelled out nearly
31bn (27.46bn) for loans with a
nominal value of over 71bn, cover-
ing assets ranging from skyscrapers
at Canary Wharf to agricultural land
in the Irish countryside.
Analysts say there is a shortage of
prime London office space, which
has been worsened by confusion
around new planning laws and a
dearth of construction during the
downturn.
Nama is also believed to be ready
to sell Eagle House, a partially built
65m residential tower in Hoxton.
Agents Cushman & Wakefield have
reportedly been appointed to sell the
building at 159 City Road.
Neither Nama or Avestus respond-
ed to requests for comment yester-
day, while Menolly could not be
contacted.
FRENCH cosmetics giant LOreal post-
ed first-half operating profit slightly
below forecasts and a lower operating
margin, hit by higher advertising and
research expenses.
The provider of Garnier shampoo,
Lancome creams and Yves Saint
Laurent perfume posted earnings
before interest and tax of 1.7bn
(1.51bn), compared with an average
estimate of 1.77bn in a poll of ana-
lysts.
First-half operating margin at the
worlds largest cosmetics group fell to
16.8 per cent from 17.3 per cent last
year.
LOreal, which operates in 130
countries, repeated that it aimed to
beat the growth of the global cosmet-
ics market and improve profits this
year.
It has struck endorsement deals
with celebrities including Penelope
Cruz and Jennifer Aniston and has
benefitted from the widespread per-
ception among customers that its
products are either essential or
affordable luxuries.
LOreal heiress Liliane Bettencourt
was last week among a group of 16 of
Frances richest people who urged the
government to tax them more to help
solve the countrys financial prob-
lems.
Slipping margin
takes the shine
off LOreal profit
BY PETER EDWARDS
PROPERTY

CONSUMER

News
CITYA.M. 31 AUGUST 2011 11
City sales set
to net 250m
for Ireland
107 Cheapside (above) and Senator House are ready to head to market next month
Perform sees its shares
surge on positive outlook
despite slipping to a loss
PERFORM Group, which has seen its
shares tumble since its listing in
April, surged more than eight per
cent yesterday despite slipping to a
first half loss.
The sports media firm posted a loss
of 2.2m in its first half compared
to a 4.7m profit last year after tak-
ing a hit fromlisting and acquisition
costs. However, its stock surged as
much as 10 per cent after it issued a
positive outlook, saying it expects to
grow its operating margin to about 21
per cent in the second half, from a lit-
tle under 14 per cent in the last six
months.
The FTSE 250-listed company,
which acquired football website
Goal.com in February, saw its revenue
rise 47 per cent at 45.1m, boosted by
growth across its businesses.
Perform, which provides live sports
video, news and data to mobile opera-
tors and broadcasters, also said it is
hoping to make acquisitions in con-
sumer portals and online content
products. It will look for firms with a
turnover of up to 20m, with funds
coming from cash generated by the
IPO.
ZUCKERBERG HANDS HACKERS $40,000
FACEBOOK has handed $40,000 (28,000) to hackers for finding flaws in its website as
part of its Bug Bounty scheme. Facebook joins a growing list of companies, including
Google, which pays independent hackers for information.
Picture: REUTERS
BY STEVE DINNEEN
MEDIA

ANALYSIS l PERFORM Group PLC

p
Jul Aug
220
200
180
160
182.70
30 Aug
News
12
News
13 CITYA.M. 31 AUGUST 2011
Sir Martin Sorrells WPP is growing rapidly overseas Picture: REUTERS
SIR MARTIN Sorrells WPP yesterday
continued its blistering acquisition
drive with the purchase of Japanese
digital advertising agency DA
Consortium.
WPP has made an offer for the
entire firm, understood to be in the
region of $43m (26m).
The deal to buy the agency from
Tokyo-based ADK is expected to close
by Friday.
The deal marks Sir Martins twelfth
acquisition this year, maintaining his
focus on digital agencies. He has
bought stakes in agencies in emerging
markets including Vietnam, Brazil,
the Philippines, India, as well as devel-
oped markets such as Germany,
Canada, the US and Japan.
Sir Martin has often spoken of the
changing tide of the global economy,
with the momentum being firmly
with the emerging markets.
His firm last week reported a 37 per
cent surge in pre-tax profits but said it
expects to feel the impact of the eco-
nomic slowdown next year.
Sales jumped more than six per
cent year-on-year in the firms first
half results, which were buoyed by
strong sales in emerging markets and
digital.
WPP shares, which have lost 25 per
cent of their value since July in what
Sir Martin branded an over-reaction,
closed up 2.3 per cent.
WPP, whose ad agencies include
JWT and Ogilvy & Mather, upgraded
its 2011 outlook in April after it out-
performed peers in the first quarter.
WPP acquires
Japans DAC
digital agency
Vodafone may buy Greek rival
VODAFONE yesterday confirmed it is
in talks with Greek rival Wind Hellas
over a potential merger of operations
in the country.
The Greek telecoms industry has
been pummelled by the countrys
economic woes, with Vodafones serv-
ice revenue slumping by almost a
fifth last year.
Wind Hellas and Vodafone both
command around 4m subscribers
and a combined entity would still lag
behind market leader Cosmote
Mobile, which is controlled by
Deutsche Telekom through its 40 per
cent stake in OTE Group.
Vodafone said discussions are at an
early stage.
Wind Hellas, formerly owned by
Egyptian tycoon Naguib Sawiris, fell
under the control of its bondholders
in December after wiping out almost
2bn (1.8bn) of its debt.
Vodafone would achieve substan-
tial savings through the tie-up as well
as competing more with Cosmote.
The deal is likely to involve a com-
plete merger of the two operations
rather than a strategic partnership.
BY STEVE DINNEEN
ADVERTISING

BY STEVE DINNEEN
TELECOMS

ANALYSIS l WPP PLC

p
Jul Jun Aug
420
440
380
400
360
340
320
629.00
30 Aug
CITY A.M. understands Bank of
America Merrill Lynch is advising
Vodafone on the possible merger of its
Greek business with Wind Hellas,
although a spokeswoman for the bank
declined to confirm its participation. It is
one of a number of investment banks
used by Vodafone.
The TMT team at Bank of America
has worked on some of the biggest
deals around this year.
Bankers from the team were hired to
line up asset buyers in order to smooth
over AT&Ts $39bn (24bn) bid for T-
Mobile USA. The two sides are desper-
ate to avoid regulatory hurdles and hope
the bank can help them to seal the deal.
The sale of assets including customers
and wireless spectrum could be worth
more than $8bn.
The bank is also advising Autonomy
on Hewlett Packards $10bn bid for the
firm, alongside Qatalyst, Citigroup,
Goldman, JP Morgan Chase and UBS.
Analysts say the bid, which offered a
giant premium to the pre-bid price, is
almost certain to close.
ADVISERS: BANK OF AMERICA MERRILL LYNCH
TELECOMS,
MEDIA AND
TECHNOLOGY
TEAM
WPPS ACQUISITION DRIVE * Estimated cost
Company Date of deal Country Type of business Cost
DA Consortium 30/08/2011 Japan Digital advertising $43m*
Rockfish Interactive 19/08/2011 US Digital marketing Undisclosed
Campaigns and Grey 04/08/2011 Philippines Advertising Undisclosed
Mindset 06/07/2011 India Advertising Undisclosed
Gringo 03/06/2011 Brazil Digital advertising Undisclosed
F.biz 02/06/2011 Brazil Digital advertising Undisclosed
Commarco 19/04/2011 Germany Marketing 110m*
IRISH bookmaker Paddy Power has
reported a 15 per cent increase in
first-half operating profit boosted by
online betting. Underlying profits
were 56.8m (50.3m).
The bookmaker said profit through
its website was up, while mobile
phone applications were mobile
turnover was up 279 per cent.
Paddy Power
earnings lifted
by online bets
LEISURE

MISYS boss Mike Lawrie saw his remu-

neration slide 3.6 per cent despite
receiving a bonus worth 195 per cent
of his basic salary.
He received total compensation of
3.22m after the firm hit a key oper-
ating profit target.
Chief financial officer Stephen
Wilson, who joined Misys in 2009,
received bonuses worth 150 per cent
of his salary, taking his total remuner-
ation to more than 543,000.
Misys boss got
3.2m last year
TECHNOLOGY

ANALYSIS l Vodafone Group PLC

p
Jul Jun Aug
170
175
165
160
155
162.5
30 Aug
News
14 CITYA.M. 31 AUGUST 2011
NEWS | IN BRIEF
BG Group rings the changes
Dr John Hood will succeed Baroness
Hogg as chairman of BG Group's remu-
neration committee from 5 September,
the company disclosed yesterday. Hogg,
who has chaired the remuneration com-
mittee since mid-2005, remains on the
BG board and is a member of two other
board committees. Sir David Manning
will succeed Hood as chairman of the
sustainability committee.
Edinburgh Fringe in record year
Heavy rain in August failed to dampen
the spirits of performers and audiences
as the Edinburgh Fringe recorded a third
successive record year for acts and ticket
sales. The Fringe Society said yesterday
1.88m tickets were sold for the 2,542
productions involving some 21,000 per-
formers over the period from 5 August
to 29 August. Sales were up some
50,000 tickets from 2010.
App for spotty teenagers wins start-up award
BACK in July I wrote about the launch
of StartUp Summer, a scheme to
encourage innovation and entrepre-
neurship among students, organised
by YouGov with University College
London and Imperial College and sup-
ported by Downing Street.
It has been a fantastic six weeks,
with the students making great
progress in developing their ideas
while learning from a series of skills
shops and masterclasses given by the
likes of Luke Johnson, Martha Lane-
Fox and Ben Elliott.
Yesterday the six teams pitched to a
group of venture capitalists and a
judging panel who chose the team
that they felt had the greatest business
potential to win a cash investment.
Running alongside that was a sec-
ond competition, in which teams
worked on ways to bring existing
YouGov and UCL innovations to mar-
ket. That prize was awarded to the
team that had moved their idea for-
ward the most and closest towards a
viable launch.
There were some great pitches
from a number of teams with ideas
such as a collaborative photobook; a
way to embed the digital like button
across the real world; a company offer-
ing downloadable web companions to
unleash the power of the mouse;
Seeds for Students (which pretty much
speaks for itself); a smartphone app
for witnesses reporting crimes; and a
business selling environmentally
friendly bamboo clothing. All great
propositions, but it is perhaps not sur-
prising that in 2011 both prizes were
won by app based businesses.
The winner of the main investment,
announced at the awards ceremony at
Coutts last night, was
IamSpotless.com, a smartphone and
web platform that grades and tracks
skin health for people with acne, and
which demonstrated a definite benefit
to both patient and doctor.
It is very much an on trend idea
and the clear business plan that they
produced, which prioritised the cus-
tomer even more than some of the
other plans, made them much
deserved winners.
The second competition was won by
another team, which put in a great
performance by building a conference
app that would enable conference
organisers to have a cost-effective app
holding all their event information in
one place and, crucially, provide a way
of bringing interested delegates
together.
Thanks are due to everyone
involved in the process and congratu-
lations to both winners and all the
other teams, many of whom I am sure
have futures as the business leaders of
tomorrow.
Stephan Shakespeare is chief executive of
YouGov
BRANDINDEX
STEPHAN SHAKESPEARE
JAPANS newly selected prime minis-
ter Yoshihiko Noda announced yester-
day that further steps would be taken
to weigh down the yen.
In his former post as finance minis-
ter, Noda had recently warned mar-
kets that he was keeping a close eye
on the yen and would take action to
reverse any appreciation.
After forming a new struc-
ture, Id like to quickly put
together and announce my
thinking, including the use of
yen reserves as well as how I will
deal with the third extra
budget, Noda (pictured)
added yesterday.
The government has
been exploring options
other than currency
market intervention.
Yesterday Noda hint-
ed that assistance
for small compa-
nies financing needs could be part of
the plan.
Noda has previously said that
excessive yen rises have an adverse
impact on the Japanese economys
recovery from the March earthquake
and tsunami.
More bad news for the Japanese
economy was revealed yesterday, with
unemployment rising to 4.7 per cent
in July, up from 4.6 per cent in June.
Economists had expected the
jobless rate to stick at 4.6 per
cent. Yet the availability of jobs
improved slightly, offering
some hope for the countrys
labour market.
The jobs-to-applicants
ratio rose to 0.64 from
0.63 in June, matching
forecasts, while the
number of new job
offers rose four per
cent in July from the
previous month and
was up 12.2 per cent
from a year ago.
Japan set to
list efforts to
stop yens rise
INDIAS growth slowed to its weakest
pace for six quarters in the three
months to June, official data
revealed yesterday.
The emerging economys GDP
expanded by a still-impressive 7.7 per
cent in the second quarter of the
year, the figures showed.
Economists had expected a slight-
ly lower result of around 7.6 per cent.
High inflation and the global eco-
nomic slowdown could apply
stronger brakes to Indias growth in
future quarters, analysts said.
The Reserve Bank of India is likely
to go ahead with a further 25 basis
point hike at its next rate-setting
meeting, on 16th September, bring-
ing the repo rate to 8.25 per cent,
commented Capital Economics in a
note.
The Bank has hiked rates eleven
times since March last year.
Indian GDP growth slows
to 18 month low of 7.7pc
The Asian emerging economy continues to expand Picture: GETTY
BY JULIAN HARRIS
JAPANESE ECONOMY

News
CITYA.M. 31 AUGUST 2011
BY JULIAN HARRIS
INDIAN ECONOMY

15
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until Friday 2 September 2011
NEWS | IN BRIEF
Sentiment declines in Eurozone
Economic sentiment in the Eurozone fell
in August, the European Commission
revealed yesterday. Its Economic
Sentiment Indicator (ESI) shed 4.7
points to print 98.3, down from a
revised 103 in July. This decline resulted
from a broad-based deterioration in sen-
timent across the sectors, with losses in
confidence being particularly marked in
services, retail trade and among con-
sumers, the report said.
Euro area retail sales fall again
Retail sales across the Eurozone dropped
at their fastest rate since last October,
research firm Markit said yesterday.
Markits latest purchasing managers
index showed high street sales slipping
for the fourth straight month in the 17
nation single currency area. The index
fell to 48 in August, signalling a contrac-
tion in sales revenues. Germany saw
sales growth, but revenues fell in both
Italy and France.
Polands GDP rises by 4.3pc in Q2
The Polish economy grew by 4.3 per
cent on an annual basis in the second
quarter of the year, official data showed
yesterday. The EUs largest ex-commu-
nist economy grew by 4.4 per cent in the
first quarter of 2011. We expect it to
slow significantly in 2012 and 2013 to a
below-consensus three per cent year-on-
year as external headwinds build, said
Capital Economics.
Spanish inflation eases steadily
Spains consumer price index came in at
2.9 per cent annualised in August, its
statistics office estimated yesterday
down from 3.1 per cent in July. The sec-
ond estimate is published in two weeks.
BRITISH military equipment maker
Chemring said sales rose a third in the
three months to August, helped by the
recent acquisition of US defence firm
General Dynamics detection systems
operations.
The company, which makes ejector
seats and pyrotechnic decoys for mili-
tary aircraft, yesterday said trading
had remained strong in the three
months to end July, with revenue in
the period rising a third to 164m,
boosted by strong growth at its count-
er-IED and munitions divisions.
Its order book is at 996m, 43 per
cent up on this time last year.
OFFICE rentals specialist Regus said
yesterday sales and profits were grow-
ing as businesses hunted for tempo-
rary space amid global economic
uncertainty.
The companys January to June pre-
tax profit before exceptional items
was 13m compared with 9.7m last
year. Revenue grew 10 per cent to
565.6m.
Regus, which offers ready-to-use
offices for rentals as short as half a
day, said occupancy at its centres
opened before January 2010 was at a
record level of 86.7 per cent.
Chief executive Mark Dixon said:
That [higher occupancy] is a result of
more and more companies changing
the way they work and starting to
take up flexible workings, in particu-
lar large corporations.
The company, whose customers
include GlaxoSmithKline, Google and
Starbucks, raised its interim dividend
six per cent to 0.9p and said it was on
track to meet its full-year expecta-
tions.
We expect to see the level of
growth increase in the second half as
we are still seeing very healthy levels
of demand with more companies
looking to cut costs and move to flexi-
ble working and we will need to open
up centres to supply to that demand,
Dixon said.
The company, whose net cash stood
at 197.8m at the end of the first half,
said it would continue to look at
investing in new centres. Regus cur-
rently has centres in 88 countries.
It also named Dominique Yates as
chief financial officer, replacing
Stephen Gleadle as of Thursday.
In March, the company reported a
67 per cent drop in earnings but said
expansion and cost-cutting will
return it to growth in 2011. Regus last
year had invested 70m in opening
125 new centres and moved into seven
new countries.
Regus sees a
lift in office
space market
The Square Miles
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sponsors
BUSINESS supplies distributor Bunzl
posted an 11 per cent rise in its first-
half pre-tax profit yesterday, ahead of
market expectations, and said it had
over 300m available to expand into
new countries through acquisitions.
FTSE100-listed Bunzl, which sup-
plies businesses with products such as
carrier bags for supermarkets and
bandages for hospitals, said pre-tax
profit rose to 138.8m, ahead of the
consensus market forecast of 132.8m.
Sales rose four per cent to 2.4bn
and the operating margin was up 0.2
percentage points at 6.2 per cent,
improving across all areas.
Cash-rich Bunzl
plans expansion
Sales increase
for Chemring
BY JOHN DUNNE
PROPERTY

ENGINEERING

SUPPORT SERVICES

MACARTHUR Coal has backed a sweet-

ened offer from US-based Peabody
Energy and the worlds largest steel-
maker ArcelorMittal, in a deal that val-
ues the Australian miner at $5.2bn
(3.2bn).
Macarthurs recommendation
came after PEAMCoal, the vehicle
owned by the bidders, raised its 1
August offer by three per cent to A$16
a share, also agreeing to add the
miners A$0.16 a share dividend, for a
total offer value of A$16.16.
The miner, Australias largest pro-
ducer of pulverised coal, is highly
sought after by steelmakers and has
fended off four takeover attempts over
the past three years.
In a statement to Australias stock
exchange yesterday, Macarthurs direc-
tors said a number of parties had con-
ducted due diligence since
PEAMCoals initial offer but although
it remains possible that a superior pro-
posal might be made, none have
emerged to date and there can be no
assurances that any will emerge.
Macarthur has also agreed to no
shop and no talk restrictions to pro-
tect against talks with rival bidders.
Anglo American, one of the compa-
nies that has been exploring a counter-
bid in recent weeks, declined to
comment yesterday.
Macarthur bows to new bid
from Arcelor and Peabody
MINING

News
16 CITYA.M. 31 AUGUST 2011
Macarthur Coal
operates mines in
Queensland
Picture: REUTERS
ANALYSIS l Regus Plc
p
24Aug 25Aug 26Aug 29Aug 30Aug
70
68
66
64
67.00
30 Aug
RUSSIAN gas export monopoly
Gazproms quarterly profits beat ana-
lysts expectations yesterday as
European buyers rushed to secure
contracts at prices 21 per cent higher
than a year ago.
The company posted a 42 per cent
increase in first-quarter earnings to
478.5bn roubles (10.2bn), exceeding
market expectations of a 29 per cent
gain.
The countrys largest company by
market capitalisation boosted gas
sales to Europe, its key market, as
customers bought the fuel in antici-
pation of a price increase following a
jump in oil prices.
Gazproms gas prices in long-term
contracts are pegged to those of oil
and oil products with a time lag of
six to nine months. Analysts say the
rest of the year may prove to be weak-
er for the company due to already
high volumes of purchased gas in
Europe.
Results are fantastic, but these are
peak results for the company this
year. We expect sales to Europe to fall
in the second half of the year, said
Chirvani Abdoullaev, an equity ana-
lyst at Wood & Company Financial
Services.
Besides, there are reports that a
pipeline from Libya will start deliver-
ies soon and the European economy
is clearly slowing down, he added.
Analysts also noted a 33 per cent
rise in operational costs to 818bn rou-
bles, which wiped out the cash flow
in the quarter.
State-controlled Gazprom said rev-
enues rose by 38 per cent to 1.317 tril-
lion roubles, beating an average
analyst forecast of 1.259 trillion.
Gazprom said that its results were
driven by strong core natural gas
sales and an average pricing improve-
ment of 21 per cent year-on-year,
while its diversification into power
also boosted the bottom line.
SHARES in Spanish oil company
Repsol rose by more than four per cent
yesterday, after key shareholder Sacyr
signed a alliance with Mexicos state-
owned Pemex and pledged to buy a
further five per cent in coming weeks.
We dont rule out a change in
[Repsols] management and as a result
a more attractive dividend policy,
more favourable for Sacyr, Banesto
Bolsa analysts said in a note to clients.
Sacyr shares rose by up to eight per
cent, boosted by hopes for higher divi-
dends from its stake in Repsol and
expectations it will be able to roll over
a 5bn loan it signed to buy the stake.
Spains government will ask Pemex
to explain its plans for its stake in
Repsol, industry minister Miguel
Sebastian said yesterday.
The only thing which worries us is
to guarantee the Spanishness of
Repsol. Repsol is an important compa-
ny which is strategic for Spain and has
been very well managed up to now,
the minister said.
Repsol stocks gain after shareholder
Sacyr signs pact with Mexicos Pemex
PLANS for increasing production at
Africa-focused oil and gas firm Afren
are on track, it said yesterday, after
reporting a 42 per cent drop in profits
in the first half of the year after a
delay in the start-up of its flagship
Ebok field in Nigeria.
The London-listed company said it
is now ramping up production
towards its targeted 50,000 barrels of
oil equivalent per day (boepd) by the
end of the year, although it dropped
the upper end of the range of its aver-
age output forecast for the year.
In July it said it expected full-year
production to average between
25,000 and 30,000 boepd, down from
the 40,000 boepd it forecast in May.
Pre-tax profit fell to $43.7m
(26.8m) from $75.4m in the first half
of last year as production fell 36 per
cent to 13,000 boepd.
Afren said in July it had agreed to
buy stakes in two Kurdistan opera-
tions for $588m, extending the
groups reach into the Middle East.
Afren says oil output is on
the up after first half drop
ENERGY

KURDISTAN-focused explorer Gulf

Keystone Petroleum jumped 4.2 per
cent yesterday, even after the firm
played down suggestions it was in
sale talks.
A Sunday newspaper reported that
Gulf Keystone was looking to sell
itself in a deal that could value it at
up to 1.4bn and that chief executive
Todd Kozel had told banks he would
launch a beauty parade for advisers
next month to help assess the firms
strategic options.
Whilst there is clearly increasing
interest in the region in which Gulf
Keystone operates, the board is not in
discussions with regard to a sale of
the company, Kozel said in a state-
ment yesterday.
We consider the true value of the
company to be significantly above any
figures quoted in recent press arti-
cles.
He added that the company had
built an enviable asset base in
Kurdistan.
Gulf Keystone plays down
suggestions of sale talks
ENERGY

IRISH engineering firm Kentz posted a

leap in profits yesterday, driven by its
construction and technical support
services units, and rewarded share-
holders with an increase in dividend
after its promotion from AIM to
Londons main market in July.
Kentz said pre-tax profits for the
year to June were $37.7m (23.1m),
compared with $25.2m a year ago, and
revenue rose 48 per cent to $643.5m.
The oil and gas services company,
whose clients include Chevron , Royal
Dutch Shell, BP and Exxon Mobil, also
raised its interim dividend by 67 per
cent to 5 cents per share.
The group won a contract along
with its joint-venture partner Chicago
Bridge & Iron Co last month worth
$2.3bn to develop the Gorgon gas proj-
ect in Australia.
Kentz said its order intake to the
end of July stood at $1.56bn compared
with $1.27bn in the full year of 2010,
leaving its backlog at July-end at
$2.39bn.
Hugh ODonnell, chief executive,
said the backlog continues to
strengthen as the company continues
to win new contracts in Australia and
the Middle East.
The company, based in Tipperary,
was floated on the Alternative
Investment Market in 2008 by the
Malaysian investment group Peremba.
Shares closed up 3.8 per cent last
night at 433p.
Kentz posts
leap in first
half takings
SUPPORT SERVICES

LAMPRELL reported a 40 per cent

surge in first-half adjusted net profit
yesterday as revenue from new proj-
ects increased, and the oil services
group said it would meet expectations
for the second half.
The UAE-focused group, which spe-
cialises in rig refurbishments and con-
struction, said it worked on the
construction of seven new build
marine projects in the first half.
Group revenue more than doubled
to $383.6m (235.1m). At the end of
July, Lamprells order book stood at
$869m, compared to $836m last year.
Contracted order book, other
potential projects and the opportuni-
ties arising from the [newly-acquired]
MIS business, gives the board confi-
dence of meeting management expec-
tations in the second half of 2011 and
beyond, it said in a statement.
For the six months to 30 June, the
company reported an adjusted net
profit of $27m, compared with
$19.3m last year.
Lamprell projects pay off
as earnings jump by 40pc
ENERGY

BRITISH oil services firm Petrofac

has been awarded two North Sea
contracts by the UK arm of GDF
Suez, the French-listed utility compa-
ny, worth 30m over three years.
The FTSE 100-listed company, led
by chief executive Ayman Asfari (pic-
tured), said it will provide opera-
tions, maintenance and engineering
to GDF Suez E&P UK and will supply
all offshore personnel, creating
around 100 new jobs in the North
Sea over the next five years.
Jean-Claude Perdigues, managing
director at GDF Suez E&P UK,
said: These two new con-
tracts represent a signifi-
cant milestone for GDF...
and will help the company
to conduct its North Sea
operations safely, efficiently
and cost effectively.
Last week
Petrofac posted
b e t t e r - t h a n -
expected first-
half profits of
$246.3m and
said it was
c o n f i d e n t
demand from
national oil firms would con-
tinue to fuel future growth.
New contract wins in
Algeria, Iraq and Malaysia
boosted its order book by
$2.2bn to $11.4bn, while a
recent breakthrough in the
tough Mexican market also
helped improve
prospects.
Petrofac soared 5.8
per cent yesterday
to close at 12.98.
Petrofac wins North Sea bids
BY KASMIRA JEFFORD
SUPPORT SERVICES

10bn profits
top forecasts
for Gazprom
BY HARRY BANKS
ENERGY

BY HARRY BANKS
ENERGY

News
17 CITYA.M. 31 AUGUST 2011
Gulf Keystone operates primarily in Kurdistan Picture: REUTERS
ANALYSIS l Repsol YPF

24Aug 25Aug 26Aug 29Aug 30Aug

19.50
19.00
18.50
18.00
19.68
30 Aug
ANALYSIS l GAZPROM OAO
RUB
24Aug 25Aug 26Aug 29Aug 30Aug
178
176
174
172
170
177.18
30 Aug
News
18 CITYA.M. 31 AUGUST 2011
First State Investments
First State, a division of the consolidat-
ed asset management business of the
Commonwealth Bank of Australia, has
appointed Mario Maia as a senior ana-
lyst in the Sydney Global Resources
team. Maia, who will focus on com-
modities, joins from Merrill Lynch
Australia where he was a research vice
president and a research associate.
Chadbourne & Park
Michael Socarras has joined the com-
mercial litigation, international dispute
resolution and investigations practices
in Washington DC. Socarras was previ-
ously a partner at McDermott Will &
Emery in the firms Washington office.
Quercus Publishing
The independent publisher has appoint-
ed Paul Lenton, formerly on the senior
executive team at Creature London, as
finance director. Mike McGrath,
Lentons predecessor, has taken on a
wider role of executive director, group
sales, and will oversee all worldwide
sales, marketing, rights, co-edition and
publicity efforts.
Mirae Asset
The Asian asset-management company
has appointed Karl Waltr as head of
the Nordic region, based in London.
Waltr joins Mirae Asset from Aviva
Investors, where he was business
development director.
Mercer
The HR group has appointed Neil
Puxley as a partner in its retirement,
risk and finance division. Prior to join-
ing Mercer, Puxley was a principal for
Aon Hewitt and a partner at Watson
Wyatt, where he was responsible for
the groups actuarial division in
Scotland.
Oriel Securities
The adviser has appointed Mark
Howson to its research team. Howson
joins from ABN Amro/RBS Group,
where he worked in the
support services & construction team
for over ten years.
AXA Real Estate
Henrik Bastman, formerly head of asset
management for the Nordic retail fund
at EFM, has been hired as Nordic head
of asset management at AXA Real
Estate Investment Managers.
CITY MOVES | WHOS SWITCHING JOBS Edited by Harriet Dennys
+44 (0)20 7092 0053
morganmckinley.com
To appear in CITYMOVES please email your career
updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
in association with
Wall Street gains
after day of jitters
U
S stocks rose for a third straight
day yesterday in a volatile ses-
sion, after minutes from the
latest Federal Reserve meeting
boosted expectationsthe central bank
will act again to stimulate the econo-
my.
Equities surged near the close of
the market, though they quickly
pared gains, after the release of the
Feds 9 August minutes showed the
US central bank had considered bold
steps to help the fledgling economy.
News earlier in the day showing
consumer confidence fell to its worst
level in two years cemented the grow-
ing belief the Fed will intervene
when it meets in late September.
Many market participants had
thought that the odds of more action
from the Fed were slim.
Equities fell as much as one per
cent in the morning after the
Conference Board, an industry group,
reported US consumer confidence
crumbled in August to its lowest level
in more than two years due in part to
fallout from political wrangling over
a budget deal. Caterpillar and Boeing
were among the top boosts to the
Dow. Boeing was upgraded to neu-
tral by Nomura, which see improved
profits from the companys 737 and
777 plane programs. Caterpillar rose
1.9 per cent to $89.79, while Boeing
gained 2.2 per cent to $65.99.
The market has suffered from a
long bout of selling for the better part
of August, falling nearly 18 per cent
from its 2011 high in April to a recent
low, though it has risen for six of the
last seven sessions.
The Dow Jones industrial average
was up 20.39 points, or 0.18 per cent,
at 11,559.64. The Standard & Poors
500 Index was up 2.80 points, or 0.23
per cent, at 1,212.88. The Nasdaq
Composite Index was up 14.00 points,
or 0.55 per cent, at 2,576.11.
The rebound into positive territory
was seen as a sign recent selling was
overdone. Technical analysts pointed
to Mondays S&P close above 1,200 as
a sign bulls may be regaining their
footing. The S&P has risen more than
seven per cent over the past seven ses-
sions but remains 6.1 per cent lower
for August.
Financials were the days big losers,
with Bank of America off 3.2 per cent
to $8.12 and JPMorgan Chase & Co
down 1.5 per cent at $37.06. Both
firms are Dow components.
In other data, US single-family
home prices fell slightly in June as the
market crawled along. Volumes were
light, with about 7.2 billion shares
traded on the New York Stock
Exchange, the American Stock
Exchange and Nasdaq.
B
RITAINS top shares advanced
yesterday, playing catch-up
with Europe after a long holi-
day weekend, led by miners and
banks as brokers argued that the
recent stock market sell-off has
thrown up bargains in the two sec-
tors.
JP Morgan highlighted opportuni-
ties among miners following their
poor performance in August, seeing
rewards for those prepared to buy
exposure to emerging markets which
it thinks will start to outperform
again.
Miners on which the broker has an
overweight rating and have more
than 40 per cent emerging market
exposure include Vedanta Resources,
Anglo American and Xstrata, which
added 7.3 per cent, 6.3 per cent and
4.7 per cent respectively.
The FTSE 350 Mining index has
dropped almost 13 per cent in
August, set for its biggest monthly
rout since October 2008 when panic
swept through financial markets
after the collapse of US investment
bank Lehman Brothers.
Analysts at Deutsche Bank, mean-
while, talked up the banking sectors
attractions on valuation grounds.
Royal Bank of Scotland led the sec-
tor higher, up eight per cent, as
Deutsche Bank raised its rating on
the stock to buy. Barclays, the bro-
kers top pick in the sector, firmed 6.7
per cent.
Among individual stock movers,
automotive parts maker GKN added
4.8 per cent after Nomura lifted its
rating on the firm to buy from
reduce.
We think that to what extent
there was a mid-cycle slowdown at
GKN, it appears to be over. We now
see a strong structural growth out-
look at a reasonable valuation,
Nomura said.
The UK benchmark index ended
138.74 points, or 2.7 per cent, higher
at 5,268.66, although other euro zone
markets retreated as weak demand at
an Italian bond auction hit senti-
ment.
The FTSEs really only gaining the
benefit of yesterdays European rally,
Peter Dixon, economist at
Commerzbank, said.
Hold fire; I think investors will
probably demonstrate caution over
the weeks to come and I wouldn't be
surprised if we see a lot more volatili-
ty.
Investors drew some strength from
news of tie-ups. US oil company
Exxon and Russias Rosneft signed a
deal yesterday to develop oil and gas
reserves, and Greece's Alpha and EFG
Eurobank, on Monday, sealed a merg-
er.
But economic data continued to
throw up concerns about growth
prospects, with US consumer confi-
dence crumbling in August to its low-
est level in more than two years. US
blue chips were flat by London's close.
And on this side of the Atlantic,
investor sentiment in Britains stock
market has fallen to its lowest level
since December 2008, as worries
about high inflation and market
volatility grow, a survey has found.
There are a few positive signs but
there is still a long way to go to come
out of this, Martin Dobson, head of
trading at Westhouse Securities, said.
I wouldnt be surprised to see the
market going better for a couple of
days, but I think then reality will
probably hit home and there will be a
fall back to probably nearer the 5,100
level on the FTSE.
That reality, he said, will likely
become more apparent with further
economic data, perhaps in the shape
of Fridays US August jobs report.
Miners and bankers lead rush
to share in European success
THELONDON
REPORT
THENEW YORK
REPORT
BEST OF THE BROKERS
To appear in Best of the Brokers email your research to notes@cityam.com
ANALYSIS l Aeroports de Paris SA
Jun Jul Aug

65.00
62.50
60.00
57.50
55.00
52.50
56.85
30 Aug
AEROPORTS DE PARIS
Nomura rates the French airport authority as a buy with a target price of
68 ahead of its results, due out today. From January to June, total passen-
ger volumes grew by more than six per cent, double the firms 3.2 per cent
annual guidance and leaving potential for outperformance for the full year.
The broker forecasts earnings before tax and deductions of 462m, up
almost seven per cent year on year.
ANALYSIS l Berendsen PLC
Jun Jul Aug
p
550
525
500
475
450
492.00
30 Aug
BERENDSEN
Citigroup rates the textile maintenance group as sell/medium risk with a
target price of 400p, and updates its estimates after the companys first half
results beat expectations. Four per cent growth in earnings was driven by
two per cent organic growth, and a strong performance in the Textile Nordic
division. The broker says that although Berendsen is a best-in-class operator,
its markets are well outsorced, and the stock is now trading at a premium.
ANALYSIS l Gas Natural Sdg SA
Jun Jul Aug

14.50
14.00
13.50
13.00
12.50
12.00
12.24
30 Aug
GAS NATURAL
Goldman Sachs maintains its neutral rating on the Spanish energy company,
and has a target price of 17.20 for the stock. The broker has updated its esti-
mates for the first half results, reducing the impact of the Sonatrach gas pric-
ing arbitration on earnings from gas supply, and to reflect recent asset
disposals. Its estimates for 2012-15 therefore increase by two per cent to six
per cent, and its target price raises by three per cent.
22Jun 25Jul 23Aug
6,200
5,400
5,000
4,800
5,600
5,800
6,000
ANALYSIS l FTSE
5268.66
30 Aug
HSBC Private Bank
HSBC Private Bank has appointed Katharine
Brace as associate director on the media
and entertainment team. Brace, who will
report to Nick Price, managing director and
global head of the media and entertainment
group, joins from Barclays Wealth, where
she was a vice president in the sports,
media and entertainment team. Prior to
joining Barclays Wealth in 2008, Brace
worked for International Management
Group and then Catella Financial Office.
M
ORTGAGE rates are plummeting.
Interest rates on gilts and swaps
those things that indicate the
price of fixed-rate mortgages
have been heading downwards for some
time and look to set to stay there. Now
lenders seem to have caught on and have
started dishing out the goods. Last week,
Chelsea Building Society launched an
almost revolutionary deal of a 3.99 per cent
ten-year fixed-term mortgage. The rate is
pretty much unheard of, says personal
finance expert Andrew Hagger of
Moneynet.co.uk, a year or so ago, any-
thing below 5 per cent on a five-year deal
was good. But is this mortgage as good as
it seems?
The deal allows for certainty and peace
of mind, says Danny Cox of Hargreaves
Lansdowne. Any family on a tight budget
will appreciate knowing precisely how
much they are obliged to pay for the next
ten years. And while the 1,495 arrange-
ment fee seems steep, you shouldnt have
to pay another one for ten years.
AIMED AT SAFE BETS
The trouble with this deal, however, is that
it is aimed at uber-safe and stable borrow-
ers. You need a 30 per cent deposit. Clare
Francis of Moneysupermarket, thinks that
this could be connected to the banks need
to hit lending targets this year. Chelsea
declined to comment. But with consumer
confidence and banks eligibility criteria so
weak, Francis thinks this is a plausible rea-
son for the give-away
prices.
Its not just a
large deposit
that might
hold you
b a c k .
Borrowers keen
for this deal need to be sure that they
arent moving home. While the deal is
notionally portable, Francis says most peo-
ple dont tend to move their mortgage with
them and often end up taking the finan-
cial hit. The penalties for early repayment
are high. Those paying back a mortgage
within the first three years are charged 7
per cent of the mortgage balance. Thats up
to 14,000 on a 200,000 loan.
Reassuringly, however, Francis says: I
doubt those confident that they are staying
put for the next ten years will regret sign-
ing up to a 3.99 per cent rate.
Cox is less certain: The rate is much
higher than the Bank of England (BoE) base
rate, so I dont think it is a good idea for
those on good base rate tracker deals. He
expects rates will stay lower for longer than
many expect. Those on base rate tracking
mortgages can use any extra disposable
income to pay down their capital and take
real advantage of the cost savings.
TAKING YOUR PUNT
Borrowers must take a punt on the BoEs
actions. Those who think rates will rise
should grab a good deal like Chelseas
while it lasts. Those who think the base
rate will stay low over the next decade
should use a tracker to get the best deal.
But beware of the risks that come with a
tracker: who knows what will happen in
the next decade. From July 1988 to
September 1991 interest rates were over 10
per cent. Could you cope with these rates
today?
Great news for borrowers, but make sure
you understand the ins and outs of the
loan commitment, writes Donata Huggins
Cheaper long-term mortgages are back
Wealth Management| Personal Finance
19
THE DEAL: Chelsea Building Society is offering a 10-year fixed-
rate mortgage at 3.99 per cent.
THE GOOD: If you have even the slightest inkling of a rate rise
in the next decade buy this its one of the lowest ten-year
offerings seen in years. Not to mention, knowing precisely how
much your payments will be for a decade is reassuring.
THE BAD: You need a 30 per cent deposit to qualify and the
arrangement fee is expensive at 1,495, but spread across ten
years, this can work out cheaper.
THE UGLY: This deal gets nasty if your circumstances change.
Divorce, upsizing or downsizing could land you with a cruel 7
per cent penalty in the first three years.
FOCUS ON: CHELSEA BUILDING SOCIETY DEAL
Financing options can look very different years later Picture: REX
BEST LONG-TERM MORTGAGE DEALS Source: MoneySupermarket.com
Lender Fixed/Flexible Rate Until Loan to value Arrangement/
(per cent) Booking fee
Chelsea BS Fixed 2.39 30 Nov 2013 70 1,495
Skipton BS Fixed 2.48 30 Nov 2013 60 1,995
Nationwide BS Fixed 2.89 3 Years 70 999
Yorkshire BS Fixed 2.94 30 Sep 2014 75 995
Chelsea BS Fixed 3.29 30 Nov 2016 70 1,495
Leek United BS Fixed 3.49 30 Nov 2016 75 495
Chelsea BS Fixed 3.99 30 Nov 2021 70 1,495
Chelsea BS Fixed 4.19 30 Nov 2021 70 195
T
HE markets are once more weighing
up the Eurozone. Yesterday, the euro
fell against all major currencies
upon the growing suspicion that
Jean-Claude Trichet is becoming dovish,
together with the release of bad data. In
the European Commissions business and
consumer confidence survey, the broad
economic sentiment indicator (ESI) for
August came in at 98.3, down from 103.0,
against broad expectations of around 101.0.
A RUNNY YOLK
Many commentators think Trichet is going
soft, picking up on his comment during
Mondays testimony to the EU that risks to
the medium-term outlook for price devel-
opments are under study. However,
despite this hint at a more dovish
approach, Kathleen Brooks of Forex.com
doesnt expect a sharp reverse-turn in the
ECBs thinking. She says a cut in rates
would damage the ECBs credibility, partic-
ularly with real interest rates adjusted for
inflation still negative. In any case,
Trichet doesnt need to cut rates to push
low rates on the markets (see graph). As
Simon Smith, chief economist at FxPro,
points out: In some senses, the ECB has
already shifted its stance, given that the
overnight rate has traded below 1 per cent
through nearly all of August. As such,
while the ECB has hiked rates twice, this
has been far from fully reflected in mar-
kets, with 3-month overnight swap rates
actually lower than was the case when the
ECB first hiked back in April.
CHICKEN RUN
Yesterdays successful Italian bond auction
will not be enough as Europes chickens
come home to roost. Brooks describes
Europe as mired in trouble, pointing to
German lawmakers resistance to the legal-
ity of the extension of the European
Financial Stability Facility (EFSF), Spains
Eurozone confidence
plummets as markets
wake up to fact that
the crisis isnt over,
writes Philip Salter
Coming home to roost Picture: GETTY
Wealth Management | Foreign Exchange
20 CITYA.M. 31 AUGUST 2011
Europes playing chicken
with looming recession
D
OUBLE dip or muddle through? Thats been
the central question facing the currency mar-
kets. As economic data started to deteriorate
across the world amidst growing investor
unease with fiscal policies in US and Europe, the
bears have been eager to forecast another global
contraction. Yet, although the latest data has been
anaemic, it nevertheless remains in positive growth
territory, suggesting that the global economy
remains in expansionary mode. That fact goes a long
way towards explaining why risk currencies such as
the Australian dollar, the Canadian dollar and even
the euro have been generally well bid, despite the
recent turmoil in global capital markets.
This relative complacency could be sorely tested
this Friday when the US non-farm payroll (NFP)
report comes out at 1.30pm. The expectations in
the market are for a relatively modest 90,000
print versus 117,000 the month prior, but that
would still be in line with the muddle through sce-
nario and should be generally supportive for risk
currencies. However, some analysts are predicting
a much more dour result. The sickening decline in
the latest Philly Fed reading, which plunged to -30.7
from 4.0 projected suggests that the NFP could
print negative this month, which would send
investor sentiment plummeting and will likely trig-
ger massive liquidations in the risk trade, as mar-
kets begin to price in the second coming of global
recession.
Although the Philadelphia Fed survey is only one
small data point across the US economic landscape,
it has a very strong correlation with the broader
employment figures. Unfortunately, the best fore-
caster of the NFP the employment subcomponent
of the ISM services report will not be released
until after the NFP results, and will therefore be
useless in helping traders to handicap the number.
The currency markets will likely mark time until
Fridays key economic release, but could become
very volatile in the wake of a major surprise either
way. The euro-dollar, which has been glued to the
$1.44-$1.45 range all week could break towards
$1.50 level, or head to $1.40 depending on how
data prints.
RISK TRADE
HINGES ON US
EMPLOYMENT
BORIS SCHLOSSBERG
DIRECTOR OF CURRENCY RESEARCH, GFT
general election and hefty debt auction
towards the end of this year, and contin-
ued wrangling over Finlands collateral
demands in return for lending to Greece.
Also, expectations for Eurozone growth
are being cut. Jennifer McKeown, senior
European economist at Capital Economics,
says the latest survey evidence suggests
that the consensus forecast for Eurozone
GDP to rise by 1.5 per cent next year is far
too strong. Adding, even our own projec-
tion of a 0.5 per cent annual gain is start-
ing to look slightly optimistic. Crucially,
Germanys ESI dropped from 112.7 to 107.0.
Given that so much hope rests upon the
Eurozones largest economy, the sentiment
of the German people is key to the continu-
ation of their bankrolling of the single cur-
rency.
While the sun worshiping UK expatriate
pensioners in the far-flung corners of
Europe might be praying for a collapse in
the value of the euro, so that they can
make hay with their sterling denominated
pensions, the value of their Spanish villas
would plummet if converted back into the
peseta. UK residents should also be wor-
ried, as it would signal a recession that
would infect the UK. Its impossible to
know whether Europes leaders have the
policy leavers to avoid recession, but even
were a silver bullet to exist, they would at
present lack a leader with the guts to pull
the trigger.
Managers rebalancing their
currency exposure can move
the market, writes Craig Drake
A
S September rolls around, so does
the opportunity to take advantage
of currency movements as hedge
funds and portfolio managers
move to rebalance their currency expo-
sure at the end of the month.
The greater the swing in principal asset
prices, primarily those of equities and
bonds, the more likely it is that fund
managers are going to be over or under
exposed to certain currencies.
During months that equity markets
endure a net monthly decline, currency
managers tend to be left over-hedged on
their offshore equity exposure. As a
result, portfolio and hedge fund man-
agers will move to reduce their currency
hedge requirements.
If this monthly decline has been large
enough, adjustments in ratios can gener-
ate a sizeable intra-day dip. Sizeable
declines in the MSCI world index in the
last month seem to suggest that we are
heading in this direction. At one point
the index had dropped by 14.2 per cent.
Hedge fund managers
often move to trim
their currency
exposure
Picture: GETTY
DOLLAR DEFICIENCIES
According to Kathleen Brooks, research
director for Forex.com, we started to see
the effects of portfolios being over-hedged
yesterday, where funds were short dollar
and needed to buy dollars to rebalance
their portfolios. The dollar strengthened
across the board, with euro-dollar moving
from $1.4533 to $1.4380. This is a bit like
a synthetic appreciation of the dollar,
says Brooks. Once the month-end flows
stop later in the week, we could see a
reversal.
AIMING FOR THE ANTIPODES
Besides the euro-dollar pair, many ana-
lysts are setting their sights on the
Australian dollar-dollar for an end-of-
month dip. Pointing to the 8.2 per cent
net decline in the MSCI, Richard Grace,
chief currency strategist for the
Commonwealth Bank of Australia, pre-
dicts a proportional move from currency
hedgers. It is likely that the size of the
monthly currency hedge adjustment that
corresponds to an approximate 8.2 per
cent decline in the global equity market
will generate an end-of-month dip in
Australian dollar-dollar of up to 1.5 per
cent.
With the Australian dollar hovering
around the $1.069 mark, traders should
look today for dips to the $1.0500 mark to
buy in.
Traders should be aware, however, of
the short term nature of this strategy.
While Australian dollar-dollar looks set to
hit $1.0800 by the end of the week,
Alejandro Zambrano, market strategist
for FXCM, warns that fundamentals could
come into play once the end-of-month dip
has played out. The survival of this setup
will not depend on the technical outlook,
but rather the outcome of the US ISM
non-manufacturing survey tomorrow and
the US non-farm payrolls report on
Friday. Zambrano adds: If any of these
reports do not hit the mark, traders will
be exiting their long positions before we
reach either $1.04 or $1.08.
FOREX ANALYST PICKS
FOREX STRATEGIST
JOEL KRUGER
My pick: Short Kiwi dollar-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
FOREX STRATEGIST
ILYA SPIVAK
My pick: Stay short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold euro-dollar in late July at $1.4328 expecting escalation in the EU
debt crisis compounded by a downward revision in investors expecta-
tions of global economic growth driving the dollar broadly higher on safe-
haven demand. With hopes of QE3 fading after Ben Bernankes speech
last week, I expect these larger themes to reclaim dominance over price
action and will remain short, initially targeting a close below $1.3975. A
stop-loss will be triggered on a daily close above $1.4535.
In the process of a corrective rally, since basing out by $0.8000 several days
back, with the market rallying back above $0.8500. However, any additional
gains from here are seen as limited, with a lower top sought out somewhere
around $0.8500 in favor of the next major downside extension and bearish
resumption. Look for a break back below $0.8250 to confirm and accelerate,
while only a daily close above $0.8600 concerns. Position: short at $0.8525
for $0.8000 objective. Stop on daily close above $0.8600.
FOREX STRATEGIST
JOHN KICKLIGHTER
My pick: Short euro-dollar and long dollar-yen
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
The big fundamental threats are fading into distant specters. For
me, that signals a switch back to short-term setups rather than look-
ing for big breaks and trends. None of my three thematic setups
dollar-yen, euro-dollar and euro-Swiss franc from last week trig-
gered. Going forward, I think a false break is a likely outcome for
euro-dollar and I would like to play the reversal. Also, with the right
fundamentals, I still like the long dollar-yen picture.
T
HE Kiwi dollar has gone up against
the US dollar to its highest since the
beginning of the month, after build-
ing permits had its biggest jump
since 2008 and Chinese manufacturing
increased. This data shows traders are
hungry for riskier assets at the moment,
which could see the Kiwi push higher
short-term. Capital Spreads quotes New
Zealand dollar-dollar at $0.8485-
$0.8489.
Last weeks anticipated speech by Ben
Bernanke disappointed those looking for
an expansion of QE. Market focus now
returns back to European fiscal troubles.
Risk-tolerance is buoyant, helping stocks
record strong gains in early trading this
week. If there isnt further deterioration,
we should see commodity currencies
continue to retrace their early August
losses against the dollar, Swiss franc and
yen. On Australian dollar-Swiss franc
Alpari quotes SFr0.8714-SFr0.8716.
Euro-dollar is the focus of many
investors today, as the important
German unemployment figures are
released. The pair broke below its sup-
port level on Tuesday and remains under
pressure, with the relative strength index
(RSI) being badly directed. Lets just see
if the moderate improvement in German
Labour figures covers the on-going
periphery problems. Capital Spreads
quotes $1.44145-$1.44155.
Dollar-yen seems to be finding some
support around the 76.00 level and the
recent strength in equity markets has
not been complimented by the usual dol-
lar weakness one would expect. This
could be a sign that the dollar sell off is a
thing of the past and renewed strength
might be around the corner. Capital
Spreads quotes 76.86-76.87.
Philip Salter
THE TIPSTER
KIWIS RIPE FOR
PICKING AND
AUSSIE COULD
COME FROM
DOWN UNDER
Cash in as
funds move
to balance
fx hedging
Wealth Management
21 CITYA.M. 31 AUGUST 2011
LON GD ONCE FIX AM...........1787.00 0.00
SILVER LDN FIX AM ..................40.72 0.00
MAPLE LEAF 1 OZ ....................44.08 0.56
LON PLATINUM AM................1824.00 0.00
LON PALLADIUM AM...............747.00 0.00
ALUMINIUM CASH .................2328.50 0.00
COPPER CASH ......................9090.00 0.00
LEAD CASH...........................2470.00 0.00
NICKEL CASH......................21250.00 0.00
TIN CASH.............................23700.00 0.00
ZINC CASH ............................2210.00 0.00
BRENT SPOT INDEX ................111.88 1.15
SOYA .....................................1438.00 52.00
COCOA..................................3120.00 112.00
COFFEE...................................284.95 10.30
KRUG.....................................1893.80 57.10
WHEAT ....................................173.25 1.50
AIR LIQUIDE........................................88.48 0.56 100.65 80.45
ALLIANZ..............................................68.10 -0.22 108.85 64.38
ALSTOM ..............................................30.97 0.06 45.32 28.36
ANHEUS-BUSCH INBEV ....................37.87 0.51 46.33 33.85
ARCELORMITTAL...............................14.61 0.26 28.55 13.03
AXA......................................................10.61 0.14 16.16 9.27
BANCO SANTANDER...........................6.15 -0.00 9.80 5.54
BASF SE..............................................48.03 -0.34 70.22 40.92
BAYER.................................................43.89 -0.58 59.44 41.33
BBVA......................................................6.09 0.02 10.21 5.52
BMW ....................................................54.25 -0.16 73.85 40.16
BNP PARIBAS.....................................34.74 0.34 59.93 32.10
CARREFOUR ......................................18.65 -0.20 36.06 16.68
CREDIT AGRICOLE..............................6.57 -0.07 12.92 5.63
CRH PLC..............................................11.76 0.03 17.40 10.87
DAIMLER.............................................36.18 -0.03 59.09 33.27
DANONE..............................................46.20 0.63 53.16 41.84
DEU.BOERSE OFFRE ........................40.19 -0.34 55.75 37.03
DEUTSCHE BANK..............................27.50 0.10 48.70 26.01
DEUTSCHE TELEKOM.........................9.53 -0.09 11.38 8.80
E.ON.....................................................14.72 -0.38 25.54 13.19
ENEL......................................................3.31 -0.06 4.86 3.20
ENI .......................................................13.48 0.07 18.66 11.83
FRANCE TELECOM............................13.04 0.03 17.45 11.97
GDF SUEZ ...........................................21.33 -0.23 30.05 18.32
GENERALI ASS...................................12.25 0.15 17.05 10.34
IBERDROLA..........................................5.00 -0.05 6.50 4.66
ING GROEP CVA...................................5.78 0.15 9.50 5.30
INTESA SANPAOLO.............................1.13 -0.02 2.53 1.07
KON.PHILIPS ELECTR.......................14.08 0.10 25.45 12.85
L'OREAL..............................................77.01 -1.43 91.24 71.00
LVMH..................................................114.45 1.30 132.65 89.72
MUNICH RE.........................................88.27 -0.90 126.00 84.51
NOKIA....................................................4.33 0.13 8.49 3.33
REPSOL YPF.......................................19.68 0.79 24.90 17.31
RWE.....................................................25.23 -0.72 55.88 24.10
SAINT-GOBAIN...................................33.61 0.07 47.64 27.81
SANOFI ................................................49.55 -0.31 56.82 42.85
SAP......................................................37.14 -0.01 46.15 32.88
SCHNEIDER ELECTRIC.....................89.86 -0.38 123.65 81.17
SIEMENS .............................................70.35 -0.02 99.39 66.50
SOCIETE GENERALE.........................22.06 -0.05 52.70 20.16
TELECOM ITALIA..................................0.83 0.00 1.16 0.77
TELEFONICA ......................................14.08 -0.02 19.69 13.01
TOTAL..................................................33.16 -0.01 44.55 30.34
UNIBAIL-RODAMCO SE...................146.50 1.45 162.95 124.50
UNICREDIT............................................0.92 -0.01 2.05 0.86
UNILEVER CVA...................................23.08 -0.02 24.08 20.82
VINCI ....................................................35.54 0.15 45.48 32.05
VIVENDI ...............................................16.18 0.13 22.07 14.10
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5268.66 138.74 2.70
FTSE 250 INDEX . . . . . . . 10243.15 246.05 2.46
FTSE UK ALL SHARE . . . . 2733.89 70.36 2.64
FTSE AIMALL SH . . . . . . . . 759.17 14.71 1.98
DOWJONES INDUS 30 . . 11559.95 20.70 0.18
S&P 500 . . . . . . . . . . . . . . . 1212.92 2.84 0.23
NASDAQ COMPOSITE. . . . 2576.11 14.00 0.55
FTSEUROFIRST 300 . . . . . . 940.02 20.99 2.28
NIKKEI 225 AVERAGE. . . . 8953.90 102.55 1.16
DAX 30 PERFORMANCE. . 5643.92 -26.15 -0.46
CAC 40 . . . . . . . . . . . . . . . . 3159.74 5.54 0.18
SHANGHAI SE INDEX . . . . 2566.60 -9.82 -0.38
HANG SENG. . . . . . . . . . . 20204.17 339.06 1.71
S&P/ASX 20 INDEX . . . . . . 2558.20 -0.70 -0.03
ASX ALL ORDINARIES . . . 4341.40 7.70 0.18
BOVESPA SAO PAOLO. . 55385.03 524.30 0.96
ISEQ OVERALL INDEX . . . 2485.65 14.14 0.57
STI . . . . . . . . . . . . . . . . . . . . 2791.89 43.71 1.59
IGBM. . . . . . . . . . . . . . . . . . . 853.91 4.03 0.47
SWISS MARKET INDEX. . . 5449.16 2.69 0.05
Price Chg %chg
3M........................................................82.07 -0.03 98.19 76.50
ABBOTT LABS ...................................51.74 0.53 54.24 45.07
ALCOA ................................................12.36 -0.06 18.47 9.97
ALTRIA GROUP..................................27.02 0.24 28.13 22.26
AMAZON.COM..................................210.92 4.39 227.45 122.46
AMERICAN EXPRESS........................48.66 0.11 53.80 37.33
AMGEN INC.........................................55.24 0.45 61.53 47.66
APPLE...............................................389.99 0.02 404.50 236.78
AT&T....................................................29.62 0.36 31.94 26.50
BANK OF AMERICA.............................8.12 -0.27 15.31 6.01
BERKSHIRE HATAW B.......................72.26 -0.34 87.65 66.51
BOEING CO.........................................66.03 1.43 80.65 56.01
BRISTOL MYERS SQUI ......................29.12 -0.17 29.73 20.05
CATERPILLAR....................................89.83 1.68 116.55 63.36
CHEVRON...........................................98.40 -0.34 109.94 72.93
CISCO SYSTEMS................................15.63 -0.11 24.60 13.30
CITIGROUP.........................................30.94 -0.35 51.50 25.40
COCA-COLA.......................................69.86 0.13 70.28 55.00
COLGATE PALMOLIVE......................90.64 0.87 90.90 73.12
CONOCOPHILLIPS.............................67.84 0.06 81.80 52.00
CVS/CAREMARK................................35.76 0.21 39.50 26.84
DU PONT(EI) DE NMR........................48.22 0.72 57.00 39.50
EXXON MOBIL....................................73.91 -0.21 88.23 58.05
GENERAL ELECTRIC.........................16.12 0.08 21.65 14.31
GOOGLE A........................................540.70 1.62 642.96 448.00
HEWLETT PACKARD.........................26.05 -0.07 49.39 22.75
HOME DEPOT.....................................33.57 -0.42 39.38 27.55
IBM.....................................................172.51 -0.11 185.63 122.28
INTEL CORP .......................................20.24 -0.06 26.78 17.60
J.P.MORGAN CHASE.........................37.06 -0.58 48.36 32.31
JOHNSON & JOHNSON.....................65.77 -0.09 68.05 56.99
KRAFT FOODS A................................34.71 0.14 36.30 24.30
MC DONALD'S CORP ........................90.78 -0.01 91.22 72.14
MERCK AND CO. NEW......................32.70 0.24 37.68 29.47
MICROSOFT........................................26.23 0.39 29.46 23.32
OCCID. PETROLEUM.........................86.10 1.04 117.89 72.47
ORACLE CORP...................................27.87 -0.04 36.50 21.66
PEPSICO.............................................64.52 0.36 71.89 60.10
PFIZER ................................................18.88 0.00 21.45 15.77
PHILIP MORRIS INTL .........................70.12 -0.38 72.74 50.65
PROCTER AND GAMBLE ..................63.50 0.41 67.72 56.57
QUALCOMM INC ................................51.24 0.32 59.84 37.81
SCHLUMBERGER ..............................77.33 0.08 95.64 52.91
TRAVELERS CIES..............................50.21 -0.54 64.17 46.62
UNITED TECHNOLOGIE ....................73.76 -0.11 91.83 64.67
UNITEDHEALTH GROUP...................47.28 0.52 53.50 31.42
VERIZON COMMS ..............................36.31 0.17 38.95 29.21
WAL-MART STORES..........................52.82 -0.37 57.90 48.31
WALT DISNEY CO ..............................33.58 0.42 44.34 29.60
WELLS FARGO & CO.........................25.40 -0.02 34.25 22.58
COMMODITIES CREDIT & RATES
BoE IR Overnight ............................0.500 0.00
BoE IR 7 days.................................0.500 0.00
BoE IR 1 month ..............................0.500 0.00
BoE IR 3 months ............................0.500 0.00
BoE IR 6 months ............................0.500 0.00
LIBOR Euro - overnight ..................0.836 0.00
LIBOR Euro - 12 months ................2.053 0.00
LIBOR USD - overnight...................0.143 0.00
LIBOR USD - 12 months.................0.798 0.00
HaIifax mortgage rate .....................3.990 0.00
Euro Base Rate ...............................1.500 0.00
Finance house base rate................1.000 0.00
US Fed funds...................................0.250 0.00
US Iong bond yieId .........................3.510 -0.11
European repo rate.........................0.783 0.00
Euro Euribor ....................................1.104 0.00
The vix index ...................................33.17 0.89
The baItic dry index ........................1.541 0.00
Markit iBoxx...................................228.63 -0.67
Markit iTraxx..................................163.22 -4.82
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
C/$ 1.4443 0.0072
C/ 0.8855 0.0012
C/ 110.75 0.7710
/C 1.1293 0.0013
/$ 1.6312 0.0103
/ 125.06 1.0993
FTSE 100
5268.66
138.74
FTSE 250
10243.15
246.05
FTSE ALLSHARE
2733.89
70.36
DOW
11559.95
20.70
NASDAQ
2576.11
14.00
S&P 500
1212.92
2.84
RPC Group . . . . . . . .310.0 -1.1 384.8 215.4
Smiths Group . . . . . .946.0 21.0 1429.0 907.5
Brown (N.) Group . . .262.0 0.1 311.2 223.9
Carpetright . . . . . . . . .507.5 -1.5 835.5 493.4
Debenhams . . . . . . . . .53.0 -1.6 77.4 52.2
Dignity . . . . . . . . . . . .763.0 6.5 833.0 633.0
Dixons RetaiI . . . . . . .12.0 0.4 28.5 11.4
DuneImGroup . . . . . .429.9 9.9 550.0 371.3
HaIfords Group . . . . .299.1 5.1 504.5 284.8
Home RetaiI Group . .122.5 0.1 235.0 118.1
Inchcape . . . . . . . . . .307.4 10.0 425.4 256.0
JD Sports Fashion . .825.0 -21.0 1030.0 726.0
Kesa EIectricaIs . . . .102.5 2.5 174.0 99.6
Kingfisher . . . . . . . . .231.0 7.3 287.1 204.5
Marks & Spencer G . .309.4 -0.4 427.5 307.1
Mothercare . . . . . . . .372.0 4.5 627.5 363.6
Next . . . . . . . . . . . . .2286.0 56.0 2426.0 1868.0
Sports Direct Int . . . .205.1 -1.0 266.2 104.3
WH Smith . . . . . . . . . .486.5 3.6 523.0 407.6
Smith & Nephew . . . .596.5 22.5 742.0 521.0
Synergy HeaIth . . . . .900.0 2.0 981.0 690.0
Barratt DeveIopme . . .78.9 6.1 119.0 67.5
BeIIway . . . . . . . . . . . .593.0 9.0 753.5 511.0
YuIe Catto & Co . . . . .175.0 3.6 253.0 139.7
BaIfour Beatty . . . . . .237.6 9.0 357.3 228.6
KeIIer Group . . . . . . .348.9 2.9 698.5 346.0
Kier Group . . . . . . . .1210.0 3.0 1418.0 990.0
Drax Group . . . . . . . .496.7 9.0 535.0 353.6
Scottish & Southe . .1272.0 35.0 1423.0 1108.0
Domino Printing S . .550.0 0.5 705.0 457.0
HaIma . . . . . . . . . . . . .335.0 0.7 429.6 273.0
Laird . . . . . . . . . . . . . .153.3 -2.5 207.0 125.5
Morgan CrucibIe C . .256.0 8.4 357.1 193.8
Renishaw . . . . . . . . .1274.0 52.0 1886.0 855.0
Spectris . . . . . . . . . .1381.0 36.0 1679.0 878.5
Aberforth SmaIIer . . .580.0 1.5 714.0 513.0
AIIiance Trust . . . . . .342.9 10.9 392.7 311.1
Bankers Inv Trust . . .369.0 3.0 428.0 360.0
BH GIobaI Ltd. GB .1152.0 6.0 1174.0 1058.0
BH GIobaI Ltd. US . . . .11.4 0.0 11.6 10.4
BH Macro Ltd. EUR . . .19.2 0.0 19.3 15.8
BH Macro Ltd. GBP 1970.0 -15.0 1987.0 1630.0
BH Macro Ltd. USD . . .19.0 -0.2 19.3 15.8
BIackRock WorId M .697.0 12.0 815.5 571.0
BIueCrest AIIBIue . . .168.9 0.7 176.2 162.4
British Assets Tr . . . .117.7 1.0 140.5 113.0
British Empire Se . . .464.0 4.0 533.0 430.0
CaIedonia Investm .1600.0 21.0 1928.0 1545.0
City of London In . . .270.5 5.2 306.9 254.4
Dexion AbsoIute L . .139.8 0.8 151.0 135.2
Edinburgh Dragon . .225.0 5.0 262.1 213.0
Edinburgh Inv Tru . . .453.2 7.6 492.2 399.0
EIectra Private E . . .1400.0 -24.0 1755.0 1289.0
F&C Inv Trust . . . . . .282.8 6.8 327.9 268.0
FideIity China Sp . . . . .86.0 1.8 128.7 80.0
FideIity European . .1050.0 13.0 1287.0 945.0
FideIity SpeciaI . . . . .479.0 3.0 595.0 469.0
HeraId Inv Trust . . . . .450.0 -2.9 545.5 383.5
HICL Infrastructu . . . .115.3 -0.4 121.3 112.0
Impax Environment . .99.3 -1.2 130.5 98.0
JPMorgan American .777.0 25.5 916.0 679.0
JPMorgan Asian In . .203.5 3.5 250.8 197.2
JPMorgan Emerging .528.0 15.5 639.0 499.3
JPMorgan European .761.5 -0.5 983.5 645.0
JPMorgan Indian I . . .371.0 13.5 502.0 354.8
JPMorgan Russian .510.0 -6.0 755.0 508.0
Law Debenture Cor . .333.3 -3.6 385.0 298.0
MercantiIe Inv Tr . . . .920.0 6.0 1137.0 895.0
Merchants Trust . . . .367.5 3.5 431.8 348.7
Monks Inv Trust . . . .332.2 4.2 367.9 295.9
Murray Income Tru . .607.8 6.8 673.0 568.0
Murray Internatio . . .883.5 9.5 991.5 824.0
PerpetuaI Income . . .250.0 4.4 276.0 220.0
PoIar Cap TechnoI . .313.5 2.5 391.2 278.0
RIT CapitaI Partn . . .1223.0 5.0 1334.0 1110.0
Scottish Inv Trus . . . .447.2 9.2 524.0 417.7
Scottish Mortgage . .667.0 23.0 781.0 568.0
SVG CapitaI . . . . . . . .243.2 -0.8 279.8 152.0
TempIe Bar Inv Tr . . .846.0 5.5 952.0 766.0
TempIeton Emergin .578.0 18.0 689.5 544.0
TR Property Inv T . . .169.4 2.4 206.1 143.6
TR Property Inv T . . . .77.4 1.5 94.0 65.0
Witan Inv Trust . . . . .446.1 7.1 533.0 428.0
3i Group . . . . . . . . . . .208.6 2.1 340.0 200.7
3i Infrastructure . . . .121.2 -0.2 125.2 112.9
Aberdeen Asset Ma .197.4 9.2 240.0 134.6
Ashmore Group . . . .384.5 21.0 414.5 289.6
Brewin DoIphin Ho . .130.9 -0.3 185.4 117.0
CameIIia . . . . . . . . . .9025.0 125.010950.0 8100.0
CharIes TayIor Co . . .133.8 -5.3 198.3 122.0
City of London Gr . . . .76.3 0.0 93.6 76.3
City of London In . . .378.0 19.0 461.5 278.5
CIose Brothers Gr . . .698.0 16.0 888.5 656.5
CoIIins Stewart H . . . .67.0 -1.0 90.8 67.0
EvoIution Group . . . . .90.0 3.8 92.0 62.3
F&C Asset Managem .65.8 -2.0 92.9 58.7
Hargreaves Lansdo .407.0 4.5 646.5 386.0
HeIphire Group . . . . . . .2.8 0.2 39.0 2.4
Henderson Group . . .131.1 4.5 173.1 119.1
Highway CapitaI . . . . .14.5 0.0 21.0 6.0
ICAP . . . . . . . . . . . . . .470.4 20.0 570.5 391.3
IG Group HoIdings . .440.9 7.1 553.0 393.6
Intermediate Capi . . .240.1 12.9 360.3 204.8
InternationaI Per . . . .257.4 22.6 388.8 228.0
InternationaI Pub . . . .115.1 -0.7 118.3 108.6
Investec . . . . . . . . . . .422.4 16.3 538.0 378.7
IP Group . . . . . . . . . . . .43.0 -1.5 54.5 27.9
Jupiter Fund Mana . .189.8 4.9 337.3 184.9
Liontrust Asset M . . . .77.5 1.0 95.3 72.0
LMS CapitaI . . . . . . . . .59.6 -0.9 64.8 41.5
London Finance & . . .21.5 0.0 23.5 16.5
London Stock Exch .885.0 36.5 1076.0 657.5
Lonrho . . . . . . . . . . . . .15.3 -0.3 19.8 10.5
Man Group . . . . . . . . .217.4 9.8 311.0 178.0
Paragon Group Of . .142.6 8.0 206.1 131.0
Provident Financi . .1104.0 39.0 1116.0 728.5
Rathbone Brothers .1044.0 22.0 1257.0 828.0
Record . . . . . . . . . . . . .29.5 0.4 52.0 20.3
RSM Tenon Group . . .28.0 0.0 66.3 21.3
Schroders . . . . . . . .1481.0 51.0 1922.0 1372.0
Schroders (Non-Vo .1196.0 36.0 1554.0 1106.0
TuIIett Prebon . . . . . .365.0 16.4 428.6 329.8
WaIker Crips Grou . . .49.0 0.0 51.5 45.0
BT Group . . . . . . . . . .163.8 2.8 204.1 133.2
CabIe & WireIess . . . .33.9 1.5 61.1 31.3
CabIe & WireIess . . . .34.3 -0.1 78.4 34.0
COLT Group SA . . . . .110.2 0.1 156.2 109.3
TaIkTaIk TeIecom . . .126.0 1.5 168.3 119.8
TeIecomPIus . . . . . . .671.0 11.0 700.0 364.5
Booker Group . . . . . . .67.6 0.4 77.9 44.3
Greggs . . . . . . . . . . . .489.9 8.0 550.5 429.1
Morrison (Wm) Sup .286.0 5.8 308.3 262.7
Ocado Group . . . . . . .115.0 1.4 285.0 113.6
Sainsbury (J) . . . . . . .292.7 0.7 395.0 280.4
Tesco . . . . . . . . . . . . .364.8 -0.8 440.7 359.6
Associated Britis . .1057.0 7.0 1182.0 940.0
Cranswick . . . . . . . . .613.5 -14.0 896.0 606.0
Dairy Crest Group . . .355.4 0.8 424.9 334.1
Devro . . . . . . . . . . . . .245.0 4.9 296.9 218.0
Premier Foods . . . . . . .12.9 0.2 35.1 12.7
Tate & LyIe . . . . . . . . .577.0 8.0 656.0 409.1
UniIever . . . . . . . . . .2025.0 11.0 2072.0 1722.0
Mondi . . . . . . . . . . . . .535.5 28.5 664.0 460.9
Centrica . . . . . . . . . . .297.4 1.6 346.1 287.3
InternationaI Pow . . .328.2 9.3 448.6 279.4
NationaI Grid . . . . . . .613.0 11.0 632.5 530.0
Northumbrian Wate .460.6 0.2 469.5 295.5
Pennon Group . . . . . .642.0 3.5 737.5 573.0
Severn Trent . . . . . .1444.0 15.0 1517.0 1295.0
United UtiIities . . . . .591.5 10.5 632.0 543.5
Cookson Group . . . . .496.0 18.5 724.5 419.2
DS Smith . . . . . . . . . .196.5 8.7 266.2 132.4
Rexam . . . . . . . . . . . .348.1 7.0 400.0 301.5
GIencore Internat . . .399.6 22.4 531.1 348.0
BAE Systems . . . . . .268.2 8.0 369.9 248.1
Chemring Group . . . .541.0 23.0 736.5 485.0
Cobham . . . . . . . . . . .184.9 4.8 245.6 173.4
Meggitt . . . . . . . . . . . .336.0 9.7 397.6 261.7
QinetiQ Group . . . . . .120.7 4.8 136.3 96.7
RoIIs-Royce Group . .617.0 13.5 665.0 554.0
Senior . . . . . . . . . . . . .151.0 3.2 190.6 111.2
UItra EIectronics . . .1413.0 28.0 1895.0 1305.0
GKN . . . . . . . . . . . . . .196.3 9.0 245.0 142.7
BarcIays . . . . . . . . . . .165.4 10.4 333.6 145.5
HSBC HoIdings . . . . .524.9 21.1 730.9 503.8
LIoyds Banking Gr . . .32.0 2.3 77.6 27.6
RoyaI Bank of Sco . . .23.6 1.8 50.2 19.7
Standard Chartere .1362.0 55.5 1950.0 1306.5
AG Barr . . . . . . . . . .1142.0 -32.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .303.2 7.9 503.5 289.9
Diageo . . . . . . . . . . .1205.0 13.0 1307.0 1059.0
SABMiIIer . . . . . . . . .2188.0 63.0 2340.0 1841.0
AZ EIectronic Mat . . .228.9 6.9 338.1 210.0
Croda Internation . .1745.0 33.0 2081.0 1277.0
EIementis . . . . . . . . . .145.5 5.1 187.4 86.5
Johnson Matthey . .1670.0 63.0 2119.0 1586.0
Victrex . . . . . . . . . . .1248.0 31.0 1590.0 1076.0
Price Chg High Low
BerkeIey Group Ho .1132.0 39.0 1299.0 789.5
Bovis Homes Group .369.5 18.5 464.7 326.5
Persimmon . . . . . . . .440.6 10.1 502.5 336.5
Reckitt Benckiser . .3198.0 -9.0 3648.0 3015.0
Redrow . . . . . . . . . . . .115.0 0.4 139.0 98.4
TayIor Wimpey . . . . . . .31.8 1.3 43.3 22.3
Bodycote . . . . . . . . . .275.0 9.6 397.7 221.4
Charter Internati . . . .747.0 17.0 853.5 538.5
Fenner . . . . . . . . . . . .340.2 20.3 422.5 203.7
IMI . . . . . . . . . . . . . . . .849.0 30.0 1119.0 674.5
MeIrose . . . . . . . . . . .306.6 10.6 365.4 235.5
Northgate . . . . . . . . . .270.0 2.3 346.7 183.5
Rotork . . . . . . . . . . .1667.0 71.0 1895.0 1501.0
Spirax-Sarco Engi . .1798.0 75.0 2063.0 1575.0
Weir Group . . . . . . .1856.0 128.0 2218.0 1159.0
Ferrexpo . . . . . . . . . . .363.8 16.8 499.0 289.5
TaIvivaara Mining . . .334.9 19.9 622.0 297.2
BBAAviation . . . . . . .160.8 3.0 240.8 156.0
Stobart Group Ltd . . .131.0 3.0 163.6 124.1
AdmiraI Group . . . . .1345.0 27.0 1754.0 1279.0
AmIin . . . . . . . . . . . . .304.9 7.6 427.0 295.0
Huntsworth . . . . . . . . .61.5 1.0 86.0 59.8
Informa . . . . . . . . . . . .339.5 14.4 461.1 325.1
ITE Group . . . . . . . . . .163.8 -0.1 258.2 152.0
ITV . . . . . . . . . . . . . . . . .59.8 1.9 93.5 54.2
Johnston Press . . . . . . .5.1 0.2 16.3 4.4
MecomGroup . . . . . .157.5 -2.5 310.0 155.0
Moneysupermarket. .109.0 0.6 120.4 71.5
Pearson . . . . . . . . . .1092.0 28.0 1207.0 926.0
PerformGroup . . . . .182.7 13.7 234.5 150.0
Reed EIsevier . . . . . .493.6 7.9 590.5 461.3
Rightmove . . . . . . . .1264.0 60.0 1269.0 619.0
STV Group . . . . . . . . .111.5 0.5 168.0 89.8
Tarsus Group . . . . . .142.5 2.5 165.0 112.5
Trinity Mirror . . . . . . . .43.5 -2.0 124.0 37.5
United Business M . .456.0 14.9 725.0 428.4
UTV Media . . . . . . . . .120.0 12.8 151.0 101.0
WiImington Group . . .90.0 0.0 183.0 90.0
WPP . . . . . . . . . . . . . .629.0 14.0 846.5 578.5
YeII Group . . . . . . . . . . .5.0 0.2 17.8 4.7
African Barrick G . . .543.0 -1.0 638.0 393.5
AngIo American . . .2483.0 147.5 3437.0 2234.0
AngIo Pacific Gro . . .296.4 6.5 369.3 253.5
Antofagasta . . . . . . .1282.0 74.0 1634.0 1024.0
Aquarius PIatinum . .255.1 14.8 419.0 216.9
BHP BiIIiton . . . . . . .2042.5 83.5 2631.5 1798.0
BeazIey . . . . . . . . . . . .113.8 2.8 139.2 109.6
CatIin Group Ltd. . . .364.0 14.1 421.4 325.0
Hiscox Ltd. . . . . . . . . .350.0 9.5 424.7 340.5
Jardine LIoyd Tho . . .641.0 7.5 709.0 561.0
Lancashire HoIdin . . .664.5 41.5 700.0 529.0
RSA Insurance Gro . .113.3 2.0 143.5 109.5
Aviva . . . . . . . . . . . . . .329.7 18.1 477.9 311.6
LegaI & GeneraI G . . .103.8 5.6 123.8 91.3
OId MutuaI . . . . . . . . .118.3 5.3 145.2 103.2
Phoenix Group HoI . .532.5 -1.0 758.0 458.0
PrudentiaI . . . . . . . . .598.0 25.0 777.0 565.5
ResoIution Ltd. . . . . .256.7 4.1 316.1 211.3
St James's PIace . . . .344.9 27.5 376.0 236.2
Standard Life . . . . . . .199.2 7.1 244.7 172.0
4Imprint Group . . . . .233.5 1.0 295.0 195.0
Aegis Group . . . . . . .132.8 0.7 163.5 111.7
BIoomsbury PubIis . . .99.5 -1.0 138.0 96.5
British Sky Broad . . .646.0 23.5 850.0 618.5
Centaur Media . . . . . . .39.1 -0.4 73.0 37.0
Chime Communicati .176.0 1.5 298.5 172.3
Creston . . . . . . . . . . . .88.0 -1.0 121.0 78.5
DaiIy MaiI and Ge . . .392.3 12.2 594.5 363.3
Euromoney Institu . .564.0 -11.5 736.0 564.0
Future . . . . . . . . . . . . . .12.0 0.3 30.0 11.8
Haynes PubIishing . .235.0 0.0 262.5 202.5
Centamin Egypt Lt . .105.5 2.0 197.1 89.7
Eurasian NaturaI . . .660.0 37.0 1125.0 585.5
FresniIIo . . . . . . . . . .1999.0 121.0 2039.0 1056.0
GemDiamonds Ltd. .202.4 5.4 306.0 179.8
HochschiId Mining . .493.3 28.0 680.0 332.0
Kazakhmys . . . . . . .1051.0 60.0 1671.0 918.0
Kenmare Resources . .46.0 3.2 59.9 17.2
Lonmin . . . . . . . . . . .1275.0 100.0 1983.0 1103.0
New WorId Resourc .593.0 25.5 1060.0 514.5
PetropavIovsk . . . . . .866.0 44.0 1252.0 676.0
RandgoId Resource 6470.0 130.0 6870.0 4425.0
Rio Tinto . . . . . . . . .3673.5 150.5 4712.0 3223.5
Vedanta Resources 1337.0 91.0 2559.0 1225.0
Xstrata . . . . . . . . . . .1025.5 45.8 1550.0 933.4
Inmarsat . . . . . . . . . . .461.3 10.3 724.5 389.7
Vodafone Group . . . .162.5 0.6 181.9 153.6
Genesis Emerging . .465.4 9.4 568.0 444.5
Afren . . . . . . . . . . . . . .101.2 5.7 171.2 92.5
BG Group . . . . . . . . .1275.0 44.5 1564.5 1049.5
BP . . . . . . . . . . . . . . . .397.6 11.3 509.0 379.7
Cairn Energy . . . . . . .316.7 17.2 472.3 281.4
EnQuest . . . . . . . . . . .110.0 2.7 158.5 98.0
Essar Energy . . . . . .254.9 9.5 589.5 245.4
ExiIIon Energy . . . . . .258.5 -11.1 469.7 172.0
Heritage OiI . . . . . . . .222.0 15.0 486.0 190.0
JKX OiI & Gas . . . . . .196.5 5.7 335.1 187.4
Premier OiI . . . . . . . . .325.3 8.8 535.0 316.0
RoyaI Dutch SheII . .2005.0 50.0 2326.5 1733.0
RoyaI Dutch SheII . .2020.5 63.0 2336.0 1668.5
SaIamander Energy .227.8 2.1 317.6 210.0
Soco Internationa . . .317.0 9.3 484.2 279.8
TuIIow OiI . . . . . . . . .1026.0 26.5 1493.0 945.5
Amec . . . . . . . . . . . . .878.0 28.5 1251.0 834.0
Hunting . . . . . . . . . . .666.5 11.0 817.0 592.5
John Wood Group . .576.0 31.0 715.8 368.4
LampreII . . . . . . . . . . .297.7 25.7 395.2 234.4
Petrofac Ltd. . . . . . .1298.0 71.0 1685.0 1110.0
Burberry Group . . . .1322.0 65.0 1600.0 846.5
PZ Cussons . . . . . . . .348.7 7.8 409.0 320.5
Supergroup . . . . . . . .964.0 80.5 1820.0 818.5
AstraZeneca . . . . . .2865.0 53.5 3385.0 2543.5
BTG . . . . . . . . . . . . . .251.8 -0.2 309.7 200.1
Genus . . . . . . . . . . . . .890.0 13.0 1046.0 711.0
GIaxoSmithKIine . . .1286.5 -2.5 1385.0 1127.5
Hikma Pharmaceuti .600.0 -5.0 900.0 561.5
Shire PIc . . . . . . . . . .1932.0 11.0 2136.0 1402.0
CapitaI & Countie . . .165.4 6.0 203.7 116.0
Daejan HoIdings . . .2500.0 -41.0 2954.0 2282.0
F&C CommerciaI Pr .102.4 0.0 108.0 88.0
Grainger . . . . . . . . . . .102.0 3.0 133.2 86.3
London & Stamford .116.0 0.2 140.0 110.3
SaviIIs . . . . . . . . . . . . .309.7 -0.3 427.1 296.6
St. Modwen Proper . .130.1 1.6 196.2 127.9
UK CommerciaI Pro . .79.3 -0.1 85.5 70.4
Unite Group . . . . . . . .172.5 4.6 229.8 152.9
Big YeIIow Group . . .250.1 15.9 353.3 234.2
British Land Co . . . . .544.0 20.0 629.5 454.6
CapitaI Shopping . . .332.5 14.7 424.8 312.5
Derwent London . . .1550.0 30.0 1880.0 1410.0
Great PortIand Es . . .355.6 6.8 445.0 316.3
Hammerson . . . . . . . .406.3 17.9 490.9 358.9
Hansteen HoIdings . . .81.7 2.2 89.5 62.4
Land Securities G . . .728.0 23.0 885.0 611.5
SEGRO . . . . . . . . . . . .254.4 6.8 331.3 232.4
Shaftesbury . . . . . . . .469.4 11.0 539.0 417.0
Autonomy Corporat 2512.0 3.0 2525.0 1271.0
Aveva Group . . . . . .1499.0 6.0 1799.0 1385.0
Computacenter . . . . .374.1 4.6 490.0 279.0
Fidessa Group . . . . .1574.0 36.0 2109.0 1350.0
Invensys . . . . . . . . . . .259.1 7.8 364.3 221.7
Kofax . . . . . . . . . . . . .330.0 -0.2 535.0 231.0
Logica . . . . . . . . . . . . .83.1 1.8 147.2 80.3
Micro Focus Inter . . .299.0 5.8 426.2 239.4
Misys . . . . . . . . . . . . .275.7 7.7 420.2 234.7
Sage Group . . . . . . . .246.8 3.7 302.0 231.7
SDL . . . . . . . . . . . . . . .637.5 -1.0 711.5 545.0
TeIecity Group . . . . . .541.0 11.0 559.5 430.0
Aggreko . . . . . . . . . .1865.0 67.0 2034.0 1394.5
Ashtead Group . . . . .105.0 4.7 207.9 77.0
Atkins (WS) . . . . . . . .531.0 14.0 820.0 513.5
Babcock Internati . . .615.0 15.0 733.0 504.0
Berendsen . . . . . . . . .492.0 2.8 568.0 373.0
BunzI . . . . . . . . . . . . .779.0 57.0 801.0 676.5
Capita Group . . . . . . .704.5 17.0 794.5 635.5
CariIIion . . . . . . . . . . .330.3 7.2 403.2 298.8
De La Rue . . . . . . . . .794.0 13.5 853.5 549.5
EIectrocomponents .206.5 5.9 294.9 190.0
Experian . . . . . . . . . . .679.0 10.5 833.5 621.5
FiItrona PLC . . . . . . . .351.6 16.6 385.5 227.5
G4S . . . . . . . . . . . . . . .259.9 -0.3 291.0 237.7
Hays . . . . . . . . . . . . . . .74.4 2.0 133.6 69.4
Homeserve . . . . . . . .447.4 2.4 532.0 408.0
Howden Joinery Gr . . .96.8 2.9 127.5 63.0
Intertek Group . . . . .1981.0 62.0 2148.0 1682.0
MichaeI Page Inte . . .372.9 11.1 567.0 350.7
Mitie Group . . . . . . . .215.2 6.5 242.5 191.2
Premier FarneII . . . . .177.0 3.6 308.8 168.4
Regus . . . . . . . . . . . . . .67.0 3.0 119.0 64.0
RentokiI InitiaI . . . . . . .79.4 3.2 107.1 74.5
RPS Group . . . . . . . . .194.0 0.7 253.0 169.9
Serco Group . . . . . . .505.0 13.1 633.0 491.9
Shanks Group . . . . . .114.4 1.6 130.9 97.5
SIG . . . . . . . . . . . . . . . .99.3 2.3 153.5 93.2
SThree . . . . . . . . . . . .243.4 -1.3 447.6 231.1
Travis Perkins . . . . . .792.5 33.0 1127.0 723.5
WoIseIey . . . . . . . . .1526.0 67.0 2261.0 1258.0
ARM HoIdings . . . . . .545.0 12.0 651.0 337.8
CSR . . . . . . . . . . . . . .220.5 2.5 447.0 218.0
Imagination Techn . .340.3 -0.1 502.0 296.9
Pace . . . . . . . . . . . . . .101.9 1.6 231.8 91.0
Spirent Communica .120.5 0.4 160.3 116.0
British American . .2724.0 26.5 2871.0 2216.0
ImperiaI Tobacco . .2004.0 -1.0 2231.0 1784.0
Avis Europe . . . . . . . .313.2 -0.6 313.9 184.0
Betfair Group . . . . . . .604.0 7.0 1550.0 567.0
Bwin.party Digita . . . .110.0 7.4 297.9 100.6
CarnivaI . . . . . . . . . .1959.0 122.0 3153.0 1742.0
Compass Group . . . .543.5 9.0 612.0 511.5
Domino's Pizza UK . .492.1 0.1 586.0 377.0
easyJet . . . . . . . . . . . .337.8 13.5 479.0 301.0
Enterprise Inns . . . . . .39.0 0.9 122.7 38.0
FirstGroup . . . . . . . . .354.0 1.0 412.6 311.3
Go-Ahead Group . . .1519.0 59.0 1598.0 1085.0
Greene King . . . . . . .438.3 12.5 518.0 410.0
InterContinentaI . . .1023.0 50.5 1435.0 955.0
InternationaI Con . . .170.0 6.6 305.0 163.4
JD Wetherspoon . . . .406.0 6.6 468.3 389.9
Ladbrokes . . . . . . . . .122.6 0.3 155.3 120.3
Marston's . . . . . . . . . . .93.2 1.2 117.1 87.1
MiIIennium& Copt . .417.5 8.2 600.5 408.4
MitcheIIs & ButIe . . . .229.0 4.8 361.0 224.2
NationaI Express . . .234.4 3.7 270.2 220.7
Rank Group . . . . . . . .131.0 1.0 153.7 107.3
Restaurant Group . . .279.8 9.5 335.0 241.1
Spirit Pub Compan . . .41.5 -0.5 55.0 37.0
Stagecoach Group . .256.2 -0.7 268.5 172.2
Thomas Cook Group .44.0 0.7 204.8 43.3
TUI TraveI . . . . . . . . . .154.4 4.7 271.9 147.8
Whitbread . . . . . . . .1485.0 41.0 1887.0 1396.0
WiIIiamHiII . . . . . . . . .217.2 2.8 237.3 155.5
Abcam . . . . . . . . . . . .376.8 44.0 460.0 307.0
AIbemarIe & Bond . .367.4 -8.6 400.1 237.0
Amerisur Resource . .16.5 -0.3 29.0 11.5
Andor TechnoIogy . .545.0 5.0 685.0 311.0
ArchipeIago Resou . . .78.0 0.0 79.0 32.3
ASOS . . . . . . . . . . . .1913.0 87.0 2468.0 937.5
AureIian OiI & Ga . . . .45.0 -0.5 92.0 42.5
Avanti Communicat .318.8 8.3 735.0 288.8
Avocet Mining . . . . . .261.8 8.8 263.0 115.0
BIinkx . . . . . . . . . . . . .113.8 8.8 148.8 70.5
Borders & Souther . . .49.0 1.8 93.0 44.8
BowLeven . . . . . . . . .123.3 4.0 398.0 115.3
Brooks MacdonaId 1030.0 30.0 1372.5 907.5
Conygar Investmen . .98.0 2.0 120.0 95.0
Cove Energy . . . . . . . .67.0 2.5 112.8 58.5
Daisy Group . . . . . . . .111.5 2.3 127.0 88.0
EMIS Group . . . . . . . .547.5 0.0 580.0 303.5
Encore OiI . . . . . . . . . .45.3 0.3 151.5 40.8
Faroe PetroIeum . . . .158.0 3.5 218.3 133.0
GuIfsands PetroIe . . .151.8 0.3 401.5 142.5
GWPharmaceuticaI .103.6 2.6 130.0 83.0
Hamworthy . . . . . . . .526.0 18.0 705.0 334.3
Hargreaves Servic . .900.0 18.0 1076.0 612.0
HeaIthcare Locums . .84.6 0.0 84.6 84.6
Immunodiagnostic .1065.0 21.0 1218.0 730.0
ImpeIIamGroup . . . .316.6 16.6 387.5 125.0
James HaIstead . . . . .450.0 5.0 495.0 315.0
KaIahari MineraIs . . .237.0 5.0 301.0 142.0
London Mining . . . . .317.5 5.5 436.5 249.0
Lupus CapitaI . . . . . . .91.3 5.3 150.0 80.0
M. P. Evans Group . .410.5 4.0 500.5 365.0
Majestic Wine . . . . . .415.0 -1.0 510.0 309.0
May Gurney Integr . .258.5 15.3 295.0 177.0
Monitise . . . . . . . . . . . .34.0 1.0 39.0 18.5
MuIberry Group . . . .1529.0 89.0 1920.0 340.0
Nanoco Group . . . . . . .62.8 0.4 115.8 57.5
NauticaI PetroIeu . . .243.0 8.0 547.0 151.0
NichoIs . . . . . . . . . . . .520.0 2.0 579.0 410.0
Numis Corporation . . .95.5 3.5 146.5 89.0
Pan African Resou . . .13.3 0.8 13.8 6.3
Patagonia GoId . . . . . .59.0 3.3 68.0 15.3
Prezzo . . . . . . . . . . . . .58.1 -0.4 71.5 45.0
Pursuit Dynamics . . .212.8 14.8 700.0 160.5
Rockhopper ExpIor .215.8 1.5 510.0 141.0
RWS HoIdings . . . . . .430.0 14.0 479.8 255.0
Songbird Estates . . .118.0 -0.5 160.3 110.3
VaIiant PetroIeum . . .485.3 0.3 761.5 485.0
Young & Co's Brew . .652.5 12.5 712.0 525.0
InternationaI Pers . . .257.4 9.6
LampreII . . . . . . . . . . .297.7 9.5
Supergroup . . . . . . . .964.0 9.1
St James's PIace . . . .344.9 8.7
Lonmin . . . . . . . . . . .1275.0 8.5
Barratt DeveIopmen . .78.9 8.3
Perform Group . . . . .182.7 8.1
RoyaI Bank of Scot . . .23.6 8.0
BunzI . . . . . . . . . . . . .779.0 7.9
LIoyds Banking Gro . .32.0 7.8
ExiIIon Energy . . . . . .258.5 -4.1
F&C Asset Manageme 65.8 -2.9
Debenhams . . . . . . . . .53.0 -2.8
AG Barr . . . . . . . . . .1142.0 -2.7
JD Sports Fashion . .825.0 -2.5
Cranswick . . . . . . . . .613.5 -2.2
Euromoney Institut . .564.0 -2.0
EIectra Private Eq . .1400.0 -1.7
Daejan HoIdings . . .2500.0 -1.6
Laird . . . . . . . . . . . . . .153.3 -1.6
Risers FaIIers
MAIN CHANGES UK 350
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 Price Chg High Low
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AEROSPACE & DEFENCE
CONSTRUCTION & MATERIALS
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FORESTRY & PAPER
GAS, WATER & MULTIUTILITIES
GENERAL RETAILERS
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INDUSTRIAL ENGINEERING
INDUSTRIAL TRANSPORTATION
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REAL ESTATE INVEST. & SERV.
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AUTOMOBILES & PARTS
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MINING
NONEQUITY INVESTM. COMM.
Tsy 3.250 11 . . . . .100.76 -0.14 103.4 100.6
Tsy 5.250 12 . . . .103.62 0.01 108.0 103.6
Tsy 9.000 12 . . . .107.77 0.00 115.6 106.7
Tsy 5.000 12 . . . .102.34 -0.03 106.6 102.3
Tsy 4.500 13 . . . .105.97 0.07 109.1 105.8
Tsy 2.500 13 . . . .285.18 0.09 287.7 277.5
Tsy 8.000 13 . . . . .115.25 0.08 121.2 115.1
Tsy 5.000 14 . . . . .112.12 0.07 114.1 109.2
Tsy 7.750 15 . . . .102.86 -0.55 342.1 102.3
Tsy 4.750 15 . . . . .114.00 0.09 114.8 108.6
Tsy 8.000 15 . . . .128.18 0.07 131.4 123.7
Tsy 2.500 16 . . . .337.09 0.15 340.9 310.2
Tsy 4.000 16 . . . . .112.15 0.07 113.1 104.9
Tsy 1.250 17 . . . . .112.77 0.10 115.0 106.7
Tsy 8.750 17 . . . .140.05 -0.31 142.2 132.9
Tsy 12.000 17 . . .125.51 0.00 185.9 124.8
Tsy 5.000 18 . . . . .119.14 -0.02 120.8 109.7
Tsy 4.500 19 . . . . .116.40 -0.02 118.2 105.4
Tsy 3.750 19 . . . . .110.71 -0.04 112.5 99.4
Tsy 2.500 20 . . . .346.97 0.02 355.6 312.4
Tsy 4.750 20 . . . . .118.16 -0.14 120.2 106.6
Tsy 8.000 21 . . . .148.19 0.19 150.2 133.8
Tsy 1.875 22 . . . . .119.69 0.23 122.8 111.3
Tsy 4.000 22 . . . . .110.78 0.05 112.8 99.0
Tsy 2.500 24 . . . .306.87 0.23 316.1 273.5
Tsy 5.000 25 . . . .120.42 0.00 122.8 107.4
Tsy 1.250 27 . . . . .114.76 -0.13 118.3 104.6
Tsy 4.250 27 . . . . .110.63 -0.24 112.6 97.9
Tsy 6.000 28 . . . .134.16 -0.25 136.4 119.5
Tsy 4.125 30 . . . .293.21 -0.15 299.8 261.2
Tsy 4.750 30 . . . . .116.99 -0.37 118.3 103.0
Tsy 4.250 32 . . . .109.61 -0.39 110.9 96.0
Tsy 4.250 36 . . . .108.62 -0.42 109.7 95.0
Tsy 4.750 38 . . . . .117.37 -0.46 118.8 102.8
Tsy 4.500 42 . . . . .113.16 0.00 114.3 98.9
% %
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Markets &Investment
22 CITYA.M. 31 AUGUST 2011
Lifestyle | Motoring
23
WORDS BY
RYAN BORROFF
than a trip from London to the Lizard
Peninsula and around Cornwall and back
on just two tanks of fuel. Its a wonderful
feeling. This car is big, green and clean. Its
an automotive cuddle.
MERCEDES TO REVEAL NEW B-CLASS
Mercedes-Benz will reveal its new B-Class model ahead of the
Frankfurt motor show. The compact MPV sports tourer has been
reworked to increase interior space and better economy. The car
also features a new seven-speed, dual-clutch transmission and a
radar-based collision warning system as standard. Well get it here
in March 2012.
CAR TALK BY RYAN BORROFF
HYBRID A8
Audi is to launch a hybrid version of its luxurious A8 saloon that
combines a 2.0-litre, four-cylinder TFSI petrol engine with an elec-
tric motor to produce 245PS. The car will be able to run in all-elec-
tric, zero emission mode up to 62mph and fuel economy should be
above 44mpg and CO2 output below sub-148g/km. On sale late
next year.
BENTLEYS CONTINENTAL
Bentley has released the first images of its new Continental GTC
ahead of its Frankfurt motor show introduction. The second gener-
ation GTC is sportier than its predecessor; is lighter in weight, has a
wider track and engine power is increased too. A new six-speed
transmission means gear shifting times have been halved and the
0-60mph time is now 4.5 secs.
Volvo at its heart-warming best
Just because its Volvo doesnt mean its dull to drive.
T
HE current Volvo V70 is the descen-
dant of the big, cumbersome boxy
Volvo estates of my childhood.
Which is one reason why Im keen
to test this DRIVe model, the most eco-
friendly version of Volvos big estate. The
engine capacity is just 1.6 litres albeit a
115PS turbodiesel so I dont expect
much excitement. In fact, I dont even
expect to be impressed. Im expecting the
dullest holiday journey to Cornwall of
my entire life. And Ive been going there
since before I could walk.
The most surprising thing about driv-
ing the V70 DRIVe is that it doesnt feel
slow. It doesnt feel like a big load-lugger
with compromised performance in order
to squeeze every last drop of economy
out of it. In fact, on the motorway, in the
outside lane and with the cruise control
on, youll struggle to remember youre
driving a big car with such a small
engine.
Thats not to say its quick. It isnt. But
despite 0-60mph figures of just 11 sec-
onds, the V70 DRIVe never seems to run
out of puff. It does take its time getting
up to speed but it is never breathless.
Amazing. Really.
Its comfortable, its capable and its
very economical. Volvo claims combined
mileage of more than 60mpg. We dont
achieve that but we do achieve 42mpg.
Which, considering the car is packed to
the gills with people and their stuff, is
quite an achievement. There were five of
us including a toddler in her big, cumber-
some car seat. And you could not have
got a cigarette paper between any two
items in the boot. When we arrived to
our Landmark Trust cottage in
Frenchmans Creek, even the car exhaled
with relief. No backache, no car sickness
and not one single stop for fuel. In fact,
not a word of complaint from anyone.
And I was with old people. My parents.
Volvos engineers have made some intel-
ligent choices when it comes to optimis-
ing the car for economical and cleaner
driving. The V70 DRIVe has a more aero-
dynamic front bumper and grille, low-
ered suspension, low rolling resistance
tyres, stop/start technology and longer
Big, clean and green,
youre sure to do your
family proud in this
attractive load-lugger
THE VERDICT:
DESIGN hhhii
PERFORMANCE hhhhi
PRACTICALITY hhhhi
VALUE FOR MONEY hhhhi
THE FACTS: PEUGEOT BIPPER
TEPEE OUTDOOR CAR
PRICE: 27,995
0-62MPH: 11secs
TOP SPEED: 118mph
CO2 G/KM: 119g/km
MPG COMBINED: 62.8mpg
gearing all to increase economy.
Otherwise the car is a conventional V70
Volvo. No one does straightforward prac-
ticality quite like the Swedes, which is
why its not exactly ostentatious on the
inside. But the seats are huge as is the
legroom and the instrumentation func-
tional and simple to use (except the
remote for the infotainment system
which I am sure must remain unused in
70 per cent of Volvos its certainly unnec-
essary). The car rides well and the interior
is very spacious, in the rear as well as in
the front. And then there is its safety fea-
tures. Of which there are many. Quicker to
say it just has everything you need.
Handling-wise its no sports car but that is
also somehow part of its appeal. Its
more heart warming than heart racing.
If you think you need a big, practical
load lugger to move your family around
in, then it may be worth considering the
V70 DRIVe. There is nothing more smug
T
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18 9
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45
9 7 23
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30 12
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16
11
25
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33
17
22
23
14
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34
10
3
21
38
9
29
35
17
5
4
Fill the grid so that each block
adds up to the total in the box
above or to the left of it.
You can only use the digits 1-9
and you must not use the
same digit twice in a block.
The same digit may occur
more than once in a row or
column, but it must be in a
separate block.
COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUES
SOLUTIONS
KAKURO
WORDWHEEL
Using only the letters in the Wordwheel, you have
ten minutes to nd as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
SUDOKU
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
from 1 to 9 to solve this tricky Sudoku puzzle.
SUDOKU
QUICK CROSSWORD
ACROSS
3 Person given to
excessive complaints
and whining (3,4)
6 Find repugnant (5)
8 Servilely or fulsomely
attering (9)
9 Popular game played
with pieces of
stifened paper (5)
10 Beat the seeds out
of grain (6)
13 Uproar, disturbance
of the peace (4)
16 Estimate the value (4)
18 Trousers that end
above the knee (6)
20 Colouring medium (5)
22 Ancient region between
the Mediterranean and
the Jordan River (9)
23 Skeptic (5)
24 In a perfect way (7)
DOWN
1 Malignant growth
or tumour (6)
2 Ancient Egyptian
king (7)
3 Outer layer on
bread (5)
4 Swimmer (6)
5 Beetroot soup (6)
7 Not divisible by two (3)
11 Strike (3)
12 Most noticeable or
important (7)
14 Ground surrounded
by water (6)
15 Capital of the US
state of Kansas (6)
17 Beguile (6)
19 Producing a burning
sensation on the
taste nerves (5)
21 None in particular (3)
I
C
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E
N N
A
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4

4


D E S T R U C T I O N
I P E L N O
S C A M S E L F I N
C C O T E R I E P
O M E N S K A R M A
U K I R
R E S E T A S S E T
A E Y E B R O W I
G O O S E G N A T S
E U M U P A
S A L E S P E R S O N
2 1 2 4 5 4
9 7 3 6 8 5 3 1
9 7 1 5 4 2
6 2 4 8 3 9 7
1 5 1 4 8 9 5
2 4 8 3 9 5 7 6 1
3 8 9 6 3 8 2
2 6 3 7 4 8 1
2 3 5 1 1 7
8 9 6 5 2 9 7 8
1 7 8 7 1 6
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
PINSTRIPE
Lifestyle | TV&Games
CITYA.M. 31 AUGUST 2011 24
Results
WORLD No1 Novak Djokovic insists
Britains Andy Murray is capable of
preventing him from claiming his
third grand slam title of the year at
the US Open.
The British star begins his cam-
paign today against Indias Somdev
Devaarman having become only the
second man to beat Djokovic this sea-
son in the final of the Cincinnati
Masters two weeks ago.
On that occasion
Murray (below),
who was destroyed
by the Serbian in
the final of the
Australian Open
at the begin-
ning of the
year, benefited
from a shoul-
der injury
which forced
the all con-
quering world
No1 to retire hurt.
Djokovic, who reported fit for duty
in New York, believes Murray is close
to breaking his grand slam duck.
We are all fully aware of his poten-
tial and we are all fully aware that he
has great talent.
There are some things that he just
needs to get together mentally. He
has proven that he can win against
anybody on any surface.
Roger Federer, a five-time winner
at Flushing Meadows, was a first
round winner on Monday night and
still believes he
possesses the
game to com-
pete with the
elite despite a dif-
ficult year.
He said: I have
always looked in the
long term.
I have never been chasing
stuff around since I turned world
No1 seven years ago. Im confi-
dent I can still play for many
more years to come at the high-
est of levels.
Murray poses
major threat,
says Djokovic
BY JAMES GOLDMAN
TENNIS

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email sport@cityam.com
CONOR KO: NOVAK THROUGH IN 44 MINUTES
NOVAK DJOKOVIC spent just 44 minutes securing his place in round two of the US Open
as Irelands Conor Niland was forced to retire because of illness. Niland went onto court
apparently suffering with food poisoning. And when Djokovic went 6-0 5-1 up, a clearly
struggling Niland admitted defeat. Picture: PA
SPORT | IN BRIEF
Vick signs $100m Eagles deal
NFL: Former Atlanta Falcons quarter-
back Michael Vick has penned a money-
spinning contract with the Philadelphia
Eagles that will see him earn $100m
over the course of the next six years.
The deal represents a remarkable
return to the limelight for the 31-year-
old, who signed a deal worth $130m
with the Atlanta Falcons back in 2005,
but his conviction and imprisonment for
dog-fighting saw him lose that and
later file for bankruptcy.
Cleverly confirms Bellew bout
BOXING: WBO light-heavyweight
champion Nathan Cleverly will make
the second defence of his title against
Tony Bellew in Liverpool on 15 October.
Promoter Frank Warren hopes the win-
ner of the all-British contest will go on
to face legendary veteran American
fighter Bernard Hopkins in a unification
clash. Bellew was in line to face
Cleverly in May as a late replacement
after previous champion Juergen
Braehmer withdrew. But the 28-year-
old failed to make the weight after
Bellew clashed with Cleverly in a pre-
fight press conference.
Sport
25 CITYA.M. 31 AUGUST 2011
TEEN sensation Laura Robson intends
to provide the British womens game
with another shot in the arm at the
US Open when she locks horns with
30th seed Anabel Medina Garrigues.
The 17-year-old, along with Heather
Watson, who pushed Maria
Sharapova to the brink in their epic
first round clash on Monday, look set
to provide Britain with two genuine
grand slam contenders in the future.
Robson benefited from the retire-
ment of Japans Ayumi Morita on
Monday, and claims shes not done
yet ahead of her second round clash
with the Spaniard Garrigues.
Having played three matches
already in qualifying on these courts,
I know how they play and how the
balls play, she said.
It makes it easier for me because
all the main draw players wont have
played a match on these courts
already.
TENNIS

HEAD-TO-HEAD | BRITAINS BRIGHTEST FEMALE TENNIS TALENTS

Heather Watson
Born in Guernsey,
Watson, 19, is
ranked the third
best female tennis
player in Britain.
Aged 12, Watson
left home to join
the famed Nick
Bollettieri Tennis
Academy in Florida.
Watson won the
2009 girls US Open
and claimed gold at
the 2008
Commonwealth
Youth Games.
Laura Robson
Born in Melbourne,
Robson moved to
Singapore aged six
and was soon iden-
tified as a child
prodigy. She signed
a deal with Adidas
aged 11 and turned
pro in 2008 after
winning a string of
junior titles includ-
ing Wimbledon
three years ago.
She is currently
ranked 173rd in the
world.
Robson and Watson provide hope
of a glittering grand slam future
Sport
26
BRITAINS wait for a first World
Championship gold medal in Daegu
will stretch into a fourth day after
London 2012 poster girl Jessica Ennis
surrendered her heptathlon crown to
Russias Tatyana Chernova.
The Sheffield-born athlete held a
151-point advantage over Chernova
heading into the second day of com-
petition, but a disappointing perform-
ance in the javelin meant she went
into the 800m, the final discipline,
needing to beat her rival by nine sec-
onds.
Ultimately, the 25-year-old (right)
could only manage victory by under a
second and despite the disappoint-
ment of failing to become the first
British women to defend a world title,
Ennis remains upbeat with less than a
year to go until the Olympics.
Im going to work hard at all the
events and make sure Im strong next
year. Ive evaluated it and Im not too
disappointed, she said.
Javelin has been one of my weaker
events but Ive never performed that
poorly. But its not something Im
going to overanalyse.
I have been in a few heptathlons
now and they have ended up going in
very different ways I was leading in
Berlin from start to finish and now
here. It has been a massive learning
curve.
I knew it would be very, very diffi-
cult. I was being realistic but I had to
give it everything and leave every-
thing on the track.
There were mixed fortunes else-
where for the Brits as Dai Greene qual-
ified impressively for the final of the
400m hurdles, while Helen Clitheroe
and Hannah England advanced to the
finals of the 5,000m and 1,500m, but
Tom Parsons and Martyn Bernard
both disappointed in qualifying
for the high jump.
Greene, who won his semi-
final and qualified second
fastest, said: I know in the final
Ill have the confidence. I
hope that sends a mes-
sage to the others.
M e a n w h i l e ,
Kenyas David
Rudisha kept his
two-year unbeat-
en record intact
to claim victory in
the 800m and his
countrys eighth gold in
Korea so far.
The 22-year-old under-
lined his status as one of
the athletes likely to be a
star attraction next sum-
mer in London by leading
from start to finish and
beating Sudans Abubaker Kaki into
second.
There was a shock, however, in
the womens pole vault as Russias
two-time Olympic and world cham-
pion Yelena Isinbayeva finished
only sixth, with Brazils
Fabiana Murer taking
gold after clearing
4.85m.
There was bet-
ter news for
Russia in the
womens 3,000m
steeplechase as
Yuliya Zarudneva
took her countrys
eighth gold of the week,
while there was further suc-
cess for European athletes in
the shape of Germanys
Robert Harting, who secured
gold in the mens discuss
with a throw of 68.97m.
Britains golden girl Ennis settles for silver
BY JAMES GOLDMAN
ATHLETICS

ENGLAND Twenty20 captain Stuart

Broad believes the exciting young tal-
ent at his disposal will help reinstate
his side as a genuine force in the
shortest format of the game.
The reigning World Twenty20
champions lost by nine wickets
against Sri Lanka earlier this summer
on Broads debut as skipper.
The selectors have reacted by call-
ing up uncapped trio Jos Buttler, Ben
Stokes and Alex Hales in their 13-man
squad ahead of todays clash against
India at Old Trafford, and Broad
would have no problems pitching
them all into the heat of battle.
Ive seen them on television in the
hotels when travelling around, so I
am well aware of what they can do,
he said. What has shone about Jos
Buttler is he can calmly flick the ball
over the keepers head and next ball
hit it straight 20 rows back.
He showed his talent on Twenty20
Finals day on Saturday.
Stokesy is a strong guy, a big hitter
of the ball. He certainly showed his
power in training, while I know Alex
well from Notts. Hes a tall guy who
can strike the ball very hard.
Broad backs
Englands
youngsters
CRICKET

Hargreaves had a
medical at City yesterday
Picture: ACTION IMAGES
MEGA wealthy Manchester City
caused the biggest stir on the penul-
timate day of the transfer window
without even spending a penny after
they agreed a deal to bring free agent
Owen Hargreaves to the Etihad
Stadium.
The England international mid-
fielder joined Manchester United in
the summer of 2007, but a series of
knee injuries restricted him to just
26 starts in four years at the Old
Trafford club.
The 30-year-old managed just 10
minutes on his comeback appear-
ance last November before breaking
down with a hamstring injury.
United opted not to renew his con-
tract and the former Champions
League winner with Bayern Munich
resorted to proving his fitness in a
series of videos posted on YouTube in
a bid to attract an offer from a
Premier League club.
Keen to bolster his midfield
options, City boss Roberto Mancini is
set to offer Hargreaves a pay-as-you-
play incentivised deal after he under-
went a medical yesterday.
Arsenal look set to be the most
active club today with a number of
deals expected to be rubber stamped.
Korea striker Chu Young Park arrived
from Monaco yesterday and he is set
to be joined by highly experienced
Germany international centre-half
Per Mertesacker, who underwent a
medical last night ahead of a 9m
move, and Fenerbahces Brazil left-
back Andre Santos.
The Gunners are also set to test
Rennes resolve with a club record
bid of 25m for France midfielder
Yann MVila and are locked in a bat-
tle with Spurs for England centre-
half Gary Cahill.
Spurs are ready to offer Cameroon
international Sebastien Bassong in
part exchange, while Arsenal have
cooled interest with the Trotters
refusing to significantly lower their
17m valuation of the player.
Tottenham manager Harry
Redknapp, meanwhile, confirmed
he expected to conclude a deal
for West Ham midfielder Scott
Parker, hours before the east
London club revealed the England
midfielder had submitted a formal
transfer request.
Redknapp could look to generate
extra funds by offloading striker
Peter Crouch to Sunderland for
10m and midfielder Wilson
Palacios to Stoke as he attempts to
make a late bid to persuade Joe Cole,
who yesterday held talks with
French champions Lille, to join him
at White Hart Lane.
Hargreaves in
shock switch
as deadline
chaos looms
BY JAMES GOLDMAN
FOOTBALL

Youngster James
stuns the world
with 400m victory
GRENADAS 18-year-old Kirani James
became the third youngest world
champion of all-time after he stunned
defending champion LaShawn Merritt
to win the mens 400m.
The American, who has only just
returned from a 21-month doping ban,
looked set to defend his title having
opened up a sizeable gap heading into
the home straight.
But James, with only a handful of
senior race experience under his belt,
produced a stunning finish to pip
Merritt on the line and record a per-
sonal best of 44.60.
I dont think this will change me
one bit but it just shows Im on the
right track. Im comfortable in my own
skin and I dont need to be called the
Usain Bolt of the 400 metres, he said.
England captain Broad may hand debuts to
three youngsters Picture: ACTION IMAGES
l Mertesacker jets in for Arsenal medical
l Spurs to conclude signing of Parker
ARSENALS sharp decline is down to
Arsene Wenger wielding too much
control over matters both on the field
and off it and the manager must be
challenged if the freefall is to be
arrested.
That is the view of football guru
and Wenger confidant Alex Fynn,
who believes the long-serving boss has
been allowed by the board to assume
excessive responsibility for both trans-
fer policy and the playing side.
Wengers methods and the once-
invincible Gunners fall from grace
have been hurled back into the spot-
light by Sundays 8-2 massacre at
Manchester United the clubs worst
result since 1896.
Fynn, who advised on the creation
of the Premier League and got to
know Wenger while writing Arsnal,
an insiders look at his tenure, insists
sacking the Frenchman would be
drastic and that he remains the
right man for the job.
But, he adds, Wenger must compro-
mise his vision of a team built on tal-
ented youngsters by investing in
players with pedigree and consider
strengthening his back-room team
with figures prepared to question
him.
The key thing is that until recent-
ly he wasnt challenged by the board,
and he certainly isnt challenged by
anybody on the playing side, Fynn
tells City A.M.
So he has been allowed to develop
a policy that has come under threat
with the free spending first of all of
Chelsea and then of Manchester City.
That policy was to grow your own
and develop players from youth to
first team. Thats where it has gone
wrong.
Fynn believes a youth-orientated
strategy was the right one while
Arsenal paid off the debt relating to
the Emirates Stadium move, but that
they have been too slow to react to a
change in market conditions brought
about by cash-rich rivals.
Self-sufficiency is fine so long as
there is an even playing field, he
says. Time has moved on and Arsenal
have not changed their strategy.
Chief executive Ivan Gazidis was
hired to improve the clubs commer-
cial performance and has succeeded,
but could now take a more hands-on
approach in transfers, says Fynn,
while promoting youth-team coach
and famously no-nonsense title-win-
ning centre-half Steve Bould might
help mend defensive frailties.
However, Fynn is adamant that
inviting ousted former vice-chairman
David Dein back to the fold, while
beneficial, would not be the panacea
touted as by some.
Its not likely and its also a falla-
cious policy, he says. If David Dein
came back it would help the situation
but what people fail to realise is that
he didnt really challenge Wenger.
Far from blaming the club for fail-
ing to help him, Fynn believes
Wenger feels privileged to still be in
charge and will be frustrated with
himself more than anyone. I think
hes taken on too much and he is a
very harsh critic, not of others obut of
himself, says the former Saatchi and
Saatchi director, who has just updat-
ed his book.
While the weekend result at Old
Trafford marked a new low and
increased mutterings about the end
of Wengers 15-year reign, Fynn says
any talk of sacking is drastic. There
are simple steps that could be taken
that would obviate the need for that
to happen.
And he is encouraged by the fact
the board appear to be beginning to
challenge Wenger, citing the summer
sale of Samir Nasri, a player he had
wanted to keep, and a pre-season trip
to Asia, rather than Wengers pre-
ferred Austria, as proof of progress.
Fynn concludes: Precedents have
been set and it looks as if they can go
forward together to the benefit of the
club.
Arsnal is available from Vision Sports
Publishing. More information is available
at www.visionsp.co.uk
BY FRANK DALLERES
FOOTBALL

ANDY CAN WIN AGAINST

ANYONE ON ANY SURFACE
DJOKOVIC WARY OF MURRAYS
FLUSHING MEADOWS THREAT: P25
27
Whats gone wrong for Arsenal and
Wenger? An insider gives his view
Sundays 8-2 loss to Man Utd marked a new low in Wengers long reign. Picture: PA
Last 10 league finishes and points totals:
01/02 1st 87 pts
02/03 2nd 78pts
03/04 1st 90pts
04/05 2nd 83pts
05/06 4th 67pts
06/07 4th 68pts
07/08 3rd 83pts
08/09 4th 72pts
09/10 3rd 75pts
10/11 4th 68pts
Arsenal results since Carling Cup final:
LWDLLDDWDDLWLLDDWLWL
FIRING BLANKS | ARSENALS DECLINE
Warnock eyes new
recruits to bolster
Rangers squad
QUEENS PARK RANGERS manager
Neil Warnock is set for a hectic dead-
line day as he looks to add to the sign-
ing of Arsenal left-back Armand
Traore. The Frenchman arrived for
1.2m yesterday and could be followed
by England Under-21 international
Henri Lansbury. Warnock is also chas-
ing Sunderlands versatile defender
Anton Ferdinand and will rival Spurs
for Liverpool winger Joe Cole. Peter
Crouch also continues to be linked
with a return to Loftus Road.
Meanwhile, west London rivals Fulham
have agreed a fee of 11.5m fee for
Twentes Costa Rica forward Bryan
Ruiz. That signing, however, could be
offset by the departure of American
forward Clint Dempsey who is wanted
by Sevilla and who has emerged as a
shock target for Arsenal.
Top flight transfer
spend hits 360m
and counting
PREMIER LEAGUE clubs have already
eclipsed their winter transfer window
spending by around 150m, but they
will have to pull out all the stops today
to match the record deadline day out-
lay of 31 January.
That day saw Chelsea lavish more
than 70m on striker Fernando Torres
and defender David Luiz while
Liverpool paid a British record 35m
for Newcastle forward Andy Carroll,
taking the total for the month to
215m.
More than 360m is already
thought to have been spent by top
flight sides since the window reopened
at the end of last season.
A frantic day is expected today as
clubs try to beat the deadline, but it
would take some huge shock deals to
beat Januarys record 130m.