Cityam 2011-11-29

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www.cityam.com FREE Issue 1,521 Tuesday 29 November 2011
CLOUDS GATHER AHEAD
OF OSBORNES BIG DAY
Unemployment is forecast to rise
from 8.1 per cent in 2011 to 9.1 per
cent in 2013.
And today The Office for Budget
Responsibility (OBR), Britains fiscal
watchdog, is expected to follow the
OECD by downgrading its own fore-
casts. Lower growth means the gov-
ernment will have to spend more on
benefits while collecting lower tax
revenues hitting Osbornes plans to
eliminate the structural budget
deficit in five years time.
Osborne will announce an exten-
sion of free nursery places to 260,000
children. But he is expected to pre-
serve cash by announcing a third
year of pay restraint in the public sec-
tor, City A.M. understands. According
to sources close to the Cabinet
Office, any rise in public sector pay
frozen for two years in 2010 may
be capped at around one per cent in
2012-13.
Osborne is also expected to
announce a series of micro-measures
designed to boost flagging growth.
Investors in start-up firms will be eli-
gible for new tax reliefs; there will be
50m of government cash for fast-
growing start-ups; and the rates holi-
day for 500,000 small firms will be
extended by six months.
As first revealed in City A.M. last
month, the chancellor is also set to
THE UK will fall victim to a second
recession, a leading economic fore-
caster warned yesterday, pushing up
unemployment and further damag-
ing George Osbornes hopes that he
will be able to meet his deficit reduc-
tion target.
The figures will make for grim
reading for the chancellor, who will
today deliver his Autumn Statement
just hours before millions of public
sector workers walk out on strike,
costing the economy around 500m.
Meanwhile, the debt crisis in the
Eurozone is still escalating, with
Eurogroup finance ministers due to
hold an emergency meeting today to
stop the contagion spreading from
peripheral countries like Greece and
Italy to formerly safe states like
Germany and Belgium.
Forecasts from the Organisation
for Economic Cooperation and
Development (OECD), released yes-
terday, predict the UK economy will
contract by 0.1 per cent in the last
quarter of 2011 and a further 0.6 per
cent in the first of 2012. These pro-
jections entail a 50bn black hole in
Osbornes books.
A sharper recession will come in
the Eurozone, which is forecast to
contract by 1.0 per cent and 0.4 per
cent in the same quarters.
Any recovery in the UK is not
expected to kick in until late next
year, with growth of 0.5 per cent in
2012 and 1.8 per cent in 2013.
BY DAVID CROW AND TIM WALLACE
ECONOMY
announce a 250m package of reliefs

for energy-intensive firms who have
been hurt by new green policies.
Meanwhile, Europes finance min-
isters will today hold crisis talks to
discuss options to save the Eurozone.
Yesterday, Germanys ministers
again ruled out a jointly guaranteed
Eurobond to finance troubled
nations, and Angela Merkels govern-
ment repeated calls for treaty
changes to impose more central con-
trol on member countries finances.
The Bank of Englands Mervyn
King said the solution was to trans-
fer money from countries with good
finances to those in trouble, as well
as long-term labour market reforms.
However, the Eurozone faces a rap-
idly deteriorating economic situa-
tion. Yesterday, Moodys warned
the probability of multiple defaults
by Eurozone countries is no longer
negligible. The longer the liquidity
crisis continues, the more rapidly
the probability of defaults will rise.
ALLISTER HEATH: P2;
MORE: P2, 3, 4, 21, P30-31
l OBR expected to follow the OECD by slashing its growth forecasts
l Crippling strikes to paralyse Britain as millions walk out tomorrow
l Euro finance ministers meet in last-ditch talks to save currency
Chancellor Osborne
makes his Autumn
Statement today, as the
economy deteriorates.
Picture: REUTERS
... but equity markets are
still hoping for a miracle
Stock markets worldwide
shot up yesterday, defy-
ing gloomy forecasts. The
FTSE jumped 2.87 per
cent; the DAX soared by
4.6 per cent; the CAC
stormed up 5.46 per cent;
and the Dow Jones rose
2.59 per cent, as hopes
built that finance minis-
ters or the IMF would
somehow save the euro.
News
2 CITYA.M. 29 NOVEMBER 2011
ICAP braces
for euro fail
ICAP, the worlds top broker for for-
eign exchange and government
bonds, said yesterday that it had been
testing its trading systems in the
event of a possible break-up of the
euro.
ICAP has been prepping its spot for-
eign exchange platform, EBS, over
the past six months to ensure it could
handle trading the Greek drachma
after growing fears over the
Eurozones mounting debt crisis.
We have contingency tested the
Greek drachma in currency pairs ver-
sus the euro and the US Dollar
because our customers have
expressed concerns about how the
Eurozone situation will play out and
we have to be prepared for every even-
tuality, a spokesman for ICAP said
yesterday.
The London-based interdealer bro-
ker has only tested the drachma but
said its tests ensured it was prepared
to react quickly if one or more cur-
rencies were to withdraw from the
Eurozone.
Europes top brokers and
exchanges have been watching the
region closely in recent weeks for
signs a member may be forced to exit.
Currency settlement system CLS
Bank has also been running stress
tests to prepare for a dissolution of
the euro, sources reported last week.
BY KASMIRA JEFFORD
FINANCIAL SERVICES
LLOYDS SET TO EASE PRESSURE ON

CHIEF
Lloyds Banking Group is exploring
ways to reduce the workload on
Antnio Horta-Osrio, its chief execu-
tive, as it attempts to convince
investors he will be able to make a
successful comeback from a period of
medical leave. The state-backed bank
is considering fortifying the support
around Mr Horta-Osrio to ease the
pressures of the top job, according to
people familiar with its thinking.
SEAT PAGINE DISPUTE TRIGGERS TEST
CASE FOR CORPORATE CDS MARKET
The effectiveness of derivatives to
insure against companies defaulting
on debt is to be tested in a benchmark
case involving the Italian directory
company Seat Pagine Gialle. The
industry body overseeing the multi-
trillion dollar market for credit
default swaps has been forced to refer
a decision on whether the firm had
defaulted to external review after
heated complaints from hedge-fund
investors.
WATCHDOG SUGGESTS PWC FINE OF UP
TO 34M
The disciplinary arm of the UKs
accounting regulator has suggested
that PwC should receive a fine of as
much as 34m for auditing failures
relating to JPMorgans securities busi-
ness. At a disciplinary hearing yester-
day, the lawyers representing the
Accountancy and Actuarial Discipline
Board said that the penalty on PwC
should not be vastly disproportion-
ate to the 33.3m fine imposed on
JPMorgan last year.
UNILEVER WORKERS VOTE FOR STRIKE
ACTION OVER PENSIONS
Workers at Unilever in the UK have
voted overwhelmingly in favour of
strike action over the closure of the
Anglo-Dutch multinationals final
salary pension scheme.
POOR WILL PAY IF TESCO IS KEPT OUT
OF INDIA, ECONOMIST CLAIMS
Hundreds of millions of Indias poor-
est people will be forced to pay higher
prices for basic food staples including
rice and vegetables if government
proposals to allow foreign supermar-
kets to open in India fail, Kaushik
Basu, the countrys chief economic
adviser has told The Times.
COMPUTER ATTACKS SOAR WITH UK
PLC UNPROTECTED
Cyberattacks are fast replacing quick-
fingered employees and crooked
beancounters as the biggest criminal
threats to British businesses, research
shows. More than a quarter of British
companies were victims of some form
of computer-related crime, such as
hacking or intellectual property
theft, in the past year, according to
the latest economic crime survey by
PwC.
ICELAND COULD START SELLING TVS
AND LINGERIE
Iceland could start selling TVs, lin-
gerie, pots, pans and toys, according
to an "alternative business plan" sent
to potential buyers of the frozen
supermarket chain. According to
strategy consultants OC&C, Iceland's
new owner could boost growth by
expanding into non-grocery sales.
This could include things such as elec-
trical goods, homewares, clothing and
video games.
SMALL FIRMS WIN ONE IN THREE
BANK APPEALS
More than one in three small busi-
nesses using an appeals process set up
following the Project Merlin agree-
ment have successfully challenged a
banks decision to reject a loan appli-
cation, according to Russel Griggs,
who leads the appeals systems team
of independent reviewers.
KINDLE CATCHES FIRE
After more than a year of missteps by
Apples tablet rivals, at least one
viable competitor appears to have sur-
faced for the popular iPad.
Amazon.com yesterday trumpeted
the success of its recently launched
Kindle Fire table, part of a family of
Kindle products. The company said it
sold more than four times as many
Kindle products on Black Friday last
week as the same day in 2010.
YEN FORCES TOYOTA TO RETHINK
JAPAN-BASED PRODUCTION
Toyota president Akio Toyoda said yes-
terday the auto maker would consid-
er shifting more of its compact-car
production from Japan and shake up
its supplier base to stay competitive if
the yen remains at record highs
against the US dollar. He said it
doesn't make sense at the current
yen rate to export compact cars.
WHAT THE OTHER PAPERS SAY THIS MORNING
Stagnation looms for Western world
PRODUCING detailed, quantitative
economic forecasts is the closest thing
the modern world does to sorcery. Its
a fools game; the results will only be
right by chance. There are too many
variables. What economists and com-
mentators can more successfully
achieve, however, are broad pattern
predictions and it is clear that the
UK, US and European economies are
facing a major turning point.
I will make just five predictions:
first, that the Eurozone and European
Union will look very different to today
in one years time, triggering a series
of political crises, including in the UK;
second, that the credibility of fiat,
paper currencies will be put under
maximum pressure as central banks
roll out the printing presses, eventual-
ly rattling investors and the public;
three, that massive deficit financing
(the UK is borrowing 122bn this fiscal
year) and quantitative easing (the
bank of England is adding an extra
75bn at present) will not have any
discernible impact on demand; four,
that George Osbornes growth plan
will only modestly help the economy;
and five, that quasi-stagnation will be
the best the UK, Eurozone and US will
be able to hope for next year. It is hard
to be any more precise than that. I
envy the OECD, which is brave enough
to predict that the UK and Eurozone
are set for a double-dip recession.
Todays Autumn statement from
George Osborne to be delivered at
lunchtime will be interesting but
will have less of an impact on Britains
performance over the next few years
than the fate of the Eurozone. The lat-
est policies to emerge are an extension
of taxpayer-funded childcare for
260,000 children (a policy reminiscent
of one mulled but never delivered
three years ago by Gordon Brown); a
(welcome) extension of the business
rate holiday on tiny firms; a seed
enterprise incentive scheme; and a
likely extension of pay restraint on the
public sector for at least an extra year
(see page 1 for our story).
The infrastructure and deregula-
tion plans are good news but insuffi-
ciently ambitious; a few billion in
extra private sector capex spending
will make little difference to an econo-
my the size of Britains.
There will be much boasting about
the safe haven dividend from lower
gilt yields, reducing the UKs interest
on recently-issued national debt
even though it could all vanish if the
crisis intensifies and from now on,
whenever yields go up, even momen-
tarily, Ed Balls will be able to claim
that the dividend has just been cut.
The OECD thinks the UKs structur-
al (cyclically adjusted) deficit is 7.5 per
cent of GDP in 2011, worse than any
rich country apart from the US. The
Office for Budget Responsibilitys ver-
dict this afternoon is likely to be pret-
ty grim too: it last projected the
structural fiscal deficit at just 3.7 per
cent of GDP in 2012 and 2.0 per cent of
GDP in 2013, which sounds naively
over-optimistic today. Citigroup calcu-
lates that the OECDs own estimate is
2.8 per cent of GDP (44bn) worse for
2012, and 3.2 per cent of GDP (52bn)
worse for 2013. These projections put a
50bn hole in the UKs fiscal outlook.
The UKs structural problems are
entirely self-inflicted; but its cyclical
ones are not. As Sir Mervyn King right-
ly put it yesterday, the bulk of the
reduction in growth is being caused
by the Eurozones woes. America too is
rattling the world: last night, Fitch put
the US on negative watch. It is going to
be grim, not just today or tomorrow,
but for a long time to come.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
ITALY and Spain have not asked the
International Monetary Fund for any
funding despite fears they will need
help beyond a European rescue
scheme, its boss Christine Lagarde
said last night.
She called for a swift solution to
the crisis and said the IMF can make
loans only when governments ask for
them, as happened with Portugal,
Ireland and Greece.
The IMF has not received any
request for assistance from, nor are
we negotiating with, either Italy or
Spain, she said after a meeting with
Peruvian President Ollanta Humala.
We have offered our assistance for
fiscal monitoring in Italy, she said.
Lagarde spoke out after reports the
IMF is planning a 600bn (515bn)
package to help Italy and a credit deal
for Spain. A handout from the IMF
would expose British taxpayers to
losses if the recipients could not pay
back their loans.
BY PETER EDWARDS
WORLD ECONOMY
No pleas from Italy: IMF

Omerta: Christine Lagarde said neither Italy nor Spain have asked for help Pic: REUTERS
NEWS | IN BRIEF
Greek banks hit by debt haircuts
Greek lenders Alpha and Eurobank yes-
terday reported nine-month losses due
to impairments from a bond swap
agreed in July and said they would
adjust their capital raising plans after a
new debt exchange plan is finalised. The
two lenders have agreed to merge to
form one of the largest banks in south-
east Europe. Greek banks are trying to
cope with rising bad debt provisions and
a shrinking deposit base as the austeri-
ty-hit country struggles through its
fourth straight year of economic con-
traction.
Lehman Europe claims $1.4bn
The European arm of Lehman Brothers
yesterday sued a unit of bond insurer
Assured Guaranty, claiming more than
$1bn for a series of credit derivative
transactions. In a lawsuit filed in the US,
Lehman Brothers International (Europe)
said the unit, AG Financial Products,
miscalculated termination payments
under the deals, using an incorrect and
approach to conclude it was owed near-
ly $25m. The lawsuit claimed a proper
calculation resulted in AGFP owing the
London-based unit about $1.4bn.
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ALLISTER HEATH
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Editorial
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News Editor David Crow
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ITALY and Belgium saw their debt
costs rocket to new records in bond
auctions yesterday in an ominous pre-
cursor to Romes much larger long-
dated debt sale this morning.
Despite an early market rally due to
reports of a bailout plan for Italy,
Rome was forced to pay over 7.3 per
cent plus inflation to borrow just
567m (487m) yesterday, a drop in
the ocean compared to its 8bn debt
auction set for this morning.
If Rome sees similarly muted
demand this morning, the European
Central Bank (ECB) will almost certain-
ly have to ramp up its bond purchases,
which came to 8.58bn last week.
The ECB now holds more than
203bn of mostly junk sovereign
bonds, having stepped up its purchas-
es in recent weeks in response to rising
yields for Europes biggest seller of
debt, Italy, which is widely regarded as
too big to bail.
Belgium saw a reasonable level
demand for its 2bn sale but paid an
average yield of 5.7 per cent, signifi-
cantly above the 4.4 per cent it was
forced to stump up at the last equiva-
lent auction less than a month ago.
Market hopes that Europes elites
could be putting together yet another
bailout package or preparing to
unleash the ECBs full firepower were
dashed later in the day by German
finance minister Wolfgang Schuble,
who talked down the idea of using the
ECB as a lender of last resort and again
rejected the idea of issuing joint euro
bonds.
Soaring yields
push ECB debt
over 200bn
MONEY is flooding out of peripheral
Eurozone countries and into the core
in a worrying sign for the regions
economies, Hendersons Simon Ward
warned yesterday.
Examining official statistics
released by European authorities,
Ward highlighted a widening
core/periphery divergence, with capi-
tal fleeing Greece, Portugal, Ireland,
Spain and Italy.
M1 money supply meaning cash
in circulation and in bank accounts
is declining at an accelerating rate in
the periphery, the numbers show.
Although M1 money supply is little
changed over the last six months on a
regional basis (down 0.3 per cent), indi-
viduals have been pulling their money
out of the edges of the Eurozone and
depositing it in the regions less
indebted countries.
M1 deposits have dropped by 4.2 per
cent over the last six months in the
periphery, with the capital flight worst
in Greece (20.7 per cent), Portugal (16.3
per cent) and Ireland (11.8 per cent).
By contrast, Germany, France and
surrounding countries have seen M1
money supply rise by 2.1 per cent over
the same period.
The periphery economies remain
locked on course for a depression bar-
ring radical ECB action, says Ward.
Capital flight
from periphery
accelerating
BY JULIET SAMUEL
EUROZONE
News
FITCH Ratings has cut its outlook on
US sovereign debt to negative, after
the congressional super-committee
failed last week to agree on at least
$1.2 trillion in spending cuts.
Fitch said yesterday that it will
keep its rating for long-term US debt
at the top AAA level, but said the
negative watch reflected its declin-
ing confidence that timely fiscal
measures necessary to place US pub-
lic finances on a sustainable
pathwill be forthcoming.
The move came as President
Barack Obama told European offi-
cials yesterday that the US adminis-
tration was ready to do [its] part to
help Europe resolve the debt crisis,
which is also weighing on the US.
Obama was speaking at the White
House after a meeting with
European Council president,
Herman Van Rompuy, and European
Commission president, Jose Manuel
Barroso.
BY KASMIRA JEFFORD
WORLD ECONOMY
BY JULIET SAMUEL
EUROZONE
Fitch Ratings revises US

credit outlook to negative
Obama hosts the annual White House summit with European leaders Picture: REUTERS
ANALYSIS l Yield on Italian 10-year
debt yesterday
%
09:00 15:00 13:00 18:00
7.30
7.25
7.20
7.15
7.10
GEORGE Osborne, the chancellor, will
today claim to have saved the taxpayer
some 21.5bn in debt interest pay-
ments, arguing his deficit reduction
plan has kept yields on government
bonds at record lows.
Osborne is expected to announce
the so-called safe haven dividend
when he delivers his Autumn
Statement to the House of Commons
this afternoon. It is expected to con-
tain a raft of so-called micro-measures
designed to boost flagging growth
without the need for tax cuts or high-
er government spending.
The chancellor has used forecasts
from the Office for Budget
Responsibility, which predicted
Britains interest payments before the
Budget in March, when the yield on 10
year gilts was 3.6 per cent.
At the end of last week, the rate on
10 year gilts was 2.3 per cent 1.3 per
cent less equating to a implied sav-
ing of 21.5bn by 2015-16. However,
this number will change if the OBR
adjusts its forecasts for growth or pub-
lic finances, as is widely expected.
Osborne is also expected to
announce a package designed to boost
smaller firms, including a new
scheme to encourage investment in
small and medium-sized start-up com-
panies. Individuals who invest in
these companies will receive 50 per
cent income tax relief up to an invest-
ment limit of 100,000. Those who
reinvest their gains in the business
will pay no capital gains tax in 2012-
13.
He will also announce a 50m fund
to invest alongside business angels
to help fund small, high-growth busi-
nesses.
And he will extend rate relief for
small businesses for six months until
April 2013. Those with a rateable value
of less than 6,000 will pay no rates
while those with a rateable value up
to 12,000 will get some relief. In total,
500,000 firms will benefit.
Osborne is also expected to unveil
prompter payment of government
contractors, who currently have to
wait up to 100 days before being paid.
A Treasury source said: The overall
tone is that the chancellor wants to
continue to protect Britain from the
gathering debt storm.
Meanwhile, the chancellor is
expected to announce an extention of
free childcare for the most disadvan-
taged two year olds. The number of eli-
gible children will be doubled from
130,000 to 260,000, costing the gov-
ernment an extra 650m by 2014-15.
Osborne: safe
haven status
saves 21.5bn
News
The chancellor will say he wants to protect the UK from a debt storm Picture:REUTERS
AUTUMN STATEMENT
BY DAVID CROW
EXPECTED ANNOUNCEMENTS
EXTENSION OF FREE CHILDCARE
The chancellor is expected to announce
380m a year by 2014-15 to increase the
number of two-year-olds eligible for free
childcare. Currently, 130,000 two-year-
olds are entitled to 15 hours of free child-
care a week, but this will increase to
260,000 within four years, equivalent to
60 per cent of two-year-olds from the
poorest families.
SEED ENTERPRISE SCHEME
The chancellor will also announce a
scheme to encourage individuals to invest
in small-and medium sized start-ups.
Those who invest in firms with fewer than
25 employees and less than 200,000 of
gross assets will receive income tax relief
of 50 per cent. The amount any individual
can invest will be capped at 100,000,
while firms will be able to accept up to
150,000 from one or more investors.
Those investors who re-invest their gains
in the business in 2012-13 will pay no capi-
tal gains tax.
PUBLIC SECTOR PAY RISE CAP
Any rise in public sector pay which was
frozen for two years in 2010 will be
capped at around one per cent in 2012-13.
BUSINESS ANGEL FUND
The government will invest 50m of pub-
lic money in small high-growth companies,
alongside private co-investors.
EXTENSION OF SME RATES HOLIDAY
Osborne will extend the existing rate relief
schemes for small businesses for a further
six months until April 2013, helping half a
million firms. Businesses with a rateable
value of less than 6,000 will pay no busi-
ness rates, while those with a value of
12,000 or less will get some help.
PROMPT PAYMENT
Government contractors, who currently
have to wait for 100 days before being
paid, will receive payments more quickly.
EMISSIONS TRADING RELIEF
The government will spend 110m com-
pensating energy-intensive firms losing
out due to the emissions trading scheme.
CARBON PRICE FLOOR RELIEF
Energy intensive firms will receive 100m
in compensation to offset the impact of
the carbon price floor.
CLIMATE CHANGE LEVY RELIEF
Green firms will receive 40m of compen-
sation to offset the climate change levy.
THE government will today announce
a package of reliefs worth 250m to
help offset the crippling impact of its
green policies on energy intensive
companies.
The package, which was first
revealed in City A.M. last month, will
help those firms who use large
amounts of energy such as steelmak-
er Tata and chemicals specialist
Ineos.
There will be 110m to compensate
firms hit by the EU emissions trading
scheme; 100m for those hurt by the
governments carbon price floor; and
40m for firms who lose out because
of the climate change levy.
The chancellor is also expected to
say he will examine how the govern-
ment can reform the electricity mar-
ket so it discourages the use of carbon
without hurting firms who need to
use large amounts of it.
Chancellor to unveil 250m to
help energy-intensive industry
BY DAVID CROW
AUTUMN STATEMENT
EUROZONE banks must de-leverage to

the tune of 2-3 trillion even if minis-
ters get past the hurdles of arranging
euro-bonds and liquidity support,
UBS analysts said yesterday in a note
to investors.
If correct, the estimate means that
Europe faces a severe credit crunch
even if its political elites agree to issue
jointly guaranteed bonds and the ECB
launches quantitative easing.
Assuming we get term funding
guarantees and stability bonds (big
ifs), banks will still need to shrink to
meet onerous incremental regulatory
demands, the analysts write.
THE BANK of England will need to
restart and extend its liquidity support
schemes for the UKs biggest domestic
banks as they face a wall of 76bn in
maturing debt next year, according to
research by Credit Suisse.
Analysts led by Carla Antunes da
Silva suggest that the UKs relatively
safe haven status could prompt the
government to fire up the Bank of
Englands special liquidity scheme
(SLS) and credit guarantee scheme
(CGS) to avert a credit crunch.
Money supply figures out yesterday
show that broad money or M3
most money in the economy also
contracted 59bn to 9.78 trillion in
October, which economists say is a sig-
nal that a credit crunch has begun.
The UK is uniquely positioned in
this context given Eurozone sovereign
concerns, da Silva writes.
Doing so could jumpstart the mar-
ket for bank debt, which has seized up
in recent months due to the debt crisis
and regulatory uncertainty.
Da Silva estimates that restarting
the CGS alone could bring down the
cost of insuring bank debt by 135-245
basis points, with most of the benefit
going to Lloyds and RBS.
RBS will see the largest share of
debt, 31bn, mature and still benefits
from 14.3bn in CGS support, accord-
ing to Credit Suisse estimates, while
Lloyds will see 27bn of debt mature
and still gets 10.9bn of support. As a
result, each of the state-owned banks
will need to refinance more than
20bn next year.
And the debt cliff comes against a
backdrop of regulatory change that is
stoking nerves among banks, prompt-
ing a huge lobbying operation. As
revealed by City A.M. last week, banks
are fighting Vickers Commission plans
for the UK to force bondholders to take
losses when a bank fails.
Credit Suisse:
banks to get
liquidity aid
SWEDEN plans to impose tough bank
liquidity rules on its top four domes-
tic lenders from 2012, three years
ahead of the anticipated global phase-
in, a senior regulator said yesterday.
We hope to move forward with a
liquidity coverage ratio (LCR) for the
big banks. We are working on it for
the four big ones, Lars Frisell, chief
economist at Swedens FSA regulator,
said.
The move follows the news on
Sunday that Sweden will force its
banks to implement goldplated capi-
tal requirements ahead of the Basel III
schedule.
Swedish plans
liquidity rules
Euro banks need
to deleverage
BY JULIET SAMUEL
BANKING
EUROZONE
EUROZONE
DAVID Mayhew, one of the Citys best-

connected bankers, is to step down as
chairman of JP Morgan Cazenove
after 42 years with the blue-chip firm.
Mayhews name has become syn-
onymous with the Queens stockbro-
ker, which sold itself to US banking
giant JP Morgan in 2009, and his res-
ignation will draw the curtain on an
era in British banking.
In an internal memo sent to staff
yesterday, JP Morgan said Mayhew
will continue to work as a vice-chair-
man of the investment bank but
without day-to-day responsibilities for
Cazenove.
The memo describes Mayhew as
one of the architects of Cazenoves
success as the UKs leading corporate
broker and one of the forces behind
its merger with JP Morgan.
Mayhew will be succeeded by Tim
Wise, who has been with the firm for
the past 12 years and became head of
corporate finance in 2001.
Mayhew has advised on block-
buster deals including the bid
defence of Marks and Spencer and
the demerger of Centrica and Lattice
from British Gas.
In 1992, he emerged unscathed
from an investigation into share
manipulation by Guinness during its
takeover of Distillers in 1986.
City veteran Mayhew to step
down as chairman of Cazenove
BANKING
News
ANALYSIS l Lloyds Banking Group PLC
p
22Nov 23Nov 24Nov 25Nov 28Nov
26
24
22
20
18
16
14
23.68
28 Nov
David Mayhew is stepping down as chairman of JP Morgan Cazenove
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BUSINESS clothing company TM
Lewins sales revenue hit the
100m mark for the first time
ever in the year ending 26
February, due to its expanding
international market.
The firms sales revenue
jumped 20 per cent to
100.4m, of which 87
per cent came from UK
stores and 13 per cent
from overseas.
Earnings before
interest, tax, depre-
ciation and amorti-
sation rose five per
cent to 14.7m.
While the compa-
nys gross margin decreased
slightly due to increases in
VAT and cotton prices, the
strong financial perform-
ance continued into the first half of
this year with overall sales up nine per
cent, of which 26 per cent was from
outside the UK.
The retailer boasts 100 stores
in the UK and seven in
Singapore and Malaysia. It
intends to open five more in
Australia and Czech Republic as
part of its international
expansion plan.
TM Lewin aims to
double sales by focus-
ing on overseas and
multi-channel sales
expansion, with the
objective of interna-
tional sales reaching
88m by 2016.
Chief executive Geoff
Quinn (left) said: Our
growth strategy will
enable us to realise our
ambition of establishing
the brand worldwide.
TM Lewins
global spread
lifts revenue
BY LAUREN DAVIDSON
RETAIL
WOMENS fashion retailer Jacques

Vert yesterday warned that its pre-tax
profits are likely to be lower than
expected due to the recent warm
weather.
Although sales for the first 29
weeks of this financial year are 0.8 per
cent per cent higher than last year,
like-for-like sales have decreased by 0.3
per cent. The group has pinpointed
feeble consumer confidence as the
cause of weakened sales as well as the
unseasonal weather which has hit
coat sales particularly hard.
Jacques Vert has responded by put-
ting promotional discounts in place,
in a bid to increase sales.
The company reported a creditable
performance overall, stating that its
balance sheet remains strong.
Its shares tanked 9.1 per cent to
12.5p yesterday.
Jacques Vert says the warmer
weather brings a chill to sales
RETAIL
News
TM Lewin will continue its international expansion in Australia and Czech Republic
ANOTHER day, another tale of high
street woe. Jacques Vert, the quin-
tessentially British dressmaker,
warned on profits after sales were
hit by poor consumer confidence
and the late onset of winter.
Although it has a stronger bal-
ance sheet, we think it shares the
same basic problems as Alexon,
which fell into administration in
September: an ageing product that
is too old-fashioned for the already
depressed domestic market, along
with a failure to sufficiently build
its presence overseas.
As ever, we would advise
investors to avoid the mid-market
and focus on high-end retailers
who are well-diversified both in
terms of location and the internet.
One such retailer is privately-
held TM Lewin, which specialises
in selling elite shirts, ties and suits
at affordable prices. It doesnt
break out like-for-like sales, but has
managed to notch up total rev-
enues of more than 100m for the
first time.
We reckon its sensible for the
firm to use stores in Malaysia and
Singapore to offset lower takings
back at home.
BOTTOMLINE
Analysis by David Crow
NEWS | IN BRIEF
Clinton Cards facing tough times
Struggling British cards and gifts retail-
er Clinton Cards has said sales are falling
at a worsening rate as it battles tough
trading conditions. The firm, also facing
intense competition from supermarkets
and the internet, said yesterday that
sales at stores open over a year fell 2.4
per cent in the 16 weeks to 20
November. That compares with a decline
of 1.5 per cent in the first 12 weeks of
its financial year, reported last month.
During the last month we took the deci-
sion to convert seasonal Halloween
stock to cash through a price led promo-
tion strategy which was successful
albeit at a reduced margin, said the
firm, which trades from 633 Clinton
Cards stores and 142 Birthdays outlets.
Clinton said it planned to use the same
price cutting tactic after Christmas.
A tale of two retailers
RETAILERS are taking a beating as
consumers tighten their belts,
according to the Confederation of
British Industrys (CBI) distributive
trades survey, published yesterday,
and the GfK consumer products
study, out today.
Almost half of retailers saw sales
fall in the year to November, com-
pared with 29 per cent who experi-
enced an increase a far weaker
picture than the CBIs economists
expected.
A net balance of 39 per cent
reported below average sales for
the time of year the largest pro-
portion since March 2009.
In terms of jobs, 40 per cent
reduced employment this month
while just 13 per cent increased it.
The relatively mild weather this
autumn has hit clothing stores par-
ticularly hard, and retail sales are
down year-on-year for the sixth
month in a row, said the CBIs
chief economic adviser Ian
McCafferty.
Retailers may be hoping that
shoppers will loosen their purse
strings in the run-up to Christmas,
but consumers are likely to remain
cautious about spending, given the
uncertain economic outlook.
However, that looks unlikely,
according to shoppers polled about
their likely shopping habits over
the next month.
The GfK study, out today, showed
36 per cent of consumers claim
they will be cutting back this
Christmas, up from 26 per cent last
year.
The outlook for next year is not
positive either 69 per cent fear
the Eurozone crisis impact on the
UK economy, and 64 per cent
expect the economic situation to
get worse before it gets better.
It is hard to be optimistic over
the prospects for consumer spend-
ing, said Howard Archer, chief
European and UK economist at IHS
Global Insight.
Consumer confidence is at near
record low levels, with purchasing
power under severe pressure from
high inflation, muted wage growth
and tight fiscal policy.
Shops cutting jobs
as retail sales fall
BY TIM WALLACE
RETAIL
News
ANALYSIS l Trend in numbers employed
%
2000 2002 2004 2006 2008 2010
30
20
10
0
-10
-20
-30
-40
-50
-60
Reported
Expected
Sainsburys stays neutral
in supermarket price war
J SAINSBURY says it will not join
the wave of discounting sweeping
the retail sector, believing shop-
pers will splash out on Christmas
despite a gloomy economic back-
drop.
Commercial director Mike
Coupe made the vow as Britains
third-biggest supermarket group
unveiled its biggest ever
Christmas range, including
around 500 groceries and 700 non-
food items.
The evidence would suggest
that when there is a family occa-
sion, when theres a moment in
time that people are bought into,
whether thats the royal wedding,
whether its Halloween or
whether its Bonfire Night, they
will spend and they will invest in a
great family occasion, he said on
a store tour in north east London.
Many retailers are struggling as
shoppers disposable incomes are
squeezed.
Several chains including major
rival Tesco are cutting prices in a
bid to lure shoppers, but Coupe
said: Youre far better holding
your nerve and sticking to what
you have planned.
He added that a trend towards
last-minute spending was likely to
be exacerbated this year due to
Christmas falling on a Sunday.
BY HARRY BANKS
RETAIL
J Sainsbury, led by chief executive Justin King, says it will not slash prices to lure Christmas shoppers
ANALYSIS l J Sainsbury PLC
p
294
292
290
288
286
284
282
293.60
28 Nov
Womenswear | Menswear | Accessories

Cabot Place
020 3069 8790
AQUASCUTUM.CO.UK
Purchase online and collect in store.
ROLLS-ROYCE yesterday unveiled a
deal with its pension trustees to off-
set the cost of paying out to employ-
ees who live longer than expected.
The longevity swap deal will see
Deutsche Bank taking on 3bn of the
risk associated with the companys
pension.
The worlds second-largest maker
of aircraft engines said the agree-
ment would give additional security
to all members of the companys final
salary pension scheme whose contri-
butions will not be affected.
An estimated 37,000 pensioners
will be covered by the deal.
Rolls-Royces finance director
Andrew Shilston said: The contract
with Deutsche Bank reduces the risk
on approximately 3bn of the funds
liabilities.
The cost of this transaction will be
borne by the pension fund and will
have no material effect on the fund-
ing arrangements.
We have made sure that as our
pensioners live longer in retirement
we have made proper provision for
them.
The agreement will see Deutsche
Bank take the risk in return for
receiving the pension contributions
beyond a certain age.
The bank was provided with a
detailed analysis of the expected
longevity of members of the Rolls-
Royce pension scheme.
It will also pass some of its risk on
the deal to re-insurers.
Some companies have been left
with the dilemma of keeping pension
schemes running which have become
more and more expensive as the pop-
ulation lives longer.
Paul Spencer, the chairman of
Rolls-Royces pension fund trustees,
said: We have been working closely
with Rolls-Royce for some years to
enhance the security of all our mem-
bers benefits. This is another impor-
tant step forward.
Earlier this month Rolls-Royce,
which makes engines for planemak-
ers Airbus and Boeing, also said it
had performed well in the third-quar-
ter and expects to deliver strong
growth in full-year profit, shrugging
off turmoil in financial markets.
Rolls-Royce
seals pension
trust future
BY JOHN DUNNE
ENGINEERING
Finance chief Andrew Shilston (inset) said the deal reduces risk Pictures:GETTY/PA
News
NEWS | IN BRIEF
ANALYSIS l Rolls-Royce Holding PLC
p
690
680
670
660
698.50
28 Nov
Olympus could face new probe
Japans securities regulator the
Securities and Exchange Surveillance
Commission (SESC) has launched an on-
site investigation of Olympus Corp to
uncover the details of the company's
loss cover-up scheme, the Nikkei said.
Invoking the Financial Instruments and
Exchange Law, the SESC will ask
Olympus to submit in-house financial
documents concerning past mergers and
acquisitions, it reported. The SESC will
also examine the processes in which
investment losses were moved off the
companys balance sheet, the Nikkei said.
The financial watchdog will reportedly
retrace fund flows, including the hefty
fees paid to a financial adviser for
Olympus acquisition of UK medical
devices maker Gyrus.
Matt Wilmington of Aon Hewitts risk
settlement team led sensitive negoti-
ations between pension fund trustees,
Rolls Royce management and
Deutsche Bank.
Advising Rolls-Royce, the company
drew up a profile of those in the com-
panys pension fund and their life
expectancy.
The detailed process took a year,
with ten staff in total involved in
drawing up the complex settlement.
London-based Wilmington, who
has been with the company for ten
years, also worked on a similar deal
between BMW and its pension fund
trustees.
This is a complex process and
involves explaining exactly the impli-
cations to the trustees.
Having a bank like Deutsche
helped because it is well established.
We carried out a lot of research on
members of the pension fund to
assess the risk.
He said that companies are
increasingly going down the route of
offsetting pension fund risk.
ADVISERS: AON HEWITT
MATT
WILMINGTON
Join the
better offset
News
SHARES in Thomas Cook soared yes-
terday after the announcement of a
new 200m bank facility to help
secure the troubled tour operators
survival.
The travel firms banking syndicate
led by Barclays, HSBC, RBS and
UniCredit has agreed to replace the
100m short-term facility announced
last Monday with this new provision,
available until 30 April 2013.
Thomas Cook will pay five per cent
interest on the loan, rising 0.5 per
cent each quarter.
Last weeks announcement resulted
in the firms shares plummeting by 75
per cent, closing at 10p on Tuesday.
Yesterday they jumped as high as
28.5p before closing up 20 per cent at
21.73p
The group has postponed its full-
year results to the week commencing
12 December.
This new deal will also relax the
terms of the existing agreement,
allowing the company more flexibili-
ty when faced with unexpected events
arising from economic uncertainty.
Thomas Cook
soars on new
banking deal
TRADER Media Group (TMG) yester-
day reported solid sales for the six
months to 2 October, buoyed by
online growth.
Jointly owned by Guardian Media
Group and Apax Partners, TMG
showed an underlying revenue
increase of four per cent to 135.4m,
with total digital revenue up 15 per
cent to 96.4m.
Its underlying earnings increased
by 10 per cent to 70.6m. Free cash
flow at the end of this period was up
12 per cent to 42.2m.
The groups leading brand, Auto
Trader, is the UKs number one
motoring website.
In August TMG launched the Auto
Trader Index, a quarterly index that
tracks the asking prices of used cars
by type.
The group successfully raised an
additional 150m of debt from a new
term loan in June 2011, and in August
was able to pay a dividend of 115.5m.
TMG chief executive John King said:
Despite the tough conditions, we
remain confident that we will be able
to continue to grow the business.
Nomura cuts exposure to
Italian government bonds
NOMURA Holdings, Japans largest
investment bank, has cut its exposure
to Italian government bonds and
other Italian securities to $467m
(301.6m) from $2.82bn in less than
two months to reduce its risk in the
regions debt crisis.
Nomura said the move was part of
a broader reduction of its holdings in
Europe. The bank said in a statement
it lowered its total exposure to
Greece, Ireland, Italy, Portugal and
Spain to $884m as of 24 November
from $3.55bn as of 30 September.
The bulk of Nomuras holdings
were in Italian government debt.
Nomura spokeswoman Joey Wu
said the reduction reflected both the
maturing of securities and a sale of
others in reaction to instability in
financial markets. The bank would
continue to act as a market-maker in
Italian government debt and had no
plans to pull out, she said.
The debt crisis in Europe has
increased pressure on Nomura to put
the brakes on its global expansion,
which has included its purchase of
the Asian and European businesses of
failed Wall Street bank Lehman
Brothers in 2008.
Earlier this month, Nomura posted
its first quarterly loss in two and a
half years.
Digital sales grow
for Trader Media
BY LAUREN DAVIDSON
CONSUMER
BANKRUPT billionaire Sean Quinn

was yesterday ordered to repay 1.7bn
(1.5bn) to a state-owned bank in the
largest judgement ever against an
individual in Ireland.
Quinn, whose 4bn empire col-
lapsed after a disastrous investment
in Anglo Irish Bank before its 2009
nationalisation, was ordered to pay
the lender 417m, bringing his total
liability to 2.1bn.
Anglo Irish has recently been
renamed the Irish Bank Resolution
Corporation.
Sean Quinn is
ordered to pay
back state bank
MEDIA
REGULATION
BANKING
NEWS | IN BRIEF
KKR in Capital Safety buyout
KKR, one of the worlds largest buyout
firms, has bought safety equipment
maker Capital Safety for $1.12bn
(722m). KKR, which is acquiring the
company from private equity firm Arle
Capital Partners, said it sees attractive
prospects in the fall protection business
because of its ties to the energy and
infrastructure industries, with potential
for growth as more safety regulations
are implemented worldwide.
German Dominos bids to go large
The fledgling German operation of
Domino's Pizza UK & IRL could grow to
be twice as big as the UK business,
incoming chief executive Lance
Batchelor said yesterday. Domino's,
which operates the British and Irish
franchises of the global delivery brand
and opened its first stores in Germany
this year, believes the German market
could have 2,000 and 3,000 shops.
AOL not planning to buy Yahoo
AOL does not plan to buy any of
Yahoo's assets, AOL's chief executive
said yesterday. Tim Armstrong reiterat-
ed the company's strategy of staying
independent and growing its ailing
brand, known for its dial-up services,
into a media powerhouse dependent on
advertising revenue. Meanwhile, the
New York Times reported last night
that a constortium including Microsoft
and Silver Lake Partners was bidding
for a minority stake in Yahoo.
CITY VIEWS: IS THE REFINANCING ENOUGH
TO SAVE THOMAS COOK? By Lauren Davidson
WYN ELLIS | NUMIS

We believe that
the Thomas Cook brand is
highly respected and, with
the support of the banks
now made clear, bookings
may recover quickly. But we believe that the
brand has been damaged and this remains a
concern given the extensive use of the brand
on the high street.
SIMON FRENCH | PANMURE GORDON

The refinancing doesnt address the structural issues in the
company or the near term consumer issues, with UK bookings down 30
per cent last week. With full-year results publication delayed until the week beginning 12
December, profit forecasting is difficult for 2012. We reiterate our sell recommendation.
Thomas Cook has
postponed its
results until 12
December
Picture: REUTERS
JAMES HOLLINS | EVOLUTION

Longer-term, the
company will have to funda-
mentally adjust its business
model; savagely cut costs;
hope for more benign eco-
nomic conditions; and wish for negligible
external shocks such as the current events in
Egypt. The required changes are a tall order in
a structurally flawed industry.
ANALYSIS l Thomas Cook

p
30
25
20
15
10
21.73
28 Nov
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I
know its a clich, but people are
the same the world over. Every
time I visit Africa and meet our
clients, this universal truth hits
home theyve got the same fears,
the same hopes, the same dreams as
you and I.
Take education. Those of us with
families will know how often this
theme crops up at social gatherings
and how making the right choices
for our children can become some-
thing of an obsession.
Its just the same for parents in
Malawi. Except there, state educa-
tion is only available up to the age of
11. After that its a fee-paying
school, or nothing. For many that
brings it down to a simple choice of
educating or feeding the child.
So many of the parents I talk to
there are anxious to help their chil-
dren build a better life through edu-
cation. Being able to put by a little
each week into a savings account
that earns interest makes that par-
ticular dream more of a possibility.
CHIEF EXECUTIVE
OPPORTUNITY INTERNATIONAL UK
EDWARD FOX
Her ambitions have grown, too. She
now plans to expand her business fur-
ther, to supply all the local shopkeep-
ers and bring far more of her beauty
products into the area.
I would like to open a wholesale
store, and sell goods wholesale to the
community, Precious says.
With Opportunitys help, she hopes
to turn her small enterprise into a
valuable business tapping into a
growing demand in the area.
The money also means she can har-
bour bigger dreams for her family.
Her daughter is currently in school
and as the familys income grows,
Precious can make plans to continue
the girls education.
I would like my daughter to
become a doctor, she says.
With a little support to grow her
business, she is now much better
equipped to help her daughter do so.
OFFERING people financial services
as simple as a bank account or afford-
able business loan for the first time
can be life-changing.
Take Precious Bambala, a small-
time hairdresser based in the village
of Limbuli in southern Malawi, where
all the money raised in City A.M.s
Christmas charity appeal will be used.
In her remote rural area, banking
services that we consider universal
are still hard to come by, leaving
entrepreneurs like herself dependent
on day-to-day cash reserves to fund
their businesses.
Precious sells hair products and
extensions to boost her profits along-
side cutting hair but until three
years ago she could buy only a limited
amount of stock with the cash she
generated.
Thats when Opportunity
International stepped in to help. It
has worked in southern Malawi since
2006 and now has seven outlets and a
mobile banking van to reach clients.
Opportunity supplied Precious with
her first loan of 20,000 Malawian
kwacha, equivalent to about 75, to
buy more stock for the salon.
Three years later, Precious has
repaid that loan and taken out several
more to support the business. She has
received five loans in total, the most
recent of which was 50,000 kwacha
(187).
The effect on her business has been
remarkable. Profits have doubled to
10,000 kwacha (37) per month,
enough to allow her to help fund her
familys food and clothes, which she
was not able to do in the past.
Dreaming big in Malawi
Proudly sponsored by
Matching your donations with
DONATIONS to City A.M.s Christmas appeal are still
pouring in, and we are delighted that only two weeks
into our campaign we have raised more than 110,000
from our generous readers.
More than 12,000 has been gifted to our appeal by
phone, by text and through our website in the past four
days alone, including a significant sum from one private
donor who wanted to remain anonymous.
We are incredibly grateful for such enormous support
and every contribution, no matter how small, is very
welcome.
Through our match funding agreement, all donations
from UK individuals will be matched by the Government
pound for pound.
Our online auction is still taking bids on our unique
and exclusive prizes visit www.cityam.com/auction to
view the lots and start your bidding.
All proceeds will go to support Opportunity
Internationals work in southern Malawi, Africa.
110,000 RAISED SO FAR
BY PHONE: by debit or credit card to
01865 725 304
Text donations may not work from company
mobile phones as these often block
premium messages
BY TEXT: CITY11 and amount (5 or 10 only) to
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www.cityam.com/appeal
City A.M. Christmas Appeal
x
City A.M. Christmas Appeal
MAKING A DIFFERENCE
Precious Bambala in her

salon in Limbuli, Malawi
Picture: Angela Kingston
110,000
Giving people the
financial tools to
prosper can change
lives, Opportunity
International finds.
News
A US FEDERAL judge angrily blocked
Citigroups proposed $285m (184m)
settlement over the sale of toxic mort-
gage debt, rebuking the top US market
regulator over how it reaches corpo-
rate fraud settlements.
District Judge Jed Rakoff said the US
Securities and Exchange Commission
appeared uninterested in actually
learning what Citigroup did wrong,
and erred by asking him to ignore the
interests of the public.
An application of judicial power
that does not rest on facts is worse
than mindless, it is inherently danger-
ous, Rakoff wrote in his ruling yester-
day.
The judge added that it was difficult
to discern from the limited informa-
tion before the court what the SEC is
getting from this settlement other
than a quick headline.
He said that the proposed settle-
ment was neither reasonable, nor
fair, nor adequate, nor in the public
interest.
In response, the SECs director of
enforcement, Robert Khuzami, said in
a statement that $285m reasonably
reflects the scope of relief that would
be obtained after a successful trial
but without the risks, delay and
resources required at trial.
Citigroup declined to comment.
In its complaint, the SEC accused
Citigroup of selling a $1bn mortgage-
linked collateralised debt obligation,
in 2007 as the housing market was
beginning to collapse, and then bet-
ting against the transaction.
Rakoff called the Citigroup accord
too lenient, noting that the bank was
charged only with negligence, neither
admitted nor denied wrongdoing, and
could avoid reimbursing investors for
more than $700m of losses.
The settlement would have required
the US bank to give up $160m of
alleged ill-gotten profit, plus $30m of
interest. It also would have imposed a
$95m fine, which Rakoff called pock-
et change for Citigroup and said
investors were being short-changed.
Judge blocks
Citigroup-SEC
settlement
PROTESTERS who have taken over a
disused UBS building in the City
could cling on for several more weeks
after their case was adjourned in the
High Court.
Yesterday the so-called Bank of
Ideas challenged the possession order,
issued by UBS subsidiary Sun Street
Properties, at a preliminary hearing.
Activists, who represented themselves
in court, believe they can exploit the
fact that certain key items were miss-
ing from the paperwork.
The case Sun Street Properties v
Persons Unknown has been listed
for next Monday.
UBS is expected to win eventually,
although any eviction is not guaran-
teed to occur immediately, given the
time needed to bring in bailiffs. UBS
declined to comment.
Up to 100 activists are using the for-
mer office block each day and the
Occupy group has offered local com-
munity groups hit by government
spending cuts the chance to use its
facilities.
A separate City of London action
against the St Pauls protesters will be
heard in the High Court on 19
December. The Occupy LSX group
received a boost last week when play-
wright Alan Bennett visited and car-
ried out a reading amid the tents.
Squatters stay
on at UBS amid
legal deadlock
Mayor of London Boris Johnson is ahead of Livingstone, a poll shows Picture: REUTERS
BY HARRY BANKS
FINANCIAL SERVICES
POLITICS
MAYOR of London Boris Johnson is

on course to win re-election next
year, according to a poll out yester-
day.
Around 48 per cent of Londoners
expect to give their first preference
vote to Johnson, compared with 40
per cent to Labours Ken Livingstone
and just six per cent for Lib Dem can-
didate Brian Paddick.
And for second preferences,
Paddick gets 36 per cent, Livingstone
19 per cent and Johnson 15 per cent
enough for the incumbent Boris to
maintain his lead, according to
research by ComRes.
Despite growing support for the
Labour party nationally, Johnson has
extended his lead in London since a
similar poll in March.
The rise hints that Johnsons per-
formance during the riots has
improved his standing.
Boris and Ken supporters are both
equally likely to turn up to vote,
according to the ComRes survey, with
around two-thirds of the capital say-
ing they will definitely be at the bal-
lot boxes in May.
BY MARION DAKERS
POLITICS
Boris extends mayor lead

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The Capitalist
16
EDITED BY HARRIET DENNYS
Got A Story? Email thecapitalist@cityam.com Follow The Capitalist on Twitter: @dennysharriet
MORE NEWS
ONLINE AT
@
@
www.cityam.com
LUKE JOHNSON ENDORSES LAUNCH
FOR THE CITYS BEST-CONNECTED
ARE YOU fed up with receiving
endless invitations to connect
with people you have never met
on digitally promiscuous social
networking sites?
Then Ndoorse, the new net-
work for high-quality profession-
als founded by ex-Deloitte
strategy consultant Jeremy Weil
and JC Rathbone director Kristian
Rathbone is perhaps for you.
The only problem is that the
City-meets-entrepreneurs network,
billed as an old boys club for the
twenty-first century, is so exclu-
sive that you can only become a
member through several endorse-
ments from existing members
hence the name.
People will be turned down,
said a gatekeeper for the invitation-
only site, which last night held the
first of its real-life networking spin-
offs at the Adam Street club, where
serial entrepreneur Luke Johnson
addressed Ndoorses founding
ambassadors from firms including
Goldman Sachs, Bain, Nomura and
KPMG. LinkedIn beware.
COCKTAIL LIST
EVERYONE in the restaurant of
the Jumeirah Carlton Hotel is
married. Just not to each
other, says the hotels general
manager Derek Picot, who has
launched a Just Good Friends cock-
tail menu in tribute to his
paparazzi-attracting clientele.
Christine Keeler, a former visi-
tor to the Carlton hotel who first
coined the just good friends get-
out clause, inspired the tequila-
based The Keeler, while John
Prescotts companion was the
muse for The Tracey Temple. The
latest addition, amusingly, is The
Werritty, after ex-defence secre-
tary Liam Foxs good friend Adam.
Make of that what you will.
POWER STRUGGLE
LAST year George Osborne topped
GQ magazines annual listings of
the 100 most influ-
ential men in
Britain; this
year the
chancellor
has slipped
to a lowly
eight.
S o
how to explain the sudden fall from
grace? Less to do with the stuttering
economy, The Capitalist suspects, and
more about Osborne calling GQ
readers unprintable names at the
magazines Men of the Year awards
in September. Even Daily Mail
owner Viscount Rothermere is high-
er up the pecking order.
MARKET FORCES
THE worshipful companies of laun-
derers, feltmakers, scriveners and
gardeners have set out their stalls
at the Red Cross Christmas Market
at the Guildhall; now they just
need the City to come along and
start their Christmas shopping.
The market was declared open
at last nights preview evening
by the Lady Mayoress and
Downton Abbey creator
Julian Fellowes (pictured
with his wife Emma), ahead
of the public day today,
open from 10.30am
until 8pm. Entry is
5 on the door,
which includes
a glass of wine
to help you
spend more
freely for the
Red Cross
c h a r i t y
cause.
Risk Capital
Partners chairman
Luke Johnson
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INVESCO Perpetuals Neil Woodford
was last night left to rue his decision
to back insurance tycoon Mark
Byrnes move to take control of
Omega Insurance, the company in
which Woodford has a near 30 per
cent shareholding.
Byrne has tendered for a 25 per
cent stake in the struggling group at
a price of between 70p and 83p, with
many shareholders expecting a price
at the top of that range.
But with just two days before the
closing deadline for the tender,
Byrnes backers have been signalling
that there is every chance he might
try to negotiate a new lower offer.
Omega announced disappointing
third quarter results at the end of last
week and spooked the markets by say-
ing it needed higher reserves for past
catastrophes. The companys net tan-
gible assets have since fallen from
84p to 75p a share, giving Byrne
ammunition to lower his offer price.
Byrnes tender offer has always
been subject to certain regulatory
clearances, some of which have not
been made, leaving him the option of
lapsing his bid later this week.
He would then be free to come in
again with a lower offer or walk away
altogether. Some shareholders, but
not Woodford, were always keener on
a full bid from rival Canopius at 84p a
share.
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BY DAVID HELLIER
INSURANCE
News
MORE NEWS
ONLINE
@
www.cityam.com
DODD-FRANK ARCHITECT TO STEP DOWN
Barney Frank, the Democrat responsible for the Dodd-Frank Act on financial reform, is to
retire from Congress next year. Frank, who was first elected in 1980, said new boundary
changes and his desire to write and teach more had led to his decision. He is one of the
Democrats biggest defenders of Wall Street regulation, at a time when many
Republicans are pushing to relax financial laws.
LONDONS house prices slid in the
month to the end of October, at last
joining the falling trend across the
rest of England and Wales, figures out
yesterday from the Land Registry
revealed.
Average prices in the capital fell 1.6
per cent from 345,870 to 340,308 in
the month to October, up just 0.3 per
cent from 339,263 this time last year.
Nationally, the average house cost
159,999, down 3.2 per cent from
165,246 in October 2010. On a
monthly basis, prices are down 0.9 per
cent on Septembers 161,461.
Meanwhile, nationwide figures
from Hometrack, also out yesterday,
put the annual decline at 2.3 per cent
a slow and steady fall, as prices fell
in each of the last 16 months.
While demand may have fallen for
the last four months in a row there
has been no significant acceleration
in price falls, which is at odds with
consumer confidence, said
Hometracks Richard Donnell.
Growth in supply has been slow-
ing over recent months and together
with low turnover this is supporting
pricing levels.
However, demand is likely to con-
tinue to fall in the run up to
Christmas, keeping the
supply/demand balance in negative
territory. As a result we expect to see
an acceleration in price falls in the
months ahead, he added.
CONFIDENCE is plummeting among
businesses, leading to falling invest-
ment and increasing the risk of an
economic contraction, according to
surveys published yesterday by
Barclays Corporate and by Lloyds
Bank corporate markets.
Lloyds business barometer showed
a net balance of 20 per cent feel pes-
simistic about the future, up from 15
per cent in Octobers study.
Meanwhile a separate study from
Barclays revealed 43 per cent of busi-
ness leaders have shelved plans to
invest because of market turmoil.
Only one third believe the govern-
ment can drive an economic recovery,
whilst another third see the crisis as
too global for the government to
resolve.
It is clear that UK corporates
believe the economic recovery is not
going to be government led, said
Barclayss Ian Stuart.
Businesses accept they have to
compete their way to better times.
Firms doubt government
can boost low confidence
UK ECONOMY
THE BANK of Englands financial poli-

cy committee (FPC) is examining the
impact of a European credit crunch on
UK banks, governor Sir Mervyn King
warned yesterday.
King blamed much of the UKs cur-
rent and expected economic woes on
the Eurozone crisis.
He told the Treasury Select
Committee that only transfers from
financially sound governments to
those with debt problems could help
to solve the sovereign debt crisis in the
short term. Markets are looking for
other governments to provide the
transfers, he said.
In the longer term, he believes that
only structural changes can help
embattled economies.
The Bank of England governor also
stressed the importance of achieving
long-term growth in the UK.
This is not a time to fine-tune, he
said, but to think about the next six
or seven years.
In his written submission to the
committees, Sir Mervyn stressed the
need to continue the process of rebal-
ancing and deleveraging.
However, he later conceded he had
no idea of the timescale on which
this would take place.
The Bank of Englands Paul Fisher
restated the view that the quantitative
easing programme may be extended
in February if economic conditions
continue to deteriorate.
King warns
of a credit
crunch risk
EUROZONE
London house
prices join fall
in rest of UK
BY TIM WALLACE
UK ECONOMY
News
Bank governor Sir Mervyn King warned of the risks to the UK Picture: PA
German insurer set to test new issues market
T
HERE is some positive news
from Hannover, where Talanx
Group, Germanys third largest
insurance entity, is considering
a flotation.
According to sources, theres
already been a beauty parade of
potential advisers and a timetable
should follow in short order.
Theres one adviser in situ;
Rothschild has been appointed to
advise Talanx on the sale.
The task for advisers such as
Rothschild often referred to as pri-
vate equity advisers because they try
to get top dollar for private equity sell-
ers has become ever more difficult
in the past couple of years because of
a growing distrust amongst investors
about their role after a series of
underwhelming new issues.
Possibly the worst of these was
Pandora, the jewellery group, whose
shares sank months after floating on
the Danish stock market only to suf-
fer the ignominy of later putting out
a couple of profit warnings.
Like London, the German new
issues market has been pretty dor-
mant, hit by the Eurozone crisis, gen-
eral stock market volatility and
depressed share prices.
Earlier this year a number of issues
were pushed back, including one that
Goldman Sachs had fought hard to
attach itself to.
When Essen-based Evonik
Industries said it was interested in
floating, none other than Lloyd
Blankfein, the Goldman CEO, person-
ally turned up to the pitch to be cho-
sen on the syndicate for what would
have been one of Germanys biggest
listings in recent years.
With Talanx having premium
income of about 23bn in 2010, the
company is the third-largest insur-
ance group in Germany and the
eleventh-largest in Europe. It employs
around 18,000 employees and also
owns 47 per cent of Hannover Re, the
major insurance group.
Some investors might think that
should they want to have exposure to
Hannover Re, they might do better to
buy shares in it directly.
Talanx will be looking to raise
around 1.5bn in new capital to pro-
duce a valuation of 4-5bn.
In short, the Talanx flotation could
be a difficult sell, mainly because any
new issue is hard work in current
markets.
But that wont stop a stampede
from investment banks wanting to
get involved.
david.hellier@cityam.com
Follow me on Twitter @hellierd
INSIDE TRACK
DAVID HELLIER
ANALYSIS l London house prices have performed strongly - until now
%
A
n
n
u
a
l c
h
a
n
g
e
in
p
r
o
p
e
r
t
y
p
r
ic
e
s
England and Wales
10/2006 10/2007 10/2008 10/2009 10/2010 10/2011
20
15
10
5
0
-5
-10
-15
London
I dont think they should strike over pensions.
They wont get a better deal anywhere else.
Even if their pensions will be slightly less now
than before, they are still good, and they are
state guaranteed.
ANDREW FIELD | TOM JAMES UK
The strikes present a bad image to other coun-
tries. Just because we have a right to strike, it
doesnt make it right to strike. If everyone striked
about every grievance, the world would-
nt function.
ROXROY DUNKLEY | POOLIA UK
The strikes are a bit pre-emptive on the basis that they are still in negotiation with the government. But I dont think this will
have too negative an impact on how the UK is perceived. Other countries are in similar positions.
SIMON BROWN | NORTHLAND CAPITAL PARTNERS
www.RateSetter.com Customer Phoneline: 08442490115
In association with RateSetter: A better way to Save and Borrow, Peer to Peer
* These views are those of the individuals above and not necessarily those of their company.
CITY VIEWS: HOW DAMAGING WILL THE STRIKES BE? Interviews by Lauren Davidson
Bookings have returned to normal after Qantas staff returned to work
MINER Randgold Resources has cut
its 2011 production target for the sec-
ond time this year after a perfect
storm of difficult mining condi-
tions, work stoppages and a mill
breakdown at its Tongon mine in
Ivory Coast.
The cut to 690,000-700,000 ounces
for the year from previous, already
trimmed guidance of 740,000-760,000
ounces sent the gold miners shares
tumbling 7.9 per cent.
Analysts had previously been
expecting an output boost in the last
months of the year after the West
Africa-focused miner predicted a
record quarter.
The FTSE 100 gold miner blamed
tough third-quarter conditions at
Tongon that persisted into the fourth
quarter, including wet weather and
mining through harder transitional
ore.
Workers separately downed tools as
the firm negotiated an agreement
with a newly established union.
Randgold was also hit by a mill fail-
ure as well as hurdles with its expect-
ed connection to the power grid. Its
Loulo mine in Mali, meanwhile, has
experienced lower than forecast pro-
duction, though the complex is mak-
ing significant progress towards
getting back in line with its fourth-
quarter production forecast,
Randgold said.
Looks to be a perfect storm at
Tongon, Numis analysts said in a
morning note, adding they now
expected cost guidance, previously at
$600 per ounce, to be hit significant-
ly.
We had been sceptical on the pre-
vious guidance, particularly on costs,
and currently have full-year numbers
of 733koz at $690/oz in our model ...
Randgold had originally hoped to
keep its cash costs per ounce below
$600 for the year, but are still above
$700.
GLOBAL miner Rio Tinto yesterday
warned on that further cracks may be
emerging in global commodities mar-
kets as the economies of Europe and
the United States waver, with its cus-
tomers increasingly cautious on the
outlook.
Prices of iron ore, copper and alu-
minium -- among Rios biggest
income earners -- have tumbled by
more than 20 per cent each since
August as stockpiles of unused metal
swell in warehouses from Rotterdam
to New Orleans to Shanghai.
Rio chief executive Tom Albanese
said stresses in the Eurozone and a
weaker outlook for the US economy
were affecting customer sentiment,
For the near term I am concerned
about the general softening of prices
when we continue to see cost escala-
tion he said.
Rios comments broadly matched
rival BHP Billiton, which warned that
some buyers were facing tighter
access to credit.
Rio Tinto joins BHP Billiton in warning
over weaker demand as economies dip
US oil company Anadarko Petroleum
said yesterday its major gas finds in
offshore Mozambique were around
twice as large as it earlier thought,
adding support to hopes that East
Africa will become another major gas
production centre.
Anadarko said yesterday that the
results of its Barquentine-3 appraisal
well showed its fields had recoverable
reserves of 15 to over 30 trillion cubic
feet (Tcf) of natural gas compared to
total UK gas reserves of 9 Tcf, accord-
ing to the BP Statistical Review of
World Energy.
This could be one of the most
important natural gas fields discov-
ered in the last 10 years, said
Anadarko chairman Jim Hackett.
Previously, Anadarko said the
fields, in which Japans Mitsui & Co
and Dublin-based Cove Energy have
stakes, held at least 10Tcf of gas. It
said the results supported its plans to
build a liquefied natural gas export
facility in Mozambique.
Anadarko doubles its gas
forecasts in Mozambique
ENERGY
AUSTRALIAS Qantas Airways yester-

day flagged a fall in first half profits of
at least 50 per cent as a series of
strikes, the grounding of the fleet and
high fuel bills take their toll.
But the airline, which suspended
all flights for two days last month in a
drastic attempt to force a resolution
with unions, soothed investors by
indicating the move had paid off,
with international forward bookings
back to normal.
Qantas said the second half outlook
remained volatile given global eco-
nomic uncertainty, fuel prices and for-
eign exchange rates.
It also denied a media report that a
plan to set up an Asian premium air-
line, seen as key to turning around
the loss-making international opera-
tions, was set to be dropped.
For us investors, this year expecta-
tions are low. Our focus is entirely on
how the recovery is shaping up, plans
for the Asian hub. So far that looks
positive, said David Liu, head of
research at ATI Asset Management,
which owns Qantas stock.
Qantas shares, which briefly fell
after the announcement, recovered to
close up 3.4 per cent at $1.50.
The airline said it expected an
underlying profit before tax of
between A$140m (89m) and A$190m
in the six months to December.
That compares with A$417m a year
ago and a A$250m average in a straw
poll of three analysts.
Since the termination of industrial
action by industrial umpire Fair Work
Australia we have seen customers
return to Qantas, chief executive
Alan Joyce said in a statement.
With both Qantas and the three
unions involved submitting to the
industrial umpire for a forced settle-
ment the threat of service disruption
has vanished.
Walkouts dent Qantas profits
BY HARRY BANKS
AVIATION
Randgold hit
by output fall
from strikes
BY JOHN DUNNE
MINING
BY HARRY BANKS
MINING
News
NEWS | IN BRIEF
Experian buys fraud expert
Experian, the credit checking business,
yesterday said it had agreed to buy
192business for an undisclosed amount.
192business which provides services
such as personal data verification, fraud
screening, online document verification
and voice verification posted revenue
from continuing operations of $11m
(7.1m) in the year to 31 March and has
gross assets of $9m. The firm will be
acquired from its founding shareholder,
senior employees and private investors
using funds from Experians existing
cash resources. It will be subsumed into
Experians Decision Analytics business
line.
WS Atkins wins 65m road deal
Design and engineering firm WS Atkins
said it has won a contract worth over
65m to improve Dohas roads and
drainage systems, as Qatar steps up
infrastructure improvements ahead of
the 2022 soccer World Cup. Atkins,
which helped design the London 2012
Olympic site and operates across Britain,
Europe, North America, Asia and the
Middle East, said the deal was one of
four packages of work awarded by
Ashghal, the Public Works Authority of
Qatar. We have targeted investment in
our Middle East business to build the
breadth and depth of our expertise in
the regions key growth markets. This is
now paying off, as we can see from our
success with Ashghal, Atkins chief
executive Uwe Krueger said.
ITE expands in Ukraine
Exhibitions group ITE has snapped up a
raft of small Ukrainian exhibitions with
the acquisition of Autoexpo, it said yes-
terday. ITEs chief executive officer
Russell Taylor said: The addition of this
portfolio of exhibitions to ITEs
Ukrainian business is consistent with our
strategy of building market leading posi-
tions in core markets and sectors.
ANALYSIS l Rio Tinto PLC
p
3,200
3,150
3,100
3,050
3,000
3,164.00
28 Nov
ANALYSIS l Randgold Resources Ltd
p
6,900
6,800
6,700
6,600
6,500
6,400
6,300
6,200
6,240.00
28 Nov
BRITISH electronics group Laird said
yesterday its chief executive Peter Hill
would step down immediately due to
ill health, but it kept its outlook for
the full year.
Chairman Nigel Keen will take on
the role of executive chairman while
the company searches for a new chief
executive.
The company also formed an exec-
utive committee reporting to Keen,
which it said would assume day-to-
day operational responsibilities.
Laird also said it expected to meet
its 2011 earnings outlook of 16p per
share, which was announced in July.
The firm employs some 9,000 peo-
ple in operations in North America,
Europe and across Asia. It is head-
quartered in London.
Hill, who had been chief executive
since 2002, previously worked for
Invensys and BTR. He also holds a
non-executive directorship at
Cookson.
The firm said: Peter has given con-
siderable service to Laird over a num-
ber of years and has helped transform
the business into what it is today a
technology leader in diverse markets,
supporting blue-chip customers
worldwide.
Laird shares rose 6.5 per cent.
BY JOHN DUNNE
ELECTRONICS
Laird chief executive Hill

steps down over illness
Lairds chief executive Peter Hill is stepping down due to ill health
Thursday 1 December
WINTERS
m
o
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t

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a
n
t
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R
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I
S
S
,

J
U
B
I
L
E
E

P
L
A
C
E

|

R
E
I
S
S

W
O
M
E
N
S
W
E
A
R
,

C
A
B
O
T

P
L
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With discounts of up to 30%, Winters Most Wanted
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Choice (exclusions apply), Crabtree & Evelyn (on purchases of 30 or more),
David Clulow Opticians, Dune, Fiorelli, Gant, Hackett, Hobbs,
Jaeger London Menswear, Jaeger London Womenswear, Jones Bootmaker,
Karen Millen, Kurt Geiger, L.K.Bennett, Levis (excludes 501 range), Oasis,
Phase Eight, The Rejuvenation Clinic & MediSpa (services only),
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*Correct at time of print, terms and conditions apply to individual store offers.
News
RETAIL investors were warned in the
strongest terms not to invest in highly
risky death bonds by the finance
watchdog yesterday, in a bid to stop a
repeat of the Keydata collapse in 2009
in which 30,000 investors lost 450m.
The Financial Services Authority
branded the so-called death bonds,
otherwise known as traded life policy
investments, toxic and completely
unsuitable for most UK retail
investors because of their complex
structure and high risk of losses.
Death bonds are created by packag-
ing up and selling on bundles of life
insurance policies sold in countries
such as the US and bought off their
original policyholders.
They pay out a return based on how
soon the policyholders die, but gener-
ate very poor returns when the hold-
ers live longer than expected.
We are issuing a strong warning to
the industry not to market these prod-
ucts to UK retail investors. Ultimately
we aim to ban TLPIs from being mar-
keted to UK retail investors, and we
intend to consult on this next year to
help erase the risks they pose, said
FSA managing director Margaret Cole.
The FSA likened some of the bonds
on offer to fraudulent investments.
In some models, yields are prom-
ised to previous investors, which can
only be sustained by using new
investors money, so the model in
effect borrows from itself and there-
fore appears to share some of the char-
acteristics of a Ponzi scheme, it said.
The market for death bonds is esti-
mated at 1bn in the UK but the FSA
has warned repeatedly since February
2010 that the instruments and the
companies that sell them can both
put investors at risk.
The bonds fall into the area of struc-
tured products, the same area that
brought down Keydata Investment
Services, which invested in a
Luxembourg-based company, SLS that
in turn invested in US life products.
City investment managers
expressed outrage after being hit with
a 326m levy from the Financial
Services Compensation Scheme this
year after compensating its victims.
There is unlikely to be much dis-
agreement with the proposed ban
from those firms still reeling from the
extra FSCS costs arising from the key
data failure where these investments
were used, said Bruno Geiringer,
insurance partner at Pinsent Masons.
IN RECENT years it has been seen as
the preserve of affluent Britons, Arab
sheiks and Russian oligarchs.
Now, however, more top London
property could be snapped up by Far
Eastern investors, including perhaps
the Chinese Communist Party.
Cordea Savills, the fund manage-
ment arm of consultancy Savills, has
launched a 150m fund that will buy
prime London homes, giving Asian
investors an alternative way to invest
in the sector. The fund is aimed at
institutional investors and super rich
individuals in the East and West but
is expected to benefit from the strong
Asian interest in London.
Indications of interest have been
strong so far, particularly from
Chinese buyers, said Brian DArcy
Clark, Cordeas head of residential
acquisitions. The property slowdown
in the Chinese property market is
forcing fund managers to look abroad
for stronger growth.
Theres very good evidence that
Chinese investors want to invest in
London and theres pent-up demand
from high-net-worth individuals from
China to come into London, Clark
said.
The fund, which closes in January,
will invest in London property by
forming joint ventures with develop-
ers and by committing to acquire
apartment units before construction
to get better prices, Cordea Savills
said. It expects to see net returns of
about 18 to 20 per cent a year.
Top London property set for Chinese
takeaway in new Cordea Savills fund
THE FORMER chief executive of
Liontrust Asset Management is pio-
neering an asset management busi-
ness model that will waive fees if its
funds fail to beat benchmarks, as cost-
conscious clients start to balk at hefty
fund charges.
Nigel Legge, who ran Liontrust
before stepping down last year after
the firm lost most of its assets, will
launch his new partnership
Vinculums first fund in January.
The IM Vinculum Global Equity
Fund will charge investors a 0.25 per
cent annual operating charge and
then 20 per cent of performance over
the funds benchmark. Funds tradi-
tionally charge an annual manage-
ment fee regardless of how they
perform relative to a benchmark.
Legge, 53, founded Liontrust in
1994, taking the company public and
growing its assets to more than 5bn
before the exit of two star managers
in 2009 sparked an outflow of client
money.
Ex-Liontrust chief Legge
roaring back into action
FUND MANAGEMENT
THE AUDITORS of troubled medical

recruiter Healthcare Locums are to be
investigated by regulators for their
role in the accounting scandal that
nearly destroyed the company.
The Accounting and Actuarial
Disciplinary Board (AADB) said it had
launched an investigation into the
conduct of certain members of the
English, Welsh and Scottish chartered
accountancy institutes and BDO, the
firm that audited HCL.
The probe will focus on accounts
between 2008 to 2010 to determine
whether there is evidence of miscon-
duct on the part of members or mem-
ber firms of the accountancy and
actuarial professional bodies, HCL
said in a statement.
HCL shares were suspended in
January after it discovered severe
accounting irregularities that led to
its founder Kate Bleasdale being
forced to resign. The company was
forced to raise 60m in an equity
placement in September to stay afloat.
New Healthcare Locums
probe to include auditors
SUPPORT SERVICES
SHARES in Patsystems, a supplier of

derivatives trading technology,
jumped almost 30 per cent yesterday
after its biggest shareholder came for-
ward with a bid valuing it at 29m.
Patsystems admitted it had been
hit hard by the shock collapse of US
broking group MF Global, its biggest
customer, in October.
But it welcomed the 14p per share
offer from ION Trading, its biggest
investor with a 27.9 per cent stake.
The offer was at a 27 per cent premi-
um to its closing price on Friday.
The board acknowledges the com-
panys strong commercial fit with
ION, their greater financial stability,
as well as the potential benefits to
staff, customers and product develop-
ment, it said in a statement.
Patsystems said MF Globals melt-
down would reduce its revenues and
so profits by 500,000 this year, while
more than 900,000 of its money was
tied up in MF Global when it filed for
bankruptcy protection.
It said the wind-up process was
impacting the release of client funds
to enable MF Globals customers to
migrate to new platform providers
and hence to resume trading.
Patsystems said it had checked how
financially stable the rest of its clients
were and set aside between 600,000
and 1.3m against two in particular.
Patsystems gets 29m offer
BY ALISON LOCK
CAPITAL MARKETS
Death bonds
blasted over
losses danger
BY ALISON LOCK
REGULATION
BY PETER EDWARDS
FUND MANAGEMENT
DEATH BONDS
Q.
WHAT ARE DEATH BONDS?
A.
Also known as traded life policy
investments, death bonds are
securitised portfolios of life insur-
ance policies usually issued in coun-
tries such as the US and been sold
ahead of the policyholder dying. An
investor can pay a policyholder a
lump sum and agree to keep paying
the premiums on the policy for them
if they can collect the final
payment and the profit they gain
from the investment is higher the
sooner the original holder dies. The
bonds are a form of bet on the lifes-
pan of the policyholder, but returns
can disappear as people live longer.
Q.
WHY ARE THEY
RISKY?
A.
Advocates of the
bonds claim they are a good way
to avoid the movements of equity or
bond markets, as the returns are sta-
ble and uncorrelated. But a series of
scandals involving UK investors, such
as Arch Cru, Keydata and ARM Asset
Backed Securities lost millions from
selling or investing in life insurance
backed products. The FSA said sever-
al it saw behaved like Ponzi schemes,
where yields promised to investors
could only be funded through new
investors capital. Frequently based
abroad, the funds are also hard to
track and regulate.
Q A
&
ANALYSIS l Patsystems
p
14
13
12
11
10
12.73
28 Nov
FINANCIAL sector takeover specialist
Resolution said the chief executive
and finance director of its British
insurance consolidation vehicle are to
cut their working week by 40 per cent
as the group focuses its efforts on
new projects outside the UK.
Chief executive John Tiner and
finance chief Jim Newman, who are
also shareholders in the business, will
work three days a week on average,
Resolution said yesterday. Resolution
is increasingly focused on new ven-
tures that could include buying
European or US closed life funds and
asset managers.
The pairs scaled-back working
hours come as Resolution prepares to
usher in new rules allowing
Resolution Operations, its Guernsey-
based M&A unit, to work with other
investment vehicles, ending an exclu-
sive relationship that has been in
place since the group was created in
2008.
Resolution shareholders, who are
scheduled to vote on the new rules on
13 January, have asked the company
to segregate the returns from its UK
life acquisitions by carrying out any
other consolidation projects through
separate investment vehicles.
Resolution, founded by insurance
tycoon Clive Cowdery, had originally
intended to carry out its UK life insur-
ance consolidation project and all
subsequent ventures through the
same London-listed entity.
Two Resolution
chiefs cut work
week by 40pc
INSURANCE
FSA managing
director Margaret
Cole has warned
against investing
in death bonds
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News
THE CHAIRMAN of Charter
International, the engineering group
that roused its shareholders anger
during a 1.5bn takeover battle in
August, has hit out at fund manag-
er Richard Buxton for criticising
the deal.
Lars Emilson (right) attacked
Buxton, head of UK equities at
Schroders, for his outspoken
views on the sale process.
Charter rebuffed two
offers from turnaround
investor Melrose in favour
of a higher bid from
smaller US rival Colfax,
but was heavily criti-
cised by long-only share-
holders who held
Melrose shares and saw
a chance to continue to
invest in Charter after a
sale.
Emilson accused Buxton of destroy-
ing more than he achieved in an
interview at the weekend.
I can think of various scenarios
where Mr Buxton more or less affected
this process negatively... he might
have given Melrose the impres-
sion that it didnt need to bid
more, he said.
We knew all along what the
value of the company was. Mr
Buxton didnt.
Buxton responded
that Schroders had
been a Charter share-
holder longer than
Mr Emilson had
been chairman.
As for [our
move] being
unhelpful or
destabilising, I
reject that, he
said separately.
Charter chair
vents ire over
Schroders
Sign up at cityam.com
BY ALISON LOCK
INDUSTRY
THE HOME of part of Richard

Desmonds media empire has been
sold by Standard Life for 12.2m.
Standard Life Investment Property
Income Trust has sold the Northern &
Shell Tower, an office block in the
Docklands, to a private buyer.
Desmonds rental contract will run
until 2022 as planned at the previous-
ly agreed 909,000 a year. The build-
ing holds the offices of Portland TV,
the broadcasting arm of Northern &
Shell, and other TV and print divi-
sions of the Desmond-controlled
media group.
The office building was the
Standard Life funds third-largest
property, valued at between 10m
and 12m at the end of last year.
Jason Baggaley, the funds manag-
er, said the proceeds of the sale will
be reinvested in early 2012.
Richard Desmonds office block
in the Docklands sold for 12m
PROPERTY
We want to
participate in the
growth of Howden
over the next five
years... We would
vote against any
efforts to sell it
It is dis-
appointing that
the opportunity
was not taken by
the Charter
board... to engage
with Melrose
We regard it
as a victory for
short-termism
and a defeat for
shareholders
with a long
term... horizon
Schroders fund
m a n a g e r
Richard Buxton
criticised the
behaviour of
Charter after it
was approached
by Melrose and
Colfax
Aberdeen Asset Management
The fund manager has appointed Mark
Parry as a senior investment manager in
its multi-asset team to help manage the
teams range of pooled funds, including
the new Aberdeen Diversified Growth
Fund. Prior to joining Aberdeen, Mark
was managing director and head of
fixed income at Close Asset
Management.
Orange Business Services
Sbastien Jaouen has been appointed as
head of global sales for the trading com-
munity services business at TCSnet, the
Orange Business Services electronic
trading network. Prior to joining the
company three years ago, Jaouen was
managing director, Benelux for GL
Trade, part of the SunGard Group.
Ratesetter
The peer-to-peer finance website
Ratesetter.com has appointed Hugh
Garmoyle and Mark Davies as non-exec-
utive directors. Garmoyle was formerly
managing director and head of UK &
European sales at JP Morgan Cazenove,
and Davies was part of the founding
management team at Betfair.
Wilkins Kennedy
Ian Ross has been appointed as a direc-
tor in the accountancy firms Reading
office. He moves from RSM Tenon,
where he was office managing director.
Eversheds
The law firm has appointed ex-Norton
Rose corporate partner Virginie
Deslandres to lead the China practice in
the Paris office. Deslandres, who has
been working in China for over 25 years,
specialises in advising French and
European companies across Asia.
IIGCC
The Institutional Investors Group on
Climate Change has appointed Donald
MacDonald as chairman. MacDonald is
a trustee director of the BT pensions
scheme and a former chairman of the
United Nations Principles for
Responsible Investment.
Yule Catto & Co
Dominique Fournier will join the board
of the chemical manufacturer as an
independent non-executive director on 1
January 2012. Fournier will retire from
his current role as CEO of Infineum
International at the end of 2011.
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
US stocks lifted by
strong retail sales
U
S stocks rebounded from seven
days of losses yesterday as
investors used the latest effort
from European leaders to
resolve the regions debt crisis as an
opportunity to cover short positions.
Trading was light, a sign scepti-
cism remains high. Just 6.2bn shares
changed hands during the day on US
exchanges, well below the daily aver-
age of 8bn shares.
Retailers were among the strong
sectors following an robust start to
the US holiday shopping season.
Record sales over the Thanksgiving
weekend buoyed gains in large retail-
ers, including Macys, which rose 4.7
per cent to $30.84.
The gains follow a seven-day string
of losses on the benchmark S&P 500.
The latest attempt to get the
Eurozone problems on the path to
improvement involve a Franco-
German push for tighter budgetary
control over Eurozone members.
Analysts say the move may not be
followed by more buying without an
actual plan for Eurozone help.
Unfortunately, these rallies are
short-lived until real dollars or real
euros are injected into the financial
system, said Chad Morganlander,
portfolio manager at Stifel, Nicolaus
& Co in Florham Park, New Jersey.
Germany and France pushed to
acquire powers to reject national
budgets in the Eurozone that breach
European Union rules ahead of an EU
summit on 9 December.
An Italian newspaper report sug-
gested the International Monetary
Fund was preparing a rescue plan for
Italy, but the IMF denied the report.
The Dow Jones industrial average
was up 291.23 points, or 2.59 per
cent, at 11,523.01. The Standard &
Poors 500 Index was up 33.88 points,
or 2.92 per cent, at 1,192.55. The
Nasdaq Composite Index was up
85.83 points, or 3.52 per cent, at
2,527.34.
All 10 S&P sectors were up sharply,
but energy and consumer discre-
tionary stocks were among sectors
with the biggest gains.
The S&P energy index was up 3.6
per cent, while the S&P consumer
discretionary index was up 3 per cent
and S&P financials rose 3 per cent.
Weak consumer spending has
been a worry for investors, and the
holiday period would likely confirm
whether theres been any improve-
ment in that area.
A report on consumer confidence
in November, which is expected to
have risen, is due today.
The S&P retail index advanced 3.1
per cent, including Best Buy, which
added 3.4 per cent to close at $26.49.
B
RITAINSS top share index ral-
lied yesterday as financial and
basic resources stocks
advanced, helped by hopes that
Eurozone leaders were moving closer
to action to stem a debt crisis in the
region.
Londons blue chips added 148.11
points in its second consecutive day
of gains after nine straight sessions of
declines, as equities across Europe
and the United States rose and yields
on distressed Eurozone bonds
declined.
The rally was triggered by an
unsourced report in Italian daily La
Stampa, which suggested the
International Monetary Fund was
preparing a rescue plan for Italy
worth up to 600bn (515.5bn). This
was later dismissed by an IMF
spokesperson.
[The FTSE] is coming off oversold
level and given the denial of rumours
that the IMF was going to get
involved, Im a little bit surprised
with the strength of the rebound,
Gerard Lane, investment strategist at
Shore Capital, said.
Londons blue chip gauge broke
through the 38.2 per cent Fibonacci
retracement of the July high to
August low, as it extended a bounce
after closing above the 23.6 per cent
support on Friday.
Banks and miners, which suffered
some of the worst losses during the
recent sell-off, led the charge yester-
day, adding 28.4 points and 24.4
points to the FTSE 100.
Miners were also supported by pos-
itive comments by Nomura, which
argued the sector had been hit too
hard in the macro sell-off, driven by
global growth worries.
Shore Capitals Gerard Lane main-
tained a defensive approach but high-
lighted that certain perceived safe
havens such as food producers are
overvalued, while cyclicals including
mining and consumer discretionary
stocks appear cheap.
Miners have become underval-
ued, but without an easing in policy
from China, earnings downgrade
may outweigh the valuation appeal
for that sector, he said. He recom-
mended instead media stocks with
international earnings, such as
Pearson or Reed Elsevier, up 2.1 per
cent and 2.6 per cent, respectively.
Weir rose 8.3 per cent to top the
blue-chip gainers chart as Barclays
Capital became the latest of a string
of brokers raising their price targets
on the maker of pumps and valves,
following the acquisition of shale gas
specialist Seabord Holdings last week.
Randgold, down 7.9 per cent, was
the only blue chip to close in the red
after the gold miner cut its output
target due to a series of problems at
its Tongon mine in the Ivory Coast.
While stocks rebounded, strategists
remained wary of going back into the
market until there is certainty that
decisive action is being taken to stem
the Eurozones debt crisis.
Its a market I would sell, like I
have been doing since August. If you
had bet on political events for the past
two years, youd have gone bankrupt a
long time ago, said Robert Quinn, of
Standard & Poors Capital IQ.
In a sign of the urgency of the
Eurozones situation, Moodys
warned that the rapid escalation of
the regions sovereign and banking
crisis threatens the rating of all
European government bonds.
The announcement comes as the
Eurozones second-largest economy,
France, battles to defend its triple-A
rating, a necessary condition for the
blocs rescue fund, the European
Financial Stability Facility, to main-
tain its own top-notch rating.
FTSE rallies on hopes action
is coming over Eurozone debt
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 Burberry
1,500
1,400
1,300
1,200
1,100
Sep Oct Nov
p
1,197.00
28 Nov
BURBERRY
UBS rates the fashion brand neutral with a 12-month target price of
12.50, 200p lower than its previous target after the broker examined
Burberrys margins and stripped out a potential premium from M&A activi-
ty. UBS expects costs to moderate the firms operating margins for the next
two to three years, but thinks the firm will be back to faster growth by
2015-16.
ANALYSIS l Glencore International
440
420
400
380
360
Sep Oct Nov
p
384.40
28 Nov
GLENCORE
Nomura rates the commodities group reduce and has a target price of
450p. The broker sees Glencore as expensive compared to its peers, despite
its lower asset quality and geopolitical risks. While Nomura expects the
firm to make more opportunistic acquisitions, with bigger deals possibly
requiring a capital raising, it does not see a takeover of Xstrata as likely in
the short-term. It also notes Glencores highly-leveraged balance sheet.
ANALYSIS l Invensys
275
250
225
200
175
Sep Oct Nov
p
191.50
28 Nov
INVENSYS
Citigroup has upgraded the IT group from neutral to buy and has raised
its target price by 10p to 235p. The broker sees a positive shift from the
firms recent trading news in rail, and thinks Invensys poor share perform-
ance is due to fading M&A speculation, a lack of progress on its pensions
buy-out and a bad wider market. Citi thinks the recent share price drop
means there is only upside risk for the firm.
p
23Sep 5Sep 13Oct 2Nov 22Nov
5,800
5,000
5,200
5,400
5,600
ANALYSIS l FTSE
5,312.76
28 Nov
Northgate Information Solutions
The outsourcing group has appointed Adel Al-
Saleh as chief executive to replace Chris Stone,
who is leaving the firm. Al-Saleh previously
spent five years at IMS Health, a technology-
based analytics and services company for the
healthcare industry, where his roles included
president of EMEA and senior vice president of
global pharma solutions. Prior to joining IMS
Health in 2007, he spent 19 years at IBM, work-
ing his way up to vice president, EMEA sales
and services personal systems group.
News
T
ODAYS sound and fury around the chan-
cellors autumn statement hides a remark-
able consensus shared by government and
opposition alike. Public spending needs to
be cut, but not by very much. Increases in tax
rates are a regrettable necessity, and any idea of
actually cutting the tax burden on working peo-
ple is out of the question. Britains fiscal deficit
may be unsustainable, but growth will fix that.
If this consensus tells us anything at all, it is
that politicians are living in a different and a bet-
ter world. For those of us living in the real one,
however, there are some uncomfortable ques-
tions that need to be asked.
For a start, where is growth supposed to
come from? Real estate, construction and
financial services thats 40 per cent of
the economy, by the way have luxuriat-
ed on the back of massive increases in
individual indebtedness. Another 19 per
cent health, education and public
administration have prospered from
the Brown binge in public spending. Add
in retailers for whom the outlook is ren-
dered grim by falling disposable incomes
and you have 70 per cent of the economy
that cannot grow now that private borrow-
ing, and growth in public spending, are
dead-letters.
Then look at where working people are
right now. Wages in the private and public sec-
tors increased by just 4.4 per cent and 8.8 per
cent, respectively, between 2007 and 2010, while
the costs of essentials have increased inexorably
(gas +27 per cent, electricity +15 per cent, water
+13 per cent, petrol +22 per cent and food +19 per
cent). Unemployment, meanwhile, is rising
sharply, particularly among young people.
What policymakers dont want you to know is
that theyve tried almost everything, without
success. As savers know to their cost, weve had
near-zero interest rates for the best part of three
years. The value of sterling has crumbled.
Governments have borrowed and spent 390bn
and counting, and the Bank of England has
printed 275bn out of thin air. Yet still the econ-
omy refuses to respond.
But there is one policy whisper it who dares
that hasnt been tried, despite a pretty good his-
toric track-record. That policy is to cut spending,
and hand money back to working people. At
Tullett Prebon, we believe that government
should cut taxes by 50bn.
Government will tell you, of course, that this
isnt possible. This is an argument that should be
subjected to the most rigorous challenge.
In real terms, government spending increased
by 53 per cent between 1999-2000 (451bn at
todays prices) and 2009-10 (688bn). Has every
single 1 of extra taxpayer spending produced a
corresponding improvement in public services?
Why must government spend 688bn today,
when it seemed to get along just fine spending
451bn ten years ago? For that matter, why has
the health service recruited 77 per cent more
managers over the last decade, but only 23 per
cent more nurses? And how is it that the
Ministry of Defence can employ more civilians
than sailors or airmen combined, but cannot
afford a single aircraft carrier?
The reality is that public service productivity
has declined alarmingly, but thats not the fault
of the front-line workforce. Most of the waste has
actually occurred in costly outsourcing and, as
Sir Philip Green has demonstrated, in absurdly
wasteful procurement practices.
For two decades, governments of both hues
have been busy dismantling the previous cen-
tralised public service structure, fragmenting
services into small units which replicate func-
tions and (no surprise here) all require highly-
paid management teams. All of this has been
done in the pursuit of the chimeras of spurious
competition and illusory user choice. The frag-
mentation of public services has been such a
shambles that Labour tried to fix it by imposing
a costly and counter-productive target culture.
The real answers are simpler, and involve
abandoning fragmentation of the public servic-
es. In the NHS, for example, re-centralise func-
tions, terminate wasteful outsourcing, scrap the
costly Trust system, and put the management of
hospitals back into the hands of doctors and
matrons.
Although we have called for 50bn of tax cuts,
weve calculated that government actually can
reduce spending by 70bn, putting 20bn of that
into a programme of building homes for rent,
and into direct (not PFI) investment in hospitals,
schools and infrastructure. Much of the saving
can be achieved from reconsolidating public
services, and the rest from eliminating the luxu-
ry of middle class benefits while tightening
the eligibility criteria such that benefits are paid
only to those in genuine need.
The aggregate of public, corporate and individ-
ual debt is far higher here than in Greece, Italy or
Spain. This debt can be supported only if the
economy grows, which manifestly it cannot as
currently configured. The way to deliver growth
is to reduce the tax burden on the small and
medium enterprises (SME) which can alone cre-
ate jobs, and to hand money back to working
people, who stand in real need of help.
Dr Tim Morgan is the global head of research for
Tullett Prebon.
28
The Forum
CITYA.M. 29 NOVEMBER 2011
We have calculated that
government actually can
reduce spending by 70bn
Theres one economic policy
the coalition has yet to try:
Spend less to boost growth
cityam.com/forum
TIM MORGAN
Agree? Disagree? Got a sharp comment?
The Forum wants you to join the debate.
COMMENT NOW ON
Twitter: @cityamforum;
on the web: cityam.com/forum;
or by email: theforum@cityam.com.
Top responses will be reprinted in The Forum.
29
Ahead of todays
mini-budget, one
MPs suggestions
for bolder action
Five ways to get
the UK economy
back in the black
I
TS time for the UK to get real. The coun-
try is deeply in debt. The coalition made
deficit reduction the prime aim of its gov-
erning agreement. It was a great idea
then. It is a great idea now. It needs delivery.
First, lets be bold with the banks. The UK
private sector needs easier access to reasonably
priced credit to fuel a private sector recovery.
Good business plans and sound projects are
difficult to fund. The broken banks are reluc-
tant to lend because the regulators want them
to be more solvent and liquid. Many companies
and entrepreneurs do not think it even worth-
while asking.
I suggest the government makes a virtue of
the continuing losses and low share price of its
holdings in RBS. It should instruct manage-
ment to prepare three new clearing banks in
the UK for sale. These banks can be construct-
ed from existing branches, staff, loans and lia-
bilities of the RBS Group. They could be called
Nat West, RBS and Coutts, or such other brand
names as the management sees fit to give
them. They should each be a sensible size, with
good balance sheets. On flotation they should
raise significant sums of new capital. We
would then have three new banks with money
to lend. The high street needs new challengers.
Some of the UK state bank risk would go. More
could follow if the government also sold
Citizens, the US bank.
Second, get these new banks to help finance
major new capital schemes with private
money. We need new toll roads, new airport
capacity, new water capacity, more broadband,
new power stations and new gas sources and
facilities. All these things can be commercial
and can be privately financed.
Third, redouble efforts to curb public spend-
ing. The government could transfer more
housing expenditure to private finance, curb
increases in overseas aid, enforce a stricter nat-
ural wastage policy on non front line posts,
and get rid of more quangos and regulatory
activity. More public sector land, buildings and
other assets should be sold, as they become
surplus.
Fourth, negotiate firmly over pension enti-
tlements. The government is right to protect
the position of the low paid staff. It needs to be
a strong defender of the taxpayers interest for
others. The private sector has had to accept
that low investment returns and longer lives
means paying more for less when it comes to
pensions. There needs to be a fairness between
public and private sectors, to make public sec-
tor pensions more affordable for taxpayers.
Fifth, cut taxes on income, effort and enter-
prise. A 20 per cent CGT rate and a 40 per cent
top income tax rate should raise more revenue
and would take rates back to the levels Gordon
Brown thought fair and appropriate for most
of his time in office. Raising tax thresholds for
the lower paid would lose revenue, and should
be paid for by some of the public spending
changes in the third proposal.
The aim is to show markets the government
has made inroads into pension and bank debt
as well as general state deficits, and to demon-
strate its main goal is to cut public sector
financial risks. The proposals would aim to get
more tax from the rich by encouraging more
enterprise, and to lessen tax on lower
income earners to stimulate demand.
John Redwood is the chairman of the
Conservative Economic Affairs Committee.
Driven too far
Osborne has always got money to
throw at euro bailouts and other
pet causes like high speed rail and
increasing overseas aid. He is
tempting fate if he introduces
road tolls to pay for infrastruc-
ture, as drivers have already been
paying many times over for road
investment that hasn't been
made. There are 33m drivers in
the UK, and that will be quite a
backlash. He should remember
that 2m signed the petition
against Blair's road pricing, and
that was before the recent drop in
standards of living.
Brian Mooney
Muzzled on pay
I have sympathy with David
Wootton [Like Terry or Lampard,
City stars are worth it, yester-
day] in arguing it is not the role
of government to set pay, but it
is also not for politicians to bail
out failing private companies
with public funds and the pri-
vate sector should not be so
greedy to swallow this largesse.
With the government increas-
ingly involved in the funding of
banks and subsidy of more of
the economy, is it so surprising
that it is also moving into
deciding how much its chief
executives get paid?
The muzzle will soon be getting
too tight to bite the hand that
feeds.
Neil Blazier
RAPID RESPONSES
JOHN REDWOOD
CITYA.M. 29 NOVEMBER 2011
The Forum
I
T IS common to
hear about the
ascendancy of
neoliberal econom-
ics. Many on the left use
it as an explanation for
the deregulation that
they blame for causing
the financial crisis. And
some argue that it is the dominant school of thought
within the economics profession. These are myths, and
I want to challenge some of them based on evidence
from one of the classic cases of supposed neoliberal
epidemics in Eastern Europe following the collapse
of communism.
Firstly, critics have a tendency to conflate neolib-
eralism with neoclassical economics, which is the
standard textbook fare. Note that neoclassical eco-
nomics, far from believing that a free market alloca-
tion of goods and services is always the most
efficient possible, has a rich theory of market failure,
and few neoclassical economists are libertarians.
Ideas such as asymmetric information, monopoly
inefficiency and welfare economics are hardly
imposed on a reluctant discipline by outsiders they
are part and parcel of Economics 101. By contrast,
there are some economists that are genuine market
fundamentalists that believe privatisation is a mat-
ter of principle not efficiency, that there should be no
government role in the provision of goods and servic-
es, and that neoclassical economics is in large part a
socialist toolkit for central planning.
Yet in Eastern Europe there is little evidence of
that sort of market fundamentalism determining pol-
icy. Organisations such as the World Bank and the
IMF are not neoliberal in any meaningful sense, and
even so their influence is often overstated. Other
organisations dominated the transition process.
Indeed, the second main myth is that the process
was imposed on reluctant locals by Western institu-
tions. This is not only patronising, it is incorrect. For
one thing, the advice of the Washington Consensus
wasnt as influential as people think. In many cases
such as the Russian hyperinflation their advice to
cut government spending was ignored. As Jeffrey
Sachs said in an interview with the LA Times: The
advice that I gave: eliminate price controls, stop sub-
sidies to loss-making state enterprises, make the cur-
rency convertible and open the economy to trade.
This kind of economic medicine produced an end of
hyperinflation and strong economic growth in
Poland, Estonia, Slovenia and other economies that I
advised. The same advice would have worked in
Russia, but it was not followed.
Where free market policies were followed, they
werent necessarily imposed from outside. Estonias
adoption of the flat tax was championed domestical-
ly by Mart Laar and was done against the advice of
the IMF. Polands Balcerowicz Plan for its transition
from communism to capitalism was not named after
an American.
I went into more detail in my 2009 book, The
Neoliberal Revolution in Eastern Europe, but that
was written primarily for academics. Sadly, most
commentators that talk about neoliberalism ignore
the academic literature. But let me simplify it for
them. If you want to know what I think of the rise of
neoliberal economics, Id reply as Gandhi did when
asked what he thought of Western civilisation: I
think it would be a good idea. If only it were true.
Anthony J. Evans is associate professor of
economics at Londons ESCP Europe Business
School, and Fulbright scholar-in-residence at San
Jose State University. www.anthonyjevans.com
If only the neoliberals
were really in charge
Email: theforum@cityam.com
Twitter: @cityamforum
In association with
BY ANTHONY J. EVANS
E
QUITY markets bounced back yesterday, but last week
was another grim period. Anyone hoping for an equity
market rally into Thanksgiving will have been severely
disappointed. The major stock indices across Europe,
the US and Asian Pacific countries all fell sharply, with many
breaking below significant support levels. From a technical
perspective, last weeks sell-off has been very damaging,
which yesterdays rally has done little to remedy.
Fundamentally, the picture remains grim, with poor manu-
facturing data from China in particular raising fears of a
resumption of a global economic slowdown. Meanwhile,
Eurozone leaders appear paralysed with fear, knowing that
they have no good choices left. The most market positive
decision they could take now is allowing the ECB to mone-
tise banking and sovereign debt a move that bails out insol-
vent financial institutions and transfers the costs to Europes
citizens in the form of a weakening currency and rising
prices.
So now we head into the final month of the year with
many investors still hoping for a Christmas rally. For that to
happen, we need to see confidence return to the European
bond market. Yields need to fall generally, while the spreads
of Spanish, Italian and French bond yields over those of
German bunds need to narrow substantially. Hopefully any
compression wont be the result of another sell-off in
German sovereign debt. Market participants remain fixated
by the euro-dollar pair. The single currency fell sharply last
week, breaking back below $1.33. Thursday saw another
downgrade for Portugal, and on Friday, Moody's cut
Hungarys credit rating to junk status. Austria one of only
six AAA Eurozone countries will feel the effects of this
downgrade due to its banks large exposure to Hungary.
Yesterday we saw a sharp rally across all risk assets.
This followed a report in the Italian press that the
International Monetary Fund (IMF) was ready to bail out
Italy. Although the IMF was quick to deny the story,
traders were forced to cover short positions in the single
currency and equities. The question now is whether this
rally is sustainable or not. But while rumours can move
markets in the short-term, they cannot change overall sen-
timent. This remains negative for now, and is likely to stay
that way in the absence of radical political change in
Europe.
HOPING FOR A
CHANGE IN
ECB POLICIES
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
Experience Binary Brilliance Visit gftuk.com/binaries or freephone 0808 208 5192
2011 Global Futures and Forex, Ltd. All rights reserved. CD03UK.168.100711
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T
HOUGH it is not a leading indicator,
the Chicago Board of Options
Exchange volatility Indix (Vix) is a
useful tool for CFD traders. As it is
much more sensitive to market down-
swings than upswings, the Vix is often
known as the fear index. Most CFD
providers allow you to take a position on
Vix futures and in doing so give you a
handy hedging tool.
The Vix is driven by options trading and
is calculated as a positive percentage and
the expected volatility of the S&P 500 over
the next 30 days. Rather than measuring
the volatility in shares, the Vix instead
measures the options market. As banks and
hedge funds start to see signs of downside
risk in the markets, they will move to miti-
gate risk by buying up options. The higher
the expected swings in price, the higher
the premiums charged by writers of
options.
The Vix will usually trend around the 15-
16 per cent area, but if there is some nerv-
ousness in the market, it will break above
that. During the uprisings in the Middle
East and north Africa this spring, we saw
the Vix hit the 30 per cent area, peaking
with the Libyan invasion over fears of a
slow down in oil supply from the area. The
index spiked again during the US debt
stalemate. And if we see another major
bank collapse or a Eurozone country
default on its debt obligations, then we will
see another big spike in the Vix. As such,
the Vix can be used as a hedge against the
S&P 500. If you think that the market is tak-
ing a complacent view to downside risk and
the Vix percentage is on the low end of the
scale, then you might choose to go long Vix.
The Vix is currently sat around the 30
mark, at the same time as a relative low in
the S&P indicating that nervous investors
have driven up the price of options. This
could be seen as a signal that we are set for
a trend reversal, with a recovery in the S&P.
The fear index is not an exact science,
but should help traders to be less scared of
volatility.
The Vix is a helpful
instrument to trade
in volatile markets,
writes Craig Drake
Trading the fear index
30
Wealth Management| Contracts for Difference
%
Libyan invasion
US debt stalemate
Feb 2011 Mar Apr May Jun Jul Aug Sep Oct Nov
45
40
20
15
25
30
35
ANALYSIS l CBOE volatility index
When the bulls are scared, the Vix goes up Picture: Getty
investment. The size of the knock-out bar-
rier is linked to the cost of the trade as
such, traders need to factor in volatility
when picking the appropriate barrier for
the trade.
The FTSE 100 dominates the top Turbo
trades in the Market Master Challenge,
with a short on the FTSE 100 with a knock-
out barrier at 5,800 the most popular, fol-
lowed by going long on the index with a
5,200, then long at 5,000.
SUPERDUPER
As with Covered Warrants and Turbos,
Super10s are traded on the LSE and so can
be bought and sold on the exchange dur-
ing trading hours. Super10s generate a
fixed payout of 10 per unit provided the
underlying doesnt touch, losing traders
their initial investment. With Super10s
you need to decide whether you expect
the underlying to stay high, stay low or
stay within a range.
So far, the SG Market Master Challenge
has gold trading in a range
between $1,500 and $2,000 as
the most popular trade,
followed by a stay high
Super10 on the FTSE
100 above 5,100, then
a stay high Super10 on
the FTSE 100 above
5,200. The most popu-
lar stay low Super 10
has also been on the
Accelerate returns in the Market Master Challenge
31
Gold will shine:
But short-term
trade tarnished
Trend traders face trouble, says Philip Salter
A
LONG-TERM bull market in the yel-
low metal has seen traders and
investors profit to a tremendous
degree. At the extremes, fiat money
adherents who dont see the metal as a
currency or store of value have clashed
with gold bugs, with the latter trouncing
the former. However, the last quarter has
tested short-term traders with a fixed view
of golds future. And although gold should
rise as the flawed, but seemingly
inevitable, logic of the monetisation of pri-
vate and public debt is playing out across
Europe, the risks of corrections in jittery
market conditions could stop out many
ultimately correct long positions.
In the long run, all fiat currencies risk
collapse gold is there to pick up the
pieces. All this talk of a break-up of the
Eurozone could see demand for physical
gold boosted, says Chris Beauchamp of IG
Markets, as people look to transfer their
savings into something more solid than a
flagging currency. Sandy Jadeja of City
Index notes that gold is back at a support
level of $1,680, which may provide a
launch pad for higher prices. Beauchamp is
bullish: On the technical view, gold,
despite everything, remains firmly above
its 200-day moving average, which there-
fore suggests a continuation (albeit with
twists and turns) in the uptrend.
However, as Angus Campbell of Capital
CFDs points out: The direction of gold in
the past few weeks confirms that it is just
as risky an asset as any other, putting
doubt on its safe haven reputation. He
notes that ever since hedge fund supremo
John Paulson started selling large chunks
of gold ETFs, the precious metals bull run
has been called into question. The
Eurozones spiralling debt crisis hasnt
always coincided with further gold buying.
Campbell says for gold to get back in
favour with the bulls we need a mixture of
increased risk appetite, with a dose of dol-
lar weakness and a fair share of uncertain-
ty. As Michael van Dulken of Accendo
Markets points out, gold has moved from
doing opposite to equities (risk-on, risk-
off), to mirroring it at some points (like yes-
terday). This is in part due to the
questioning of the safe haven status of the
dollar.
The US economy is ailing, but Europes
fate is terminal. The dollar should gain
when the politicians of Europe admit and
the forex markets face up to the unthink-
able process of the Eurozones break-up.
The courage of fiscal and monetary auster-
ity required from Europes politicians to
save the euro is beyond them. Gold will rise
with the dollar and in the heat of crisis
trading it should prove profitable. But the
false hopes between now and then with
make trading conditions choppy.
Covered Warrants, Turbos and Super10s
can all be given a thorough test drive with
Socit Gnrale, writes Matthew Crick
I
TS not too late to win prizes galore in
Socit Gnrales Market Master
Challenge. In the process you will
learn how to trade Covered Warrants,
Turbos and Super10s. Simply trade a virtu-
al pot of 100,000, up to 5 December, for
your chance to win a black&white mem-
bership to dreamcarhire.com worth
10,000, a Ferrari driving experience, a
Formula One driving day experience, as
well as weekly prizes from Red Letter
Days.
COVER FOR A SONG
Covered Warrants are similar to options
allowing traders to benefit from falling, as
well as rising markets. They are listed on
the London Stock Exchange (LSE), so can
be traded through any stockbroker. They
are leveraged, although your maximum
loss is always limited to the initial
amount invested. A strike price is set upon
entry, above and below which the trade is
struck out. Because they are geared instru-
ments, returns are amplify the move-
ments of the underlying although
traders dont actually take property of the
underlying, so are reliant on the solvency
of the provider.
So far, the Market Master Challenge has
thrown up shorting the FTSE 100 with a
strike out at 5,500 as the most popular
trade. This is followed by buying the Dow
above 12,000 and a short on the FTSE
below 5,400.
TURBO POWER
Turbos are also listed on the LSE and inter-
estingly can be put under the umbrella of
Self-Invested Personal Pensions (Sipp),
although not a shares Isa. Turbos allow
investors to choose a long Turbo if they
anticipate a rise in the underlying, or a
short Turbo if anticipating its decrease.
Turbos have an in-built knock-
out barrier a level is predeter-
mined at
issuance
l i mi t i ng
the down-
side risk
to the
investors
i n i t i a l
MOST POPULAR UNDERLYINGS
Name Traded value ()
FTSE 100 index 101,796,433
Dow Jones index 9,090,180
Dax index 6,930,041
Gold 6,737,515
Euro Stoxx 50 Net Return 4,851,825
Euro-dollar 4,845,854
Barclays 3,695,247
S&P 500 index 3,232,863
Aluminium December 2011 2,513,278
Apple 2,482,548
FTSE 100 below 5,800.
195m has so far been traded in the
Market Master Challenge. Although the
stakes are imaginary, the prizes are very
real, making the exercise potentially
lucrative. It also offers a risk free arena to
cut your teeth in trading these products.
The fourth and final week starts today, so
register at SGMarketMaster.co.uk for free.
Time to get in the
right in gear
E
UROPEAN bond yields are ris-
ing at an astronomical pace,
with Italian bonds tipping over
the 7 per cent yield mark yes-
terday. With yields consistently mov-
ing higher, and their inverse
relationship with price, many expect
further short-term downward move-
ment on European bonds. Capital
CFDs quotes the December German
bund at 133.92-133.95.
Its all about pubs this week, with
Marstons and Greene King report-
ing. Investors will want to see how
this part of the leisure sector has
been affected by the recent con-
sumer downturn. Capital CFDs
quotes 92.4p-93.1p for Marstons
and 447.4p-449.1p for Greene King.
The Eurozone may be on the brink
of collapse, Chinese manufacturing is
slowing and the US is threatened
with another ratings downgrade, but
drill down and theres a hidden sub-
text suggesting that economic
recovery especially across the
Atlantic is now finding a foothold.
As a result, oil prices are welling up
once again and US light crude is
toying with the $100/barrel level. IG
Markets quotes US light crude
January 2012 at $99.40-$99.46.
American traders came back
from holidays to find the markets
higher than they left them. The
S&P500leapt 36 handles to 1,191
by the time the bell rang on Monday,
driven by optimism from refuted
rumours of an IMF bailout for Italy
and record breaking retail sales in
the US over the weekend. However,
the S&P 500 is starting to run into
some serious resistance levels from
1,200 to 1,210. It might be time to
take some profit off the table.
Spread Co offers a spread on the
US500 of 1,195.5-1,196.0.
Philip Salter
THE TIPSTER
THEIR WORD
ISNT WORTH
THEIR BONDS
Even when cooled it remains a liquid asset Picture: GETTY
ANALYSIS l Spot gold: A quarter of volatility
1,900
1,800
1,700
1,600
$
1/9 8/9 15/9 22/9 29/9 6/10 13/10 20/10 27/10 3/11 10/11 17/11 24/11
LON GD ONCE FIX AM...........1714.00 38.00
SILVER LDN FIX AM ..................32.20 0.90
MAPLE LEAF 1 OZ ....................34.66 1.11
LON PLATINUM AM................1557.00 22.00
LON PALLADIUM AM...............593.00 23.00
ALUMINIUM CASH .................1986.00 -16.00
COPPER CASH ......................7196.00 -72.00
LEAD CASH...........................1974.50 24.50
NICKEL CASH......................17090.00 -110.00
TIN CASH.............................20300.00 -200.00
ZINC CASH ............................1879.50 -17.50
BRENT SPOT INDEX................107.84 0.00
SOYA .....................................1106.50 -16.00
COCOA..................................2238.00 -8.00
COFFEE...................................229.60 -2.00
KRUG.....................................1776.90 21.30
WHEAT ....................................142.72 0.23
AIR LIQUIDE........................................90.15 4.16 100.65 80.90
ALLIANZ..............................................70.64 4.85 108.85 56.16
ANHEUS-BUSCH INBEV ....................43.81 1.10 44.28 33.85
ARCELORMITTAL...............................12.67 0.92 28.55 10.47
AXA......................................................10.01 1.16 16.16 7.88
BANCO SANTANDER...........................5.50 0.28 9.20 5.05
BASF SE..............................................49.53 2.29 70.22 42.19
BAYER.................................................45.60 2.10 59.44 35.36
BBVA......................................................5.95 0.35 9.17 4.94
BMW ....................................................52.94 2.62 73.85 43.49
BNP PARIBAS.....................................28.52 2.67 59.93 22.72
CARREFOUR ......................................18.90 1.59 32.25 14.66
CRH PLC .............................................13.18 0.86 17.40 10.28
DAIMLER.............................................32.14 2.35 59.09 29.02
DANONE..............................................47.39 1.69 53.16 41.92
DEU.BOERSE OFFRE ........................43.25 2.54 55.75 35.46
DEUTSCHE BANK..............................26.59 1.79 48.70 20.79
DEUTSCHE TELEKOM.........................9.18 0.36 11.38 7.88
E.ON.....................................................17.37 0.88 25.54 12.50
ENEL......................................................2.98 0.13 4.86 2.78
ENI .......................................................15.22 0.55 18.66 11.83
FRANCE TELECOM............................12.25 0.54 16.65 11.12
GDF SUEZ ...........................................19.53 1.40 30.05 17.65
GENERALI ASS...................................11.85 0.37 17.05 10.34
IBERDROLA..........................................4.80 0.22 6.50 4.29
INDITEX ...............................................61.21 1.21 69.40 50.92
ING GROEP CVA...................................5.30 0.53 9.50 4.21
INTESA SANPAOLO.............................1.16 0.08 2.47 0.85
KON.PHILIPS ELECTR.......................14.01 0.62 25.45 12.01
L'OREAL..............................................77.36 2.33 91.24 68.83
LVMH..................................................112.30 4.20 132.65 94.16
MUNICH RE.........................................87.41 3.50 126.00 77.80
NOKIA....................................................4.25 0.20 8.49 3.33
REPSOL YPF.......................................21.11 1.05 24.90 17.31
RWE.....................................................29.57 1.43 55.88 21.22
SAINT-GOBAIN...................................29.29 2.01 47.64 26.07
SANOFI ................................................50.33 2.11 56.82 42.85
SAP......................................................42.82 1.04 46.15 32.88
SCHNEIDER ELECTRIC.....................39.09 3.00 61.83 35.00
SIEMENS .............................................71.26 2.66 99.39 62.13
SOCIETE GENERALE.........................17.35 1.52 52.70 14.32
TELECOM ITALIA..................................0.80 0.03 1.16 0.70
TELEFONICA ......................................13.52 0.66 18.75 12.50
TOTAL..................................................37.01 1.32 44.55 29.40
UNIBAIL-RODAMCO SE...................132.85 6.90 162.95 123.30
UNICREDIT............................................0.76 0.06 2.03 0.64
UNILEVER CVA...................................24.35 0.55 25.13 20.90
VINCI ....................................................30.99 1.60 45.48 28.46
VIVENDI ...............................................16.23 0.74 22.07 14.10
VOLKSWAGEN VORZ ......................120.10 8.00 152.20 86.40
Price Chg High Low
EUSHARES
WORLD INDICES
FTSE 100 . . . . . . . . . . . . . . 5312.76 148.11 2.87
FTSE 250 INDEX . . . . . . . . 9908.46 268.17 2.78
FTSE UK ALL SHARE . . . . 2736.15 74.97 2.82
FTSE AIMALL SH . . . . . . . . 681.38 6.92 1.03
DOWJONES INDUS 30 . . 11523.01 291.23 2.59
S&P 500. . . . . . . . . . . . . . . . 1192.55 33.88 2.92
NASDAQ COMPOSITE . . . 2527.34 85.83 3.52
FTSEUROFIRST 300 . . . . . . 940.88 32.96 3.63
NIKKEI 225 AVERAGE. . . . 8287.49 127.48 1.56
DAX 30 PERFORMANCE. . 5745.33 252.46 4.60
CAC 40 . . . . . . . . . . . . . . . . 3012.93 155.96 5.46
SHANGHAI SE INDEX . . . . 2383.03 2.81 0.12
HANG SENG. . . . . . . . . . . 18037.81 348.33 1.97
S&P/ASX 20 INDEX . . . . . . 2438.70 0.00 0.00
ASX ALL ORDINARIES . . . 4125.80 0.00 0.00
BOVESPA SAO PAOLO. . 56017.35 1122.86 2.05
ISEQ OVERALL INDEX . . . 2611.51 89.54 3.55
STI . . . . . . . . . . . . . . . . . . . . . . . 0.00 0.00 0.00
IGBM. . . . . . . . . . . . . . . . . . . 815.52 35.77 4.59
SWISS MARKET INDEX. . . 5522.66 127.05 2.35
Price Chg %chg
3M........................................................77.72 1.59 98.19 68.63
ABBOTT LABS ...................................53.20 1.15 55.61 45.07
ALCOA ..................................................9.46 0.51 18.47 8.45
ALTRIA GROUP..................................27.60 0.35 28.14 23.20
AMAZON.COM..................................194.15 11.75 246.71 160.59
AMERICAN EXPRESS........................46.01 1.01 53.80 41.25
AMGEN INC.........................................55.90 1.25 61.53 47.66
APPLE...............................................376.12 12.55 426.70 310.50
AT&T....................................................27.95 0.54 31.94 27.20
BANK OF AMERICA.............................5.25 0.08 15.31 5.11
BERKSHIRE HATAW B.......................75.48 2.59 87.65 65.35
BOEING CO.........................................64.99 2.21 80.65 56.01
BRISTOL MYERS SQUI ......................31.11 0.95 33.27 20.05
CATERPILLAR....................................91.48 4.76 116.55 67.54
CHEVRON...........................................95.77 3.48 110.01 80.41
CISCO SYSTEMS................................18.01 0.51 22.34 13.30
CITIGROUP.........................................25.05 1.42 51.50 21.40
COCA-COLA.......................................65.17 0.43 71.77 61.29
COLGATE PALMOLIVE......................88.28 1.55 94.89 74.86
CONOCOPHILLIPS.............................67.27 1.13 81.80 58.65
CVS/CAREMARK................................37.38 0.53 39.50 30.73
DU PONT(EI) DE NMR........................45.01 1.15 57.00 37.10
EXXON MOBIL....................................75.84 1.94 88.23 63.47
GENERAL ELECTRIC.........................14.80 0.10 21.65 14.02
GOOGLE A........................................588.19 25.19 642.96 473.02
HEWLETT PACKARD.........................26.53 1.14 49.39 19.92
HOME DEPOT.....................................37.30 0.83 39.38 28.13
IBM.....................................................182.21 5.15 190.53 141.28
INTEL CORP .......................................23.46 0.73 26.78 19.16
J.P.MORGAN CHASE.........................29.16 0.68 48.36 27.85
JOHNSON & JOHNSON.....................62.37 1.10 68.05 57.50
KRAFT FOODS A................................34.89 0.57 36.30 24.30
MC DONALD'S CORP ........................93.76 1.66 95.45 72.14
MERCK AND CO. NEW......................34.26 1.10 37.65 29.47
MICROSOFT........................................24.87 0.57 29.46 23.65
OCCID. PETROLEUM.........................90.63 3.94 117.89 66.36
ORACLE CORP...................................29.87 1.13 36.50 24.72
PEPSICO.............................................62.99 0.50 71.89 58.50
PFIZER ................................................19.09 0.64 21.45 16.25
PHILIP MORRIS INTL .........................73.09 1.78 73.46 55.85
PROCTER AND GAMBLE ..................62.24 1.24 67.72 56.57
QUALCOMM INC ................................53.94 2.08 59.84 45.98
SCHLUMBERGER ..............................69.22 2.85 95.64 54.79
TRAVELERS CIES..............................54.22 0.81 64.17 45.97
UNION PACIFIC ..................................98.53 3.37 107.89 77.73
UNITED TECHNOLOGIE ....................73.14 2.10 91.83 66.87
VERIZON COMMS ..............................36.25 0.90 38.95 31.60
WAL-MART STORES..........................57.25 0.36 59.40 48.31
WALT DISNEY CO ..............................34.07 0.56 44.34 28.19
WELLS FARGO & CO.........................24.15 0.64 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 ..................0.623 0.00
LIBOR Euro - 12 months ................2.020 0.01
LIBOR USD - overnight...................0.146 0.00
LIBOR USD - 12 months.................1.060 0.01
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 .........................2.930 0.01
European repo rate.........................0.362 0.00
Euro Euribor ....................................0.909 0.00
The vix index ...................................32.13 -2.34
The baItic dry index ........................1.807 0.00
Markit iBoxx...................................239.03 0.71
Markit iTraxx..................................207.32 1.18
Price Chg High Low
Price Chg %chg Price Chg %chg Price Chg %chg
USSHARES
BAE Systems . . . . . .260.9 5.1 361.1 248.1
Chemring Group . . . .396.0 6.2 736.5 368.8
Cobham . . . . . . . . . . .169.9 3.4 236.5 165.9
Meggitt . . . . . . . . . . . .370.9 5.4 397.6 304.9
QinetiQ Group . . . . . .123.7 2.2 136.3 101.5
RoIIs-Royce Group . .698.5 20.5 738.0 557.5
Senior . . . . . . . . . . . . .164.8 2.8 190.6 132.6
UItra EIectronics . . .1438.0 30.0 1830.0 1305.0
GKN . . . . . . . . . . . . . .177.1 7.5 245.0 157.0
BarcIays . . . . . . . . . . .167.9 12.2 333.6 138.9
HSBC HoIdings . . . . .488.8 21.4 730.9 463.5
LIoyds Banking Gr . . .23.7 0.5 69.6 21.8
RoyaI Bank of Sco . . .19.7 1.0 49.0 17.3
Standard Chartere .1340.0 66.5 1878.0 1169.5
AG Barr . . . . . . . . . .1156.0 35.0 1395.0 1031.0
Britvic . . . . . . . . . . . . .335.5 12.5 499.2 289.9
Diageo . . . . . . . . . . .1326.5 31.0 1344.0 1112.0
SABMiIIer . . . . . . . . .2187.5 69.5 2354.5 1979.0
AZ EIectronic Mat . . .245.7 17.1 338.1 206.1
Croda Internation . .1750.0 38.0 2081.0 1433.0
EIementis . . . . . . . . . .139.1 6.6 187.4 107.5
Johnson Matthey . .1809.0 70.0 2119.0 1523.0
Victrex . . . . . . . . . . .1120.0 20.0 1590.0 1025.0
YuIe Catto & Co . . . . .152.7 4.0 253.0 148.0
C/$ 1.3313 0.0082
C/ 0.8590 0.0020
C/ 103.81 0.9569
/C 1.1643 0.0027
/$ 1.5501 0.0060
/ 120.87 0.8319
FTSE 100
5312.76
148.11
FTSE 250
9908.46
268.17
FTSE ALLSHARE
2736.15
74.97
DOW
11523.01
291.23
NASDAQ
2527.34
85.83
S&P 500
1192.55
33.88
RPC Group . . . . . . . .324.5 8.0 384.8 217.0
Smiths Group . . . . . .911.0 27.5 1429.0 869.5
Brown (N.) Group . . .253.0 6.6 311.2 242.3
Carpetright . . . . . . . . .375.0 -6.0 835.5 375.0
Debenhams . . . . . . . . .59.4 2.7 75.7 51.2
Dignity . . . . . . . . . . . .804.0 -8.5 854.5 645.0
Dixons RetaiI . . . . . . .10.8 0.6 26.2 9.4
DuneImGroup . . . . . .441.1 10.1 550.0 383.9
HaIfords Group . . . . .329.1 6.0 459.7 268.6
Home RetaiI Group . . .79.5 3.4 235.0 72.5
Inchcape . . . . . . . . . .307.3 6.7 425.4 268.1
JD Sports Fashion . .708.0 -5.0 1030.0 688.0
Kesa EIectricaIs . . . . .86.0 4.3 174.0 78.4
Kingfisher . . . . . . . . .253.0 6.0 287.1 217.0
Marks & Spencer G . .317.8 10.2 402.2 301.8
Mothercare . . . . . . . .157.6 8.9 627.5 127.3
Next . . . . . . . . . . . . .2663.0 49.0 2810.0 1868.0
Sports Direct Int . . . .227.9 2.5 266.2 127.0
WH Smith . . . . . . . . . .505.5 6.2 558.0 433.8
Smith & Nephew . . . .565.0 10.0 742.0 521.0
Synergy HeaIth . . . . .881.5 13.5 981.0 800.5
Barratt DeveIopme . . .96.6 2.6 119.0 67.5
BeIIway . . . . . . . . . . . .708.5 15.0 753.5 514.0
BaIfour Beatty . . . . . .229.9 8.9 357.3 214.6
GaIIiford Try . . . . . . . .485.0 13.0 530.0 276.5
Kier Group . . . . . . . .1368.0 81.0 1448.0 1097.0
Drax Group . . . . . . . .559.5 8.0 581.5 353.6
SSE . . . . . . . . . . . . . .1287.0 33.0 1423.0 1111.0
Domino Printing S . .496.1 1.4 705.0 434.3
HaIma . . . . . . . . . . . . .325.8 8.4 429.6 306.3
Laird . . . . . . . . . . . . . .140.3 8.5 207.0 127.9
Morgan CrucibIe C . .250.8 12.3 357.1 224.0
Oxford Instrument . .946.0 31.0 1010.0 581.0
Renishaw . . . . . . . . . .827.5 27.5 1886.0 800.0
Spectris . . . . . . . . . .1178.0 44.0 1679.0 1039.0
Aberforth SmaIIer . . .521.0 14.0 714.0 507.0
AIIiance Trust . . . . . .332.0 6.0 392.7 310.2
Bankers Inv Trust . . .370.6 12.4 428.0 346.5
BH GIobaI Ltd. GB .1200.0 -3.0 1210.0 1058.0
BH GIobaI Ltd. US . . . .11.8 0.0 12.2 10.4
BH Macro Ltd. EUR . . .20.2 0.2 20.3 15.8
BH Macro Ltd. GBP 2070.0 9.0 2078.0 1630.0
BH Macro Ltd. USD . . .20.2 0.3 20.2 15.8
BIackRock WorId M .606.0 19.5 815.5 574.5
BIueCrest AIIBIue . . .166.0 0.7 176.2 162.4
British Assets Tr . . . .116.4 3.5 140.5 109.0
British Empire Se . . .438.6 13.0 533.0 409.9
CaIedonia Investm .1415.0 17.0 1928.0 1398.0
City of London In . . .272.6 7.1 306.9 257.0
Dexion AbsoIute L . .134.1 0.9 151.0 130.0
Edinburgh Dragon . .212.5 6.5 262.1 201.4
Edinburgh Inv Tru . . .459.6 11.2 492.2 414.9
EIectra Private E . . .1400.0 -17.0 1755.0 1287.0
F&C Inv Trust . . . . . .282.0 7.2 327.9 261.5
FideIity China Sp . . . . .76.8 1.3 123.0 70.0
FideIity European . . .970.0 35.0 1287.0 912.0
HeraId Inv Trust . . . . .438.0 7.8 545.5 419.0
HICL Infrastructu . . . .116.4 0.2 121.3 112.7
Impax Environment . .94.3 1.0 130.5 88.5
JPMorgan American .808.0 27.5 916.0 721.5
JPMorgan Asian In . .183.9 4.4 250.8 170.1
JPMorgan Emerging .502.0 16.1 639.0 480.1
JPMorgan European .659.0 16.0 983.5 643.0
JPMorgan Indian I . . .339.3 11.8 492.0 325.6
JPMorgan Russian .506.0 20.0 755.0 415.1
Law Debenture Cor . .338.1 9.1 385.0 315.0
MercantiIe Inv Tr . . . .843.0 11.0 1137.0 825.0
Merchants Trust . . . .354.9 11.9 431.8 341.5
Monks Inv Trust . . . .310.6 7.4 367.9 298.1
Murray Income Tru . .601.5 17.5 673.0 568.0
Murray Internatio . . .886.0 20.5 991.5 818.5
PerpetuaI Income . . .250.0 7.1 276.0 234.8
PersonaI Assets T .33420.0 220.0 33975.030210.0
PoIar Cap TechnoI . .325.9 4.9 391.2 299.5
RIT CapitaI Partn . . .1305.0 16.0 1360.0 1149.0
Scottish Inv Trus . . . .437.0 7.0 524.0 417.0
Scottish Mortgage . .598.5 19.0 781.0 573.5
SVG CapitaI . . . . . . . .184.0 1.9 279.8 182.1
TempIe Bar Inv Tr . . .838.0 30.5 952.0 791.0
TempIeton Emergin .535.0 15.0 689.5 497.0
TR Property Inv T . . .144.7 4.2 206.1 140.5
TR Property Inv T . . . .67.7 0.1 94.0 67.6
Witan Inv Trust . . . . .429.5 11.5 533.0 401.5
3i Group . . . . . . . . . . .184.4 4.2 340.0 176.9
3i Infrastructure . . . .120.0 0.8 125.2 113.1
Aberdeen Asset Ma .193.8 8.7 240.0 167.8
Ashmore Group . . . .324.1 13.4 420.0 301.5
Brewin DoIphin Ho . .124.2 4.3 185.4 113.7
CameIIia . . . . . . . . . .9595.0 95.010950.0 8800.0
CharIes TayIor Co . . .124.1 -1.4 170.0 121.0
City of London Gr . . . .63.5 0.0 93.6 63.0
City of London In . . .334.9 0.0 461.5 321.3
CIose Brothers Gr . . .634.0 21.0 888.5 604.0
CoIIins Stewart H . . . .50.5 -0.1 90.8 49.0
EvoIution Group . . . . .77.0 2.5 94.0 62.3
F&C Asset Managem .66.5 2.0 92.9 56.1
Hargreaves Lansdo .450.0 24.0 646.5 402.5
HeIphire Group . . . . . . .1.6 0.2 17.5 1.3
Henderson Group . . .111.5 9.5 173.1 95.1
Highway CapitaI . . . . .13.0 0.0 21.0 6.5
ICAP . . . . . . . . . . . . . .338.5 10.7 570.5 311.6
IG Group HoIdings . .433.8 5.9 528.0 393.6
Intermediate Capi . . .230.0 5.2 360.3 197.9
InternationaI Per . . . .187.2 17.1 388.8 170.1
InternationaI Pub . . . .117.8 -0.2 119.5 108.6
Investec . . . . . . . . . . .339.4 9.2 538.0 318.4
IP Group . . . . . . . . . . . .72.0 2.0 76.5 29.9
Jupiter Fund Mana . .210.6 9.1 337.3 184.9
Liontrust Asset M . . . .76.0 0.1 90.5 57.9
LMS CapitaI . . . . . . . . .56.5 -0.5 64.8 44.8
London Finance & . . .22.0 0.0 23.5 16.5
London Stock Exch .835.0 28.0 1076.0 758.5
Lonrho . . . . . . . . . . . . .10.5 0.0 19.8 10.3
Man Group . . . . . . . . .132.3 7.1 311.0 123.6
Paragon Group Of . .180.1 1.9 206.1 134.6
Provident Financi . . .982.5 6.0 1124.0 802.0
Rathbone Brothers .1051.0 15.0 1257.0 977.0
Record . . . . . . . . . . . . .14.8 0.0 41.0 13.5
RSM Tenon Group . . .17.0 0.0 66.3 16.0
Schroders . . . . . . . .1284.0 79.0 1922.0 1183.0
Schroders (Non-Vo .1092.0 59.0 1554.0 970.0
TuIIett Prebon . . . . . .288.0 1.3 428.6 286.7
WaIker Crips Grou . . .44.5 0.0 51.5 40.0
BT Group . . . . . . . . . .183.4 6.2 204.1 161.0
CabIe & WireIess . . . .36.3 1.1 52.9 31.3
CabIe & WireIess . . . .15.8 0.9 76.9 14.2
COLT Group SA . . . . .86.3 2.2 156.2 83.3
KCOM Group . . . . . . . .72.8 1.2 84.0 51.0
TaIkTaIk TeIecom . . .130.6 1.6 168.3 119.8
TeIecomPIus . . . . . . .748.0 6.5 753.5 408.0
Booker Group . . . . . . .74.8 -0.3 80.0 54.5
Greggs . . . . . . . . . . . .494.3 7.7 550.5 435.3
Morrison (Wm) Sup .315.3 4.1 320.0 262.7
Ocado Group . . . . . . . .83.6 -1.2 285.0 81.0
Sainsbury (J) . . . . . . .293.6 7.6 391.5 263.5
Tesco . . . . . . . . . . . . .396.3 12.1 439.0 356.3
Associated Britis . . .1100.0 15.0 1182.0 940.0
Cranswick . . . . . . . . .712.5 10.5 883.5 588.5
Dairy Crest Group . . .337.5 11.4 424.9 318.8
Devro . . . . . . . . . . . . .255.0 4.4 296.9 223.5
Premier Foods . . . . . . . .4.8 0.0 35.1 3.3
Tate & LyIe . . . . . . . . .680.0 16.5 689.5 510.0
UniIever . . . . . . . . . .2065.0 50.0 2114.0 1777.0
Mondi . . . . . . . . . . . . .438.9 23.9 664.0 413.5
Centrica . . . . . . . . . . .292.7 6.1 345.8 282.6
InternationaI Pow . . .322.9 7.5 448.6 279.4
NationaI Grid . . . . . . .639.0 7.5 649.5 530.0
Pennon Group . . . . . .698.5 12.5 737.5 584.5
Severn Trent . . . . . .1529.0 32.0 1600.0 1368.0
United UtiIities . . . . .610.0 10.0 637.0 543.5
Cookson Group . . . . .479.3 26.4 724.5 395.8
DS Smith . . . . . . . . . .190.0 6.5 266.2 164.4
Rexam . . . . . . . . . . . .338.4 7.6 400.0 299.8
Price Chg High Low
BerkeIey Group Ho .1253.0 31.0 1299.0 807.5
Bovis Homes Group .456.0 13.0 485.5 326.5
Persimmon . . . . . . . .477.3 13.8 518.5 338.6
Reckitt Benckiser . .3210.0 61.0 3648.0 3015.0
Redrow . . . . . . . . . . . .108.8 1.9 139.0 103.5
TayIor Wimpey . . . . . . .37.0 0.9 43.3 23.8
Bodycote . . . . . . . . . .261.7 15.4 397.7 225.6
Charter Internati . . . .933.5 6.0 952.0 538.5
Fenner . . . . . . . . . . . .380.0 14.1 422.5 280.0
IMI . . . . . . . . . . . . . . . .748.0 31.0 1119.0 636.5
MeIrose . . . . . . . . . . .330.0 7.8 365.4 268.0
Northgate . . . . . . . . . .222.0 0.8 346.7 202.0
Rotork . . . . . . . . . . .1676.0 26.0 1858.0 1501.0
Spirax-Sarco Engi . .1812.0 69.0 2063.0 1649.0
Weir Group . . . . . . .1943.0 148.0 2218.0 1375.0
Ferrexpo . . . . . . . . . . .291.5 34.1 499.0 238.7
TaIvivaara Mining . . .221.4 19.6 622.0 195.2
BBAAviation . . . . . . .168.4 3.7 240.8 156.0
Stobart Group Ltd . . .113.4 1.4 163.6 111.7
AdmiraI Group . . . . . .917.0 36.0 1754.0 800.5
AmIin . . . . . . . . . . . . .325.8 14.9 427.0 270.6
Huntsworth . . . . . . . . .38.0 1.8 85.0 36.3
Informa . . . . . . . . . . . .345.3 10.9 461.1 313.9
ITE Group . . . . . . . . . .184.7 2.8 258.2 157.7
ITV . . . . . . . . . . . . . . . . .61.8 1.9 93.5 51.7
Johnston Press . . . . . . .4.6 0.0 12.8 4.1
MecomGroup . . . . . .171.0 6.0 310.0 134.5
Moneysupermarket. .104.1 2.1 120.4 75.7
Pearson . . . . . . . . . .1104.0 23.0 1207.0 926.0
PerformGroup . . . . .200.0 0.0 234.5 150.0
Reed EIsevier . . . . . .511.0 13.0 590.5 461.3
Rightmove . . . . . . . .1217.0 12.0 1408.0 743.0
STV Group . . . . . . . . . .88.5 -0.8 168.0 87.0
Tarsus Group . . . . . .132.0 -0.5 165.0 114.0
Trinity Mirror . . . . . . . .46.8 1.3 93.0 37.5
UBM . . . . . . . . . . . . . .481.3 23.4 725.0 416.0
UTV Media . . . . . . . . .108.3 -0.8 150.0 101.0
WiImington Group . . .84.3 0.5 183.0 82.5
WPP . . . . . . . . . . . . . .643.0 26.5 846.5 578.0
YeII Group . . . . . . . . . . .5.3 0.8 14.8 3.4
African Barrick G . . .491.8 0.5 618.5 393.5
AIIied GoId Minin . . .168.0 1.5 281.3 34.4
AngIo American . . .2316.5 95.0 3437.0 2138.5
AngIo Pacific Gro . . .270.9 -3.7 369.3 237.9
Antofagasta . . . . . . .1094.0 50.0 1634.0 900.5
Aquarius PIatinum . .157.1 7.1 419.0 150.0
BeazIey . . . . . . . . . . . .132.0 5.8 139.2 109.6
CatIin Group Ltd. . . .395.6 15.6 421.4 331.5
Hiscox Ltd. . . . . . . . . .381.4 19.0 424.7 340.5
Jardine LIoyd Tho . . .666.0 22.5 764.5 573.5
Lancashire HoIdin . . .699.0 12.0 774.5 529.0
RSA Insurance Gro . .106.1 3.9 143.5 102.2
Aviva . . . . . . . . . . . . . .298.5 18.1 477.9 275.3
LegaI & GeneraI G . . .101.3 4.2 123.8 89.8
OId MutuaI . . . . . . . . .109.5 4.7 144.8 98.1
Phoenix Group HoI . .545.0 13.0 688.0 451.1
PrudentiaI . . . . . . . . .598.0 32.5 777.0 509.0
ResoIution Ltd. . . . . .239.6 6.9 316.1 211.3
St James's PIace . . . .319.9 16.4 376.0 236.2
Standard Life . . . . . . .194.4 9.3 244.7 172.0
4Imprint Group . . . . .222.0 4.0 295.0 200.0
Aegis Group . . . . . . .127.1 4.0 158.5 115.7
BIoomsbury PubIis . . .93.0 -2.0 138.0 93.0
British Sky Broad . . .745.5 19.5 850.0 618.5
Centaur Media . . . . . . .37.8 -1.0 73.0 34.6
Chime Communicati .184.8 2.0 298.5 173.0
Creston . . . . . . . . . . . .74.3 0.0 121.0 72.0
DaiIy MaiI and Ge . . .405.0 16.9 594.5 343.4
Euromoney Institu . .631.0 7.5 736.0 522.5
Future . . . . . . . . . . . . . . .8.8 -0.3 30.0 8.1
Haynes PubIishing . .225.0 0.0 257.0 208.5
BHP BiIIiton . . . . . . .1836.5 77.0 2631.5 1667.0
Centamin Egypt Lt . . .90.1 3.6 185.8 80.8
Eurasian NaturaI . . .633.0 32.5 1125.0 522.0
FresniIIo . . . . . . . . . .1621.0 38.0 2150.0 1296.0
GemDiamonds Ltd. .203.2 -0.7 306.0 179.8
GIencore Internat . . .384.4 10.6 531.1 348.0
HochschiId Mining . .411.4 11.4 680.0 394.9
Kazakhmys . . . . . . . .857.5 52.5 1671.0 730.0
Kenmare Resources . .34.1 2.2 59.9 25.0
Lonmin . . . . . . . . . . .1011.0 40.0 1983.0 963.0
New WorId Resourc .434.9 23.1 1060.0 410.5
PetropavIovsk . . . . . .686.5 21.5 1165.0 543.5
RandgoId Resource 6240.0-535.0 7555.0 4425.0
Rio Tinto . . . . . . . . .3164.0 132.0 4712.0 2712.5
Vedanta Resources .994.5 66.5 2559.0 928.0
Xstrata . . . . . . . . . . . .948.3 39.6 1550.0 764.0
Inmarsat . . . . . . . . . . .412.7 9.4 719.5 389.3
Vodafone Group . . . .168.6 2.2 182.8 155.1
Genesis Emerging . .438.0 14.0 568.0 424.0
Afren . . . . . . . . . . . . . . .79.5 2.8 171.2 73.6
BG Group . . . . . . . . .1298.5 53.5 1564.5 1144.0
BP . . . . . . . . . . . . . . . .437.8 12.4 509.0 363.2
Cairn Energy . . . . . . .272.5 8.3 469.7 261.4
EnQuest . . . . . . . . . . . .91.0 5.4 158.5 85.7
Essar Energy . . . . . .225.5 11.5 589.5 211.4
ExiIIon Energy . . . . . .265.0 12.5 469.7 184.2
Heritage OiI . . . . . . . .166.9 6.9 486.0 160.0
Ophir Energy . . . . . . .242.9 2.9 299.0 184.5
Premier OiI . . . . . . . . .359.6 2.3 535.0 310.0
RoyaI Dutch SheII . .2139.5 38.5 2326.5 1883.5
RoyaI Dutch SheII . .2197.0 26.0 2336.0 1890.5
SaIamander Energy .201.5 4.5 317.6 182.3
Soco Internationa . . .291.0 13.0 400.0 278.0
TuIIow OiI . . . . . . . . .1308.0 56.0 1493.0 945.5
Amec . . . . . . . . . . . . .862.0 18.0 1251.0 740.5
Hunting . . . . . . . . . . .650.5 24.5 817.0 530.0
Kentz Corporation . .471.6 9.5 508.0 275.5
LampreII . . . . . . . . . . .260.7 12.1 395.2 220.7
Petrofac Ltd. . . . . . .1351.0 52.0 1685.0 1108.0
Wood Group (John) .613.0 22.0 715.8 469.9
Burberry Group . . . .1197.0 35.0 1600.0 996.0
PZ Cussons . . . . . . . .350.2 14.2 409.0 320.5
Supergroup . . . . . . . .447.9 3.4 1820.0 435.2
AstraZeneca . . . . . .2821.0 66.0 3194.0 2543.5
BTG . . . . . . . . . . . . . .286.9 7.6 309.7 210.1
Genus . . . . . . . . . . . .1025.0 15.0 1111.0 824.0
GIaxoSmithKIine . . .1359.5 16.0 1405.5 1127.5
Hikma Pharmaceuti .617.0 16.0 900.0 555.5
Shire PIc . . . . . . . . . .2028.0 39.0 2136.0 1481.0
CapitaI & Countie . . .175.9 6.2 203.7 142.8
Daejan HoIdings . . .2523.0 16.0 2954.0 2282.0
F&C CommerciaI Pr .101.9 1.0 108.0 88.0
Grainger . . . . . . . . . . . .94.1 -0.3 133.2 77.3
London & Stamford .116.4 2.4 140.0 111.6
SaviIIs . . . . . . . . . . . . .284.4 -0.5 427.1 256.2
UK CommerciaI Pro . .70.2 -0.1 85.5 70.2
Unite Group . . . . . . . .160.8 3.8 224.1 152.9
Big YeIIow Group . . .250.2 10.2 352.2 218.0
British Land Co . . . . .471.8 17.6 629.5 452.0
CapitaI Shopping . . .304.3 15.4 424.8 288.7
Derwent London . . .1573.0 72.0 1880.0 1400.0
Great PortIand Es . . .337.5 13.4 445.0 317.4
Hammerson . . . . . . . .373.6 19.8 490.9 352.0
Hansteen HoIdings . . .70.0 0.5 89.5 68.5
Land Securities G . . .661.0 25.5 885.0 616.0
SEGRO . . . . . . . . . . . .216.4 9.5 331.3 204.8
Shaftesbury . . . . . . . .483.1 18.5 539.0 431.7
Aveva Group . . . . . .1468.0 32.0 1799.0 1298.0
Computacenter . . . . .350.6 15.2 490.0 335.4
Fidessa Group . . . . .1550.0 -21.0 2109.0 1409.0
Invensys . . . . . . . . . . .191.5 9.2 364.3 180.9
Logica . . . . . . . . . . . . .75.0 4.5 147.2 67.6
Micro Focus Inter . . .358.4 0.5 426.2 239.4
Misys . . . . . . . . . . . . .242.8 1.9 420.2 214.9
Sage Group . . . . . . . .275.0 8.5 302.0 231.7
SDL . . . . . . . . . . . . . . .629.5 -12.0 711.5 571.0
TeIecity Group . . . . . .590.5 9.0 620.5 430.0
Aggreko . . . . . . . . . .1776.0 38.0 2034.0 1394.5
Ashtead Group . . . . .173.5 13.2 207.9 99.4
Atkins (WS) . . . . . . . .618.5 27.0 820.0 490.2
Babcock Internati . . .685.0 9.0 733.0 520.0
Berendsen . . . . . . . . .430.0 8.0 568.0 391.3
BunzI . . . . . . . . . . . . .806.0 9.5 820.5 676.5
Cape . . . . . . . . . . . . . .310.7 11.6 591.5 295.0
Capita Group . . . . . . .636.0 18.5 786.5 614.5
CariIIion . . . . . . . . . . .295.4 10.2 403.2 281.0
De La Rue . . . . . . . . .904.5 -31.5 943.0 549.5
DipIoma . . . . . . . . . . .311.5 5.5 414.3 263.3
EIectrocomponents .203.1 5.2 294.9 182.2
Experian . . . . . . . . . . .800.5 23.0 833.5 665.0
FiItrona PLC . . . . . . . .378.8 3.3 397.1 229.7
G4S . . . . . . . . . . . . . . .239.2 7.2 291.0 219.9
Hays . . . . . . . . . . . . . . .70.9 4.0 133.6 66.6
Homeserve . . . . . . . .240.5 5.8 532.0 218.5
Howden Joinery Gr . .104.0 3.5 127.5 92.0
Interserve . . . . . . . . . .310.8 11.0 341.3 190.8
Intertek Group . . . . .1879.0 29.0 2148.0 1715.0
MichaeI Page Inte . . .363.7 6.8 567.0 338.7
Mitie Group . . . . . . . .249.1 4.8 257.5 195.9
Premier FarneII . . . . .170.7 3.7 308.8 144.5
Regus . . . . . . . . . . . . . .85.2 4.2 119.0 64.0
RentokiI InitiaI . . . . . . .62.6 1.2 104.9 61.0
RPS Group . . . . . . . . .179.1 -0.5 253.0 156.6
Serco Group . . . . . . .474.3 5.8 618.5 467.4
Shanks Group . . . . . .106.2 2.7 130.9 99.4
SIG . . . . . . . . . . . . . . . .80.5 2.8 153.5 77.7
SThree . . . . . . . . . . . .224.0 4.5 447.6 213.2
Travis Perkins . . . . . .791.5 34.5 1127.0 715.0
WoIseIey . . . . . . . . .1802.0 59.0 2261.0 1404.0
ARM HoIdings . . . . . .574.0 21.0 651.0 389.6
CSR . . . . . . . . . . . . . .166.8 6.8 447.0 154.1
Imagination Techn . .434.9 22.2 502.0 296.9
Pace . . . . . . . . . . . . . . .45.4 0.7 231.8 44.0
Spirent Communica .122.2 2.8 160.3 109.5
British American . .2859.5 34.5 2949.5 2282.5
ImperiaI Tobacco . .2266.0 12.0 2354.0 1784.0
Betfair Group . . . . . . .763.5 22.5 1400.0 567.0
Bwin.party Digita . . .136.4 1.9 257.6 100.6
CarnivaI . . . . . . . . . .2066.0 63.0 3153.0 1742.0
Compass Group . . . .560.0 9.0 612.0 512.5
Domino's Pizza UK . .400.6 4.8 586.0 377.0
easyJet . . . . . . . . . . . .367.0 5.6 474.0 301.0
FirstGroup . . . . . . . . .311.6 1.7 412.6 301.8
Go-Ahead Group . . .1221.0 2.0 1598.0 1203.0
Greene King . . . . . . .459.5 18.0 518.0 410.0
InterContinentaI . . .1044.0 39.0 1435.0 955.0
InternationaI Con . . .144.6 3.8 305.0 132.0
JD Wetherspoon . . . .410.2 10.0 468.3 380.5
Ladbrokes . . . . . . . . .127.0 0.4 155.3 114.0
Marston's . . . . . . . . . . .92.0 2.2 117.1 84.6
MiIIennium& Copt . .391.4 5.6 600.5 371.2
MitcheIIs & ButIe . . . .223.9 6.9 361.0 215.6
NationaI Express . . .204.5 1.3 270.2 201.6
Rank Group . . . . . . . .142.2 2.2 153.7 109.5
Restaurant Group . . .288.8 3.8 335.0 254.9
Stagecoach Group . .245.3 4.8 272.4 200.0
Thomas Cook Group .21.7 3.7 204.8 10.2
TUI TraveI . . . . . . . . . .160.0 5.4 271.9 136.7
Whitbread . . . . . . . .1579.0 51.0 1887.0 1409.0
WiIIiamHiII . . . . . . . . .198.0 5.0 244.1 155.5
Abcam . . . . . . . . . . . .345.5 11.3 460.0 307.0
AIbemarIe & Bond . .315.0 2.5 400.1 272.0
Amerisur Resource . .14.5 -1.3 29.0 9.5
Andor TechnoIogy . .546.0 -32.0 685.0 371.0
ArchipeIago Resou . . .61.0 1.0 79.0 49.0
ASOS . . . . . . . . . . . .1324.0 54.0 2468.0 1230.0
AureIian OiI & Ga . . . .18.8 -0.8 92.0 16.0
Avanti Communicat .270.0 1.5 735.0 248.5
Avocet Mining . . . . . .205.0 -4.8 286.8 177.5
BIinkx . . . . . . . . . . . . . .70.3 5.5 158.0 64.0
Borders & Souther . . .61.5 2.3 72.3 43.5
BowLeven . . . . . . . . . .65.0 -0.3 398.0 62.3
Brooks MacdonaId .1107.5 -56.5 1372.5 940.0
Cove Energy . . . . . . . .87.5 8.3 112.8 61.0
Daisy Group . . . . . . .103.8 0.3 127.0 88.0
EMIS Group . . . . . . . .531.8 31.8 580.0 406.0
Encore OiI . . . . . . . . . .74.3 -0.5 151.5 40.8
Faroe PetroIeum . . . .142.5 0.5 218.3 130.0
GuIfsands PetroIe . . .199.5 8.8 401.5 142.5
GWPharmaceuticaI . .95.5 -1.0 130.0 87.0
H&T Group . . . . . . . . .305.6 1.6 395.0 277.0
Hamworthy . . . . . . . .831.0 0.0 834.0 373.8
Hargreaves Servic .1108.0 7.0 1180.0 693.0
HeaIthcare Locums . . . .2.6 -0.0 3.1 2.6
Immunodiagnostic . .471.3-314.8 1218.0 442.0
ImpeIIamGroup . . . .260.0 -3.0 387.5 180.5
James HaIstead . . . . .450.0 -2.5 495.0 360.0
KaIahari MineraIs . . .229.0 4.8 301.0 198.3
London Mining . . . . .295.0 1.3 436.5 278.5
Lupus CapitaI . . . . . .104.0 3.8 150.0 86.0
M. P. Evans Group . .395.0 -1.0 500.5 371.0
Majestic Wine . . . . . .368.0 2.3 510.0 353.0
May Gurney Integr . .283.0 0.3 302.0 213.0
Monitise . . . . . . . . . . . .31.8 0.8 40.0 18.5
MuIberry Group . . . .1337.0 -33.0 1920.0 637.5
Nanoco Group . . . . . . .51.0 1.0 110.0 38.0
NauticaI PetroIeu . . .286.0 22.5 547.0 223.5
NichoIs . . . . . . . . . . . .536.0 0.0 579.0 410.0
Numis Corporation . . .88.0 -2.0 137.8 87.0
Pan African Resou . . .13.8 -0.3 15.8 9.5
Patagonia GoId . . . . . .49.3 -0.3 70.0 37.3
Prezzo . . . . . . . . . . . . .55.3 -1.0 71.5 53.3
Pursuit Dynamics . . .202.3 6.8 700.0 160.5
Rockhopper ExpIor .235.5 2.8 386.0 141.0
RWS HoIdings . . . . . .437.5 6.0 479.8 266.5
Songbird Estates . . .105.5 -2.5 160.3 105.0
VaIiant PetroIeum . . .415.0 14.8 672.0 391.0
Young & Co's Brew . .642.5 0.0 712.0 565.0
Thomas Cook Group .21.7 20.6
Ferrexpo . . . . . . . . . .291.5 13.3
InternationaI Pers . . .187.2 10.1
TaIvivaara Mining . . .221.4 9.7
Henderson Group . . .111.5 9.3
Weir Group . . . . . . .1943.0 8.3
Ashtead Group . . . . .173.5 8.2
BarcIays . . . . . . . . . . .167.9 7.8
AZ EIectronic Mate . .245.7 7.5
Vedanta Resources . .994.5 7.2
RandgoId Resources6240.0 -7.9
De La Rue . . . . . . . . .904.5 -3.4
SDL . . . . . . . . . . . . . . .629.5 -1.9
Carpetright . . . . . . . .375.0 -1.6
Ocado Group . . . . . . . .83.6 -1.4
AngIo Pacific Grou . .270.9 -1.4
Fidessa Group . . . . .1550.0 -1.3
EIectra Private Eq . .1400.0 -1.2
Dignity . . . . . . . . . . . .804.0 -1.1
JD Sports Fashion . .708.0 -0.7
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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NONEQUITY INVESTM. COMM.
Tsy 3.250 11 . . . . . .99.96 0.00 102.8 100.0
Tsy 5.250 12 . . . .102.53 0.00 106.9 102.5
Tsy 9.000 12 . . . .105.88 0.00 113.5 105.8
Tsy 5.000 12 . . . .101.24 0.00 105.5 101.2
Tsy 4.500 13 . . . .105.19 0.06 108.1 105.1
Tsy 2.500 13 . . . .284.17 0.05 287.7 277.6
Tsy 8.000 13 . . . . .113.77 0.07 119.5 113.6
Tsy 5.000 14 . . . . .112.32 0.19 112.9 109.2
Tsy 7.750 15 . . . .100.80 0.05 107.9 100.4
Tsy 4.750 15 . . . . .114.87 0.28 114.9 108.6
Tsy 8.000 15 . . . .128.41 0.28 129.2 123.7
Tsy 4.000 16 . . . . .113.65 0.31 113.8 104.9
Tsy 2.500 16 . . . .340.61 0.29 342.7 310.2
Tsy 8.750 17 . . . .140.13 0.22 141.9 132.9
Tsy 12.000 17 . . .123.16 0.00 132.0 122.3
Tsy 1.250 17 . . . . .114.68 0.26 115.4 106.7
Tsy 5.000 18 . . . .120.86 0.29 121.5 109.7
Tsy 4.500 19 . . . . .118.53 0.27 119.6 105.4
Tsy 3.750 19 . . . . .113.29 0.30 114.3 99.4
Tsy 2.500 20 . . . .358.79 0.34 359.7 312.4
Tsy 4.750 20 . . . .121.05 0.28 122.2 106.6
Tsy 8.000 21 . . . .149.75 0.40 152.0 133.8
Tsy 1.875 22 . . . .124.78 0.26 125.5 111.3
Tsy 4.000 22 . . . . .115.43 0.26 116.7 99.0
Tsy 2.500 24 . . . .323.51 0.54 323.9 273.5
Tsy 5.000 25 . . . .127.65 0.48 128.7 107.4
Tsy 1.250 27 . . . .122.79 0.68 122.8 104.6
Tsy 4.250 27 . . . . .120.11 0.57 120.8 97.9
Tsy 6.000 28 . . . .144.94 0.56 145.8 119.5
Tsy 4.125 30 . . . .313.49 0.79 313.5 261.2
Tsy 4.750 30 . . . .127.69 0.63 128.3 103.0
Tsy 4.250 32 . . . .120.31 0.69 120.9 96.0
Tsy 4.250 36 . . . .121.28 0.77 121.9 95.0
Tsy 4.750 38 . . . .131.26 0.83 131.9 102.8
Tsy 4.500 42 . . . .128.15 0.98 128.6 98.9
% %
Wealth Management
Lifestyle | Health
JAMIE OLIVERS
NEW RESTAURANT
FIND OUT IF UNION JACKS
LIVES UP TO THE HYPE P34
33
FIT IN
THE CITY
BY LAURA WILLIAMS
FITNESS & DIET EXPERT
Get fit quick
fix for Xmas
S
o you ignored the headlines a few
weeks ago giving you your Little Black
Dress countdown. Now youre faced
with the prospect of sporting back-
less, strapless numbers for the next five
weeks. Whats a girl to do? Act sharpish, I
say. Ive researched (yes, Ive been the human
guinea pig) for the best quick-fixes out there
and theres something for everyone...
THE CLEANSE
Normally Id run a mile from anything with
the word cleanse in the title but as this didnt
sound either too dangerous or high mainte-
nance, I thought Id give it a go. As for how it
works, I need to be delicate about this (Im
aware some of you may be munching your
morning muffin as you read this). The 14-Day
Acai Berry Cleanse is a course of tablets that
helps to improve the functioning of your
digestive system (and get rid of old matter,
sorry). Well, it wasnt too invasive and yes, I
felt lighter. Worth a go for a flatter looking
tum definitely. Fromwww.revital.com
THE CELEB DIET
We love one of these every now and then.
The one I picked seems to be all the rage
with the likes of Gwyneth Paltrow and
Kirsten Dunst and its definitely got celeb
written all over it. The pH balancing diet
involves eating just alkaline foods such as
green leafy veg, white meat, oily fish, and
pulses galore, and drinking a special green
juice (Lifestreams Organic Barley & Wheat
Grass Powder in water, you can see why the
celebs might gravitate towards this). Anyway,
Im not sure of the science of this one (I
believe the body has perfectly good buffering
systems in place to balance out acidity issues)
but I did feel good on it. Its not a long term
plan for me because all my favourite naugh-
ties are off the menu but its very healthy,
safe and it does enable you to drop a few
pounds pretty quick. Available from grumpy-
gorilla.co.uk
laurawilliamsonline.co.uk
lie in a hot bath, a little too much of
my expanding waistline visible above
the steaming surface of the water. I
am contemplating turning forty.
Life begins at forty, I keep hearing.
My namesake, my mothers great
uncle David, had signed up at 17 and
fought in the trenches in World War
One. Hed seen his fathers bakery go
bust in the Great Depression, leaving
the family destitute. And then, after
spells of unemployment and working
in factories and on the land and well
into middle age for the time, hed re-
enlisted as World War Two loomed,
only to be horribly wounded at
Dunkirk just a few days before turning
forty. He lived for another twenty-five
years, angry and constantly in pain
but his life had ended before forty.
And me, just a few days before
turning forty? A secure childhood and
a good education. And now, three
wonderful children, a lovely wife, a
beautiful home, good health as far
as I know and the temporarily
expanding waistline notwithstand-
ing and I am, it seems, successful,
respected and economically secure.
Forty. Double top in darts. 101000
in the binary numeral system. The
number of points required to be pretty
sure of avoiding relegation from the
Premiership. The duration, in days, of
Christs fast in the Judean desert.
What does it mean? With luck, that
Ive got about the same again to go.
That Im about half way. Another
forty years. But of what?
Emma comes in to brush her teeth.
Im glad we decided to keep it low
key next week, I say.
Next week?
Ha ha. My 40th. Onset of middle
age. Beginning of the end, I offer, in
sarcastic clarification.
Not disappointed are you?
I have everything I could possibly
want. I reply, almost believably.
City Dad will continue next
Tuesday. For previous episodes go to
cityam.com
LOSING YOUR HAIR?
IT CAN BE RESTORED!
THE WIMPOLE CLINIC
Ha nna h Hous e , 1 1 - 1 6 Ma nc he s t e r S t r e e t , L ond on W1 U 4 DJ
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centres in Europe, Dr. Michael
May F.R.C.S. has pioneered a
permanent solution to male
pattern baldness using
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hair transplant techniques.
For your FREE consultation
with Dr May call today on:
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www. wi mpol ec l i ni c. c om
CITY DAD
Episode 38: Its the final countdown
If you lack motivation, the new generation of GPS
running apps can give you the push you need to hit
the streets. Steve Dinneen looks at the best of them
Nike+ (above and
below) is the daddy of
running apps
How to get app and running
you when you decide to pack it in early.
Nike+ is the daddy of them all and still
one of the best. Using GPS it will record
the distance you have traveled, tailor a
playlist to suit your workout and even
play you a congratulatory message from
Lance Armstrong when you have beaten
your personal best.
Along the same lines is Motorolas
Motoactv, a stand-alone, Android-based
gadget that records information includ-
ing how many steps you have taken and
how many calories you have burned. The
tiny device can then compare this with
any friends using the same system,
adding a competitive edge to a solo work-
out.
Whatever your level or regime, there
will be an app for it: from interval run-
ning to dedicated marathon training. For
the motivationally challenged, the future
of running is here. Just dont blame me
when you get hooked.
GHOST RACE
If youre the kind of person who struggles to
get out of bed without an element of compe-
tition, then this app is for you. It will use
your phones GPS to track your run and then
save it until next time you hit the streets, at
which point you can race against your own
best times. A bit like the ghost feature on
Mario Kart, except more tiring and probably
not quite as much fun.
RUNKEEPER
Making your running public is a good way of
keeping your interest levels up. There are a
whole host of social apps that will let you
post your times online and receive support
from other runners. RunKeeper is one of the
better ones, allowing you to search through
your entire running history to chart your
improvement curve.
BEST OF THE REST
I
t seems to get everyone in the end.
The dull, repetitive, painful thud-
ding of a morning jog turns from a
source of fear and amusement to an
insatiable craving.
Like desperate addicts people circle
public parks under cover of darkness,
feeding their habit like nocturnal,
masochistic ghouls.
Once the addiction has reached a cer-
tain level, these people become pushers,
boasting about how great their drug
makes them feel the unbelievable highs
and rushes of chemicals. Go on, try it,
they say. Just try it once. Once and youll
be hooked.
And thanks to the ceaseless march of
the smartphone, these people have
another weapon in their armoury the
running app.
Now your phone can remind you when
you should go for a jog, give you a prod
when you should speed up and shout at
HEAD SOMMELIER AND MANAGER OF
LUTYENS RESTAURANT
ANDREW CONNOR
QUAFFERS CORNER
was asked for my opinion the other day
about iPad wine-lists. For what its worth
Im not really in favour for a variety of
more or less abstruse reasons. But I want
to use it to expand on the larger issue of mar-
keting led decisions, especially where they
involve wine packaging and service.
Marketing people love a Unique Selling
Point. There are a lot of wine offerings com-
peting for your attention and its natural and
understandable to want to stand out from the
crowd but whats best from a marketing point
of view doesnt always make sense in other
respects.
A classic example is the giant bottles so
beloved of winemakers in the New World.
Theres no real advantage to the wine to being
stored in a heavy bottle (maybe a strictly the-
oretical one of being more robust if dropped
from a height) but the bottle looks expensive
and can command a premium.
Its not a decision without its costs: for the
planet, when the bottle has to cross half the
world, and for your arm when you have to lug
it back from the shop. Vote with your wallet is
my advice.
Another example is the number of exotic
and expensive pieces of equipment for the
preservation of wines by the glass.
Its a complicated and resource hungry
solution to a problem that can be solved with
better matching of the selection by the glass
(and the format of bottle) to the needs of the
outlet. Lets be clear the umpty-thousand
pound machine doesnt magically preserve the
wine for weeks on end.
In reality, while it can extend the life of the
wine a little, it is a marketing tool to allow the
restaurant to tell you a marketing story. Trust
your nose: I have been served oxidised wines
in places that employ gas preservation sys-
tems because their throughput of wine is sim-
ply insufficient.
It wouldnt be a wine column without some
kind of recommendation. But for this week,
lets embrace localism and drink something the
British Isles produce at an exemplary level:
dark beer. The ubiquity of Arthur Guinnesss
dry stout can blind you to the range of options
in the category, some of them carrying just a
hint of sweetness very agreeable in these
damp and dreary days.
This week I have enjoyed old favourite
Samuel Smiths Oatmeal Stout and Fullers
London Porter both widely available with little
marketing fuss to speak of.
Follow Andrew on Twitter @LutyensWine
Wine marketing
is a tricky game
FOOD & BOOZE NEWS
BY STEVE DINNEEN
POILANE OPENS ALL-DAY VENUE
Artisan bakery Poilne has launched its first din-
ing venue in the UK. The Cuisine de Bar by
Poilne at 39 Cadogan Gardens hopes to attract
customers already familiar with its renowned
chain of Parisian bakeries. Open until 8.30pm, it
promises to serve wine as well as its famous
bread and coffee (although its licence hadnt
arrived when I visited last weekend). It spe-
cialises in tartines, with its ingredients sourced
from local vendors, although at 10 for an open
sandwich, it isnt cheap.
FAST FOOD DOESNT HAVE TO MEAN BAD FOOD
Chipotle Mexican Grill has launched a second
London restaurant on Baker Street, continuing
its push from the US, where it owns over 1,000
branches. It is essentially a high-end fast food
parlour, with its selection of burritos and tacos
being put together at the counter in front of
you. It says its ingredients are all high quality
and, where possible, locally sourced. It may be
fast food but its a far cry from a greasy burger
joint and, unlike McDonalds, you can enjoy your
meal with a margarita.
Lifestyle | Restaurants
UNION JACKS
4 Central St. Giles Piazza, WC2H 8AB
Tel: 020 3597 7888
FOOD hhhii
SERVICE hhhhi
ATMOSPHERE hhhhi
Cost per person without wine: 22
S
ometimes moments come along
that give you a real sense of your
own mortality. For the most part
theyre fairly clichd, like realising
you cant name a single song in the top
10, or that people less than half your age
can comprehensively beat you at video
games. But sometimes they have a more
human face. Sometimes that face is
pudgy and more than a little slappable.
Sometimes it is the face of celebrity chef
Jamie Oliver.
Sitting in the first of a planned chain of
Union Jacks (sans apostrophe) restaurants,
I experienced middle age. Suede, Cast and
the Bluetones played on the stereo; the
dessert menu included Marathon Bar ice-
cream and arctic rolls. Its aimed at chil-
dren of the 80s, who listened to Oasis as
teenagers and remember a time before
Snickers. This restaurant, fronted by a
middle-aged, middle-class celebrity chef, is
aimed at me.
As the name suggests, Jacks is a cele-
bration of Britishness, albeit a very nar-
rowly defined probably apocryphal
Britain where people use tea-cosies and
eat fish and chips on Blackpool beach.
The dcor seems to be based on a public
school canteen: the menu is pinned on a
giant letter board above the open
kitchen; mis-matched, shabby chic seats
are covered in stickers from teen maga-
zines; the napkins emblazoned with
Union Jacks heraldic logo bring to
mind the Keep Calm and Carry On
wartime posters.
The space at Central St Giles is hardly
ideal restaurant fodder its a vast, air-
craft-hanger of concrete and glass, with
gloomy, cavernous ceilings.
Careful interior design to some extent mit-
igates this, with a giant central kitchen
pushing the tables into orbit around it, mak-
ing you feel less like youre dining in a cathe-
dral. The floor-to-ceiling windows circling
the entire restaurant also draw your eye out-
wards, although this isnt necessarily a good
thing the Central St Giles landscape is
hardly inspiring, with Steven Gontarskis
soulless abstract sculpture only slightly
more interesting than the expanse of grey
paving slabs.
In keeping with the British theme (and
theme feels like the right word), and with
Olivers well-publicised personal agenda,
most of the ingredients are locally sourced,
with their provenance listed in a section of
the menu. So what are your options?
Yorkshire puddings and gravy? Steak and
kidney pie? Fish and chips? Nope: pizza.
While you wont actually find the word any-
where in the restaurant (they sell flat-
breads), Union Jacks is essentially Italian
food with a twist, which isnt surprising
when you learn head chef Chris Bianco is the
owner of Arizonas (apparently) renowned
Pizzeria Bianco.
Thats not to say it isnt good. The bowl of
chilli mussels I had to start was so delicious
I used a discarded shell to scoop up the left-
over sauce (given the school canteen theme,
I figured this was probably within the
bounds of acceptability). The garlic mush-
rooms were a little light on garlic and heavy
on fat but were perfectly edible.
Next came the pizza (OK, flatbread). I went
for the Woodman, topped with wild mush-
rooms, red onions and fennel. The base was
crafted to perfection, crispy on the surface
and doughy underneath, with a hint of char-
coal where the bread has risen in the wood-
fired oven. Its simple, tasty food exactly
the kind of thing Oliver is famous for creat-
ing.
Dessert is where Jacks lets the British
theme run away with itself. The menu
includes bitter chocolate mousse with Gary
Baldy biscuits, Earl Grey tea flavoured ice-
cream and Eton Mess. I tried the Marathon
icecream, served in an 80s-style silver goblet,
which bore little resemblance to its name-
sake and came garnished with what
appeared to be an inedible cardboard stick
with raisins stuck to it. The arctic roll was
only marginally better, with the heap of tart
berries overpowering the dull chocolate ice-
cream. While it scores points for nostalgia
this is exactly how I remember arctic roll
tasting there is a reason I havent tried it in
15 years.
To end the meal you can forego the usual
coffee in favour of a builders tea. I didnt:
while it may be a talking point, there is no
substitute for a thick dose of Italian caffeine
after a meal.
As youd expect from Oliver, Union Jacks
runs like clockwork hes done this all
before. The waiting staff are polite, attentive
and very, very pretty. Its great fun the
music, the menu, the thoughtful little
touches like badges arriving with your bill
are all talking points.
The food wont blow you away but with
the bill coming in at around the same as a
Pizza Express mine was under 50 includ-
ing a cocktail you certainly wont be com-
plaining.
Union Jacks
seems to be
themed around
a public school
canteen
Picture: DAVID
LOFTUS
Union Jacks may be
a pizzeria in disguise
but its still a fun
way to dine, says
Steve Dinneen
0844 826 8000
WickedTheMusical.co.uk
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12.45amThe Zone; ITV News
Headlines
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10
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20
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45
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38 13
3 10
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45
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29
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33
35
4
6
7
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18
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27
14
11
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12
34
17
10
28
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
1 Underground tunnels (5)
4 Perhaps (5)
7 Speak softly or
indistinctly (6)
9 Cut, as of wood (4)
10 Bill of fare (4)
11 Loves intensely (6)
13 Landscaped complex
of shops (4)
15 Cease (4)
17 Colour of the rainbow (6)
20 Man-eating giant (4)
21 Divisions of a week (4)
22 Remove by cutting out (6)
23 Biblical tower intended
to reach to heaven (5)
24 Suburban residences
(abbr) (5)
DOWN
1 Direction
indicator (7)
2 Star sign between
Leo and Libra (5)
3 Foam or froth
on the sea (5)
5 Adopted in order to
deceive (7)
6 Intestine (5)
8 Breathe (7)
12 Quick-witted
retort (7)
14 Big feline (7)
16 Diadem (5)
18 Connected series
or group (5)
19 Mode of
expression (5)
T
E
I
O
Y T
R
S
P

4
4

4
4
A B D H A V O C
R E L E A S E A A
E E M A L B
N E W Y E A R S E V E
A E G M R
C O A L I T I O N
Y S L T A
O F F T H E S H E L F
U A I O D T
N C S E A S I D E
G U E S S K T R
7 6 8 9 2 1
1 4 8 2 6 3 7 9 5
7 4 2 6 3 1
8 4 9 7 1 9
2 1 6 7 4 8 9 6
9 3 8 9 5 3 8
4 2 1 6 3 2 1 4
7 9 8 5 7 9
1 6 2 5 3 1
6 8 4 7 2 9 3 1 5
9 3 3 6 3 9
4
4
4
4
4
4
4
4
4
WORDWHEEL
The nine-letter word was
FARMHOUSE
Lifestyle | TV&Games
I
TS BEEN an unforgettable year for
the sport of golf and one that will
last long in the memory. With
Europeans occupying the top four
spots in the world rankings and two
more enjoying success at the Majors,
there is certainly plenty to be enthusi-
astic about heading into 2012 which
is, of course, a Ryder Cup year.
HIGHLIGHT OF THE YEAR
Rory McIlroys victory at the US Open
was one of the best Major victories Ive
ever witnessed. It was an almost flaw-
less performance and showcased an
iron resolve that some doubted he pos-
sessed.
McIlroy will go on to win many
more Majors, but it is unlikely, for all
his class, that Darren Clarke will enjoy
many better days the one in July when
he lifted the famous Claret Jug. His
victory was as surprising as it was
emotional and for that reason he just
pips Rorys breakthrough success.
PLAYER OF THE YEAR
He might still be searching for his
maiden Major victory but for his sheer
consistency you cant look past Luke
Donald, the world No1, if youre hand-
ing out accolades for the player of
2011. Hardly a significant tournament
goes by without the Englishmans
name featuring somewhere close to
the head of the leaderboard.
DISAPPOINTMENT OF THE YEAR
For all the great memories the last 12
months have provided us with, the
death of my dear friend Seve
Ballesteros cast an enormous black
shadow. Seve was not only a champi-
on golfer, but a wonderful human
being. He had a tremendous impact
on my own career and it was a privi-
lege to compete against him as well as
play with him in seven Ryder Cups.
SHOT OF THE YEAR
Such is the quality on show these days
were well used to witnessing incredi-
ble acts of escapology, but Bill Haass
recovery shot at the FedEx Cup was
one of the most extraordinary shots
Ive ever seen.
Getting the ball virtually stone dead
from shallow water would have been
highly commendable under normal
circumstances. But to have accom-
plished it in a play-off, in a tourna-
ment offering the winner a $10m
prize was truly astonishing and pro-
vided a sensational moment of sport-
ing theatre.
ONE TO WATCH IN 2012
Im convinced Tiger Woods is going to
have a significant say in matters next
year, such has been the level of form
hes displayed over the last few weeks
in Australia.
That said, Im really looking for-
ward to seeing how young
Englishman Tom Lewis gets on next
year. He made the right decision in
turning pro after The Open and has
made a dream become a reality by
earning his tour card after winning
the Portugal Masters. To me he looks
like the complete package.
Sam Torrance OBE is a multiple Ryder Cup-
winning golfer and won 21 European Tour
titles. Follow Sam on twitter @torrancesam.
Sport 36 CITYA.M. 29 NOVEMBER 2011
Results
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email sport@cityam.com
Consistency
marks Donald
out as the
star of 2011
GOLF COMMENT
SAM TORRANCE
Luke Donald will end
the year as world No1
Picture: ACTION IMAGES
Sport
BRITISH pair Jenson Button and Lewis
Hamilton have vowed to knock Red
Bull off the podium and reassert
McLarens dominance next season.
Australias Mark Webber capped a
record-breaking year for the team by
winning Sundays Brazilian Grand
Prix, with colleague Sebastian Vettel
signing off his emphatic world title
defence with a rare second place.
Button completed the podium to
secure a highly creditable second
place in the championship, while
Hamiltons gearbox failure highlight-
ed a mixed campaign that saw him
finish fifth.
Although comfortably runners-up
in the constructors standings,
McLaren trailed more than 150 points
behind Red Bull, but the two former
world champions are confident the
2012 battle will be far closer.
There are a lot of positives to take
away from this year, said Button,
who enjoyed 12 podium finishes
from 19 races.
Well have a strong winter and
come out fighting from the first race.
Weve just got to start the season a bit
more strongly, thats all, and thats
what well be aiming to do. We want
to make it hard for Red Bull in 2012.
Hamilton, who buried the hatchet
with Ferraris Felipe Massa after vying
closely with him once again this sea-
son at Interlagos, added: I enjoyed
my race while it lasted. I was chal-
lenging Felipe and I was hoping Id
get him, but then the gearbox failure
stopped me.
Its been a long year, and I want to
say a huge thank-you to the team.
Theyve never given up, and theyve
worked incredibly hard all season. We
didnt get the ultimate result we
wanted, but we had some great times
along the way. Ill be attacking next
season; 2012 will be my year.
McLaren principal Martin
Whitmarsh said he had been encour-
aged by recent progress in the devel-
opment of next years car and backed
Hamilton to emerge stronger from a
season of difficulties on and off the
circuit.
Hes already focusing on 2012, and
Im sure hell prepare for the new sea-
son with his customary determina-
tion and will to win, said
Whitmarsh.
I sat in the project review meeting
last week and we had made some
really good progress, so I came out of
it really feeling good. We have to keep
that momentum now. I think the
team is working well, and I am sure
we are going to have both drivers in
good shape next year.
McLaren pair
aim to be Red
Bull fighters
BY FRANK DALLERES
FORMULA ONE
1. Red Bull-Renault 650 pts

2. McLaren-Mercedes 497
3. Ferrari 375
4. Mercedes 165
5. Renault 73
6. Force India-Mercedes 69
7. Sauber 44
8. Toro Rosso-Ferrari 41
9. Williams Cosworth 5
10. Lotus-Renault 0
11. HRT-Cosworth 0
12. Virgin-Cosworth 0
TABLE | CONSTRUCTORS CHAMPIONSHIP
1. Sebastian Vettel (Red Bull) 392 pts
2. Jenson Button (McLaren) 270
3. Mark Webber (Red Bull) 258
4. Fernando Alonso (Ferrari) 257
5. Lewis Hamilton (McLaren) 227
6. Felipe Massa (Ferrari) 118
7. Nico Rosberg (Mercedes) 89
8. Michael Schumacher (Mercedes) 76
9. Adrian Sutil (Force India) 42
10. Vitaly Petrov (Renault) 37
11. Nick Heidfeld (Renault) 34
12. Kamui Kobayashi (Sauber) 30
TABLE| DRIVERS CHAMPIONSHIP
Button (right) achieved his 12th podium finish in Brazil on Sunday, where Red Bulls Webber (left) won Picture:PA
Sport
38
FORMER England captain Mike
Tindall has been handed an interna-
tional lifeline after he was reinstated
to the elite player squad last night, fol-
lowing a successful appeal over the
ban he received for his conduct at the
World Cup.
The Gloucester centre was repri-
manded after the controversial night
out in Queenstown that followed
Englands opening win over
Argentina in Dunedin. Tindall (right)
was fined an unprecedented 25,000
but that punishment has now been
significantly cut to 15,000.
Although it remains unlikely that
the 33-year-old 75-cap Test veteran will
win back his place in time for
the start of Februarys Six
Nations, the door at least
remains open to a potential
return.
Meanwhile, the appeal out-
come is likely to appease The
Rugby Players
Association who
described the original
sanction as extraordi-
nary.
The U-turn is the
latest blow to the
authority of belea-
guered RFU chief
Rob Andrew, who
handed down the
original verdict after an investigation
by Karena Vleck, the unions legal
and governance director.
Explaining his decision, acting
RFU chief executive Martyn
Thomas said there were mitigating
factors which needed to be
taken into account.
He said: Mike did not
intentionally mislead
the RFU team manage-
ment when he stated
that he could not
remember where he
was on the night of
11 September. Mike
expressed deep
regret during the
appeal meeting.
Tindall reinstated in England
squad and fine cut on appeal
FORMER Italy coach Nick Mallett has
performed a U-turn by expressing an
interest in the vacant England man-
agers job, less than a fortnight after
ruling himself out of the running.
The 55-year-old claimed earlier this
month that, with his family settled in
his native South Africa, he would not
be putting his name forward to
replace Martin Johnson.
But speaking yesterday, Mallett sug-
gested were the Rugby Football Union
prepared to wait until March, when
the Six Nations is complete, he might
be in a position to answer their call.
The ball is in the Rugby Football
Unions court, he said. I am now
[out of the running] but wouldnt
rule myself out in future. The
England job would entail taking the
post in time for the Six Nations,
which would mean the new man
would have to be in place by 1
December to get to know the players.
But who knows, there might be a
situation in the future where the tim-
ing is better. My family comes first
and there are issues within the RFU
that need to be resolved.
Timing and family issues aside,
Mallet also revealed he would be
unwilling to take the job were he
forced to answer to a director of
rugby.
He said: A head coach should
report to the board, not a director of
rugby. You wouldnt find Graham
Henry answering to a director of
rugby. The responsibility of the team
is with the head coach and thats how
I would see the job.
Mallett tells RFU he might
be free after Six Nations
BY JAMES GOLDMAN
RUGBY UNION
ARSENAL manager Arsene Wenger

has urged Gunners fans still angry at
Samir Nasris summer defection to
Manchester City not to boo him when
he returns to Emirates Stadium for
the first time tonight.
France midfielder Nasri
provoked fury among some
Arsenal supporters by
refusing to sign a new
contract last season,
leaving the club little
option but to sell to
Manchester City, where
he doubled his wages.
He is in contention to
be in the City side that vies
with his former colleagues for
a place in the Carling Cup semi-finals
this evening, but Wenger has pleaded
with fans to leave their vitriol at the
turnstiles.
I hope Samir gets a good recep-
tion. Personally I want every player
who has played for us to be respected
when they come back, said the
Gunners coach, who paid 12m for
him as a 21-year-old in 2008.
Samir improved tremendously
while he was with us. He has devel-
oped fantastically well from a non-
scoring player to a guy who could
make a decision. He was an impor-
tant player here and Im sure he will
be for Man City as well.
Wenger and his opposite number
Roberto Mancini are expected to
make sweeping changes to teams
who both drew in the Premier League
at the weekend. Nasri (inset) played
65 minutes of Citys 1-1 stalemate at
Liverpool, although their midfield
options have been limited slightly by
the suspensions of Mario Balotelli
and Gareth Barry.
Young Arsenal midfielders Alex
Oxlade-Chamberlain and
Emmanuel Frimpong are set
to be recalled while
Marouane Chamakh is in
line for a rare start as
Wenger rests senior stars.
Despite the changes,
the Frenchman insists he
is keen to avoid a defeat
that could knock his teams
recovery from a dreadful start
to the season, even if he admits
to prioritising getting back into the
top four.
Its always a blow to lose a game.
Today that is not going through my
mind, it is just to do as well as possi-
ble and to qualify, he added.
When we you are in a competition
of course you want to win it. The tar-
get is to finish in the top four though,
its as simple as that. What engages
the whole future of the club is being
in the top four.
Lay off Nasri:
Wenger tells
fans not to
jeer Samir
BY FRANK DALLERES
FOOTBALL
ARSENAL
MAN CITY
BY JAMES GOLDMAN
RUGBY UNION
Fans from Speeds former

clubs, including Leeds, laid
tributes to the 42-year-old,
who was found hanged at
his home in Cheshire on
Sunday.
Picture: REUTERS
MR RELIABLE DONALD
IS THE PLAYER OF 2011
SAM TORRANCES GOLF REVIEW
OF THE YEAR: PAGE 36
39
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LIVERPOOL manager Kenny Dalglish
has branded the scheduling of
tonights Carling Cup quarter final
against Chelsea irresponsible.
The Scot believes the Professional
Footballers Association should have
stepped in to help avoid a scenario
which sees his side forced to travel to
Stamford Bridge just two days after
Sundays league 1-1 draw against
Manchester City.
Forty-eight hours is a bit irrespon-
sible for the people whove organised
the dates of the matches. Its not just
us, its Man City, he said.
To ask any team or any players to
play two games of high intensity in 48
hours is a bit of a joke.
I dont know why the PFA
(Professional Footballers Association)
dont come in and say something
about it its their players. For me its
difficult to understand why they
dont come out and say something.
Chelsea manager Andre Villas-Boas,
meanwhile, will be without suspend-
ed captain John Terry and the cup-
tied Raul Meireles, but youngsters
Josh McEachran and Romelu Lukaku
are likely to be handed rare starts.
Dalglish: Fixture pile-up a joke
BY JAMES GOLDMAN
FOOTBALL
SPORT | IN BRIEF
Lions braced for Hong Kong start
RUGBY UNION: The British and Irish
Lions will meet the Barbarians in Hong
Kong in an historic and glitzy curtain-
raiser to the 2013 tour of Australia. The
stop-off in Asia precedes nine fixtures
Down Under, including three Test match-
es, at Brisbanes Suncorp Stadium, the
Etihad Stadium in Melbourne and then
Sydneys ANZ Stadium. The Lions will
also face all five Super Rugby franchises
Western Force, Queensland Reds,
Waratahs, Brumbies and Melbourne
Rebels and a combined New South
Wales and Queensland Country team.
The Lions, who under the captaincy of
Martin Johnson lost 2-1 on their most
recent trip to Australia in 2001, complete
the five-week expedition with the poten-
tially decisive Sydney Test on 6 July.
Cav leads the way for BBC award
CYCLING: Sprint sensation Mark
Cavendish is the early favourite to claim
the prestigious BBC Sports Personality of
the Year Award after the 10 nominees
were announced yesterday. The 26-year-
old has enjoyed a magnificent year,
becoming Britains first winner of the
Tour de France green jersey and Britains
first male world road race champion for
46 years. Golf is well represented in the
list, with world No1 Luke Donald, Open
champion Darren Clarke and US Open
winner Rory McIlroy all boasting strong
claims for the title. Two members of
Englands No1 ranked Test team, skipper
Andrew Strauss and opening batsman
Alastair Cook, make the cut as do Mo
Farah and Dai Greene who won gold
medals at the athletics world champi-
onships in Daegu. Boxer Amir Khan and
world No3 tennis player Andy Murray
complete the list.
Haye confirms comeback talks
BOXING: Former heavyweight world
champion David Haye is in talks to fight
WBC title holder Vitali Klitschko in
March 2012. Haye, 31, who retired in
October after losing to the Ukrainians
brother Wladimir, says he will lower his
pay demands to make sure the fight hap-
pens. I havent seen a contract but
theres definitely talks going on, he said.
O
NE topic monopolised the con-
versation when I met my for-
mer Rangers team-mate
Richard Gough for lunch today,
and that was the utter disbelief
throughout the football world at the
tragic death of Gary Speed.
So much has been said already but
it bears repeating what a fine exam-
ple he was as a player, manager and a
person. The fact that fans from all
teams have been united in their
praise for him is a fitting testament.
I knew him. I wouldnt say he was a
friend but I played against him fairly
frequently in the early days of his
career and subsequently caught up
with him at a few dinners.
As a player, Gary was a managers
dream: athletic, a goal threat, brave,
consistent and non-disruptive.
Dressing rooms need different types
of player but he was one any boss
would put their mortgage on to turn
in a totally professional performance.
For his all-round application and
demeanour, I would put him in the
top five players of the Premier League
era. He began it as a champion, hav-
ing just helped Leeds win the first
division, so his standards were always
high. And he just got better and bet-
ter with age.
As a budding manager, he also
showed signs of rapid improvement.
His start at Sheffield United was
tricky, although he didnt have that
long there to address the teams fail-
ings. When he took the job of manag-
ing a struggling Wales side, I
wondered what he was getting into.
But what a response. Two or three
games later, the team looked trans-
formed into a group with energy and
belief. It was a miraculous turn-
around, and theyll never be able to
take that away from him. I hope that
whoever takes over from him will be
able to continue in the same vein.
Perhaps one of Garys most distin-
guishing traits of all was his modesty.
He was so level-headed over a long
period of time. He never looked for
glory or self-promotion and nor was
he tainted by the money, success and
acclaim that deservedly came his way.
He had no enemies in the game,
and that speaks of great personal
traits to go along with his footballing
pedigree. From what I knew of him,
he was every bit as consistently
decent off the field as he was on it.
Trevor Steven is a former England foot-
baller who played in two World Cups, and
was the first Englishman to win league
titles in three different countries. He now
works as a media commentator.
As consistent
off-field as on,
Speeds death
stunned us all
FOOTBALL COMMENT
TREVOR STEVEN

Cityam 2011-11-29

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