Issue 1,177 Thursday 15 July 2010

BUSINESS WITH PERSONALITY FREE

www.cityam.com

OCADO REELS AS LONDON’S

HOTTEST WINE
RIVAL IPO FAILS BUFFS
UNCOVERED
IN FOOD &
DRINK
▲

MARKETS
BY DAVID HELLIER AND STEVE DINNEEN
OIL and gas group Fairfield Energy last night

P18-19
pulled its upcoming stock market flotation
in a move that further undermines the
chances of online grocer Ocado floating at a
sky-high valuation of £1bn.
Fairfield was hoping to raise £330m as
part of its flotation but on Tuesday it
became clear that the group’s advisers were
having trouble garnering support.
Yesterday sources said the group had firm
takers for around half of the new shares on
offer but this was deemed insufficient for
the transaction to go ahead even at the
lower end of the price range.
Analysts said that the shock decision to
pull the Fairfield deal, mainly on grounds of
volatile markets, was bad news for Ocado.
Analysts have queried the £1bn valuation
Ocado’s advisers are hoping to achieve.
Says Clive Black, Shore Capital’s head of
research: “Markets are very volatile at the
moment so any kind of fundraising is tricky.
Fairfield pulling its flotation doesn’t help
Ocado. It’s a bad context to try an IPO. It’s
not only Fairfield that has had to pull – you
have to remember New Look earlier this
year.
Black added: “But our main problem
remains the price. It’s simply too much to
invest in at that level and they need to lower
the value. Will the IPO go ahead? We will
have to see what comes out of the US. I
believe they are over there speaking to some
big investors and this will really be the key
to whether they can get it away or not.” Ocado chief executive Tim Steiner (r) hopes to have better luck than
Although fund management group Fairfield chief executive Mark McAllister Picture: David Sillitoe
Jupiter Asset Management managed to get
its flotation away last month, albeit at a
reduced price, there have been some high own specific considerations but it does have culty getting its issue away but it is the sec-
profile casualties this year of the nervous a strong brand and it is a household name. It ond time the group has tried and failed to
market conditions. may struggle to meet price expectations, float this year. Fairfield’s board met last
The retailer New Look and the entertain- though, and in the end it will come down to night to discuss its options. Ocado said last
ment group Merlin were both forced to pull whether existing shareholders will be pre- night its float was going according to plan.
IPOs earlier this year. pared to accept the dilution that will come “The Ocado team have had a great reaction
Susan Walker, head of the Quoted from pricing at a lower level.” in the US,” a spokesman said.
Company Team at KPMG said: “Ocado has its Many felt Fairfield would have little diffi-

LSE BOSS SLAMS REGULATION

FINANCIAL SERVICES fle enterprise, a consequence he said the LSE the exchange’s competitive edge is finally
▲

BY VICTORIA BATES
LONDON Stock Exchange chief executive
Xavier Rolet yesterday warned that uncer-
tainties over the regulatory environment are
crippling the City.
“It is almost inhumane, the level of regu-
latory uncertainty financial services busi-
nesses are facing today,” Rolet told City A.M.,
adding that getting to grips with the ever-
changing regulatory landscape “goes
beyond the abilities of any rational human
operator”.
Rolet cautioned that the first impact of
such deep-rooted uncertainty is always to sti-
had witnessed first hand with the growth
companies listed on its Alternative
Investment Market.
“The first thing affected by extreme regu-
latory uncertainty is that it inhibits appetite
for making bets, affecting innovation,” he
said. “We have seen that in our junior mar-
ket very clearly.”
Rolet said regulation drives 80 per cent of
the decisions made by the LSE, from the
changes affecting the clearing of derivatives
to the regulation of the balance sheets of its
banking clients.
Rolet’s comments came as the LSE’s first
quarter results showed his drive to regain
starting to pay off. The bourse has managed
to claw back market share in cash equities
trading from new rivals like Chi-X and
Nasdaq OMX after over a year of cost-cutting
and streamlining measures. The LSE gained
almost three per cent in market share of
FTSE 100 cash equities trading over the first
quarter, from 54.8 per cent in April to 57.4
per cent in June.
Group revenue rose by one per cent to
£158.2m despite the impact of moves to
improve competitiveness by reducing tariffs.
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 2 News
Dangers of psychological groupthink
EDITOR’S LETTER
ALLISTER HEATH
THERE is something strange about
human psychology – or at least, a
major flaw in the way we extrapolate
trends based on a very limited
amount of recent historical data. This
is of major importance to the way we
make predictions about the economy
and the performance of individual
companies.
Whenever something goes badly
wrong for a long time, the assumption
almost invariably becomes that this is
the new normal; most forecasters
then become too pessimistic. Booms
produce the opposite result: forecast-
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News Editor Ben Griffiths
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WHAT THE OTHER PAPERS SAY THIS MORNING
FRANCIS MAUDE TACKLES CIVIL
SERVICE PAY-OFFS
Francis Maude, the Cabinet Office
minister, attempted to force the hand
of civil service unions yesterday as he
laid emergency legislation to slash
their redundancy terms while offer-
ing negotiations on a new severance
deal. With up to 100,000 civil service
jobs likely to go during the next few
years as most departments’ spending
is cut by 25 per cent, a bill laid before
parliament yesterday reduces their
redundancy terms.
FRANCE AND GERMANY SEEK TO MEND
RIFT
Wolfgang Schäuble, Germany’s
finance minister, will attend a full
French cabinet meeting next week in
a push to forge a common French and
German front on proposals for euro-
zone governance. In a series of meet-
ings in Paris, Schäuble will attempt
ers become far too optimistic, especial-
ly during the tail end of the good days.
Those who remain calm throughout
the cycle make the best forecasters;
but groupthink and panic mean that
they are often shunned, mocked and
even hounded out of their jobs. Take
the media industry. At the height of
the bubble, analysts used to think that
the total amount of advertising in the
world economy would keep on grow-
ing at an extremely fast rate; eventual-
ly, there would be so much of it that
hundreds of new firms – such as
Facebook – would easily make a
killing relying on it. Then came the
recession – and after a few disastrous
quarters of falling GDP and an even
worse slump in ad dollars, the mood
and fashion changed. Suddenly, every-
body started to argue that it was all
over, that the total volume of advertis-
ing would be permanently much
reduced and would never bounce back
and that all advertising-based busi-
ness models were defunct.
As you might imagine, both
Credit Suisse
PCs searched
FINANCIAL REGULATION
▲
BY MARION DAKERS
CREDIT Suisse offices throughout
Germany were searched by investiga-
tors yesterday as part of a crackdown
on tax evaders.
A search involving 13 offices and
150 tax officials focused on unnamed
employees at the Swiss bank who
may have helped clients evade taxes.
“The searches won’t be finished by
the end of today or perhaps not even
tomorrow,” a spokesman for the pros-
ecutor’s office said yesterday. “We
have computer specialists on location
copying the hard drives.”
Credit Suisse spokesman Marc
Dosch confirmed the searches, say-
ing: “Credit Suisse is cooperating
with authorities. As this concerns an
ongoing investigation we are unable
to comment further at this moment
to reconcile differences between
France and Germany on a number of
issues.
ITALY PREPARES TO PASS AUSTERITY
PACKAGE
Italy’s Senate is today expected to
approve the centre-right govern-
ment’s controversial €25bn austerity
package, with Silvio Berlusconi
resorting to a vote of confidence to
ram through his cuts in the face of
considerable dissent from within his
own coalition.
CROWN ESTATE TO RETURN A £211M
SURPLUS
The Crown Estate is to return a
£211m surplus to the Treasury, raised
from the sovereign’s hereditary prop-
erty holdings, which includes land
across London and the UK. The Crown
Estate will reveal today that the capi-
tal value of its holdings has increased
10.4 per cent to £6.6bn in the year to
March, leading to a surplus of
£210.7m in the period.
extreme viewpoints were faulty.
Advertising expenditure has started to
recover, though of course the market
remains tough. ITV, a firm that was
written off just a few months age, will
see its 2010 advertising growth hit 10.9
per cent, and earnings rise by 10 per
cent, according to bank of America
Merrill Lynch (which remains overall
bearish on the firm). US magazines –
which were widely believed to be in
terminal decline as a result of the web
and the downturn – enjoyed a 5.7 per
cent growth in advertising revenues
in the second quarter. For the first
time in nine quarters, both total mag-
azine pages and rate-card-reported rev-
enue posted gains, according to
Publishers Information Bureau. It is
also now clear that the free daily
newspaper model can work wonders
when executed properly.
Another example of excessive bull-
ishness, followed by excessive bearish-
ness is, of course, commentators’
perception of the health of the overall
economy. I remember when Shriti
in time.”
Switzerland’s second-biggest bank
maintained that its operations in
Germany and elsewhere comply with
local laws. It banned employees from
travelling to Germany when the
investigation was launched.
The probe relates to a CD contain-
ing details of 1,500 Credit Suisse
clients that fell into the hands of
German tax authorities in March.
It is thought thousands of clients
have already come forward to repay
undeclared tax bills in anticipation of
criminal proceedings.
Credit Suisse chief
executive Brady
Dougan says its
operations in Germany
comply with local laws
EUROPE WARNS OBAMA: THIS
RELATIONSHIP IS NOT WORKING
Europe’s disappointment with
Barack Obama’s presidency is laid
bare today as the EU’s most senior fig-
ure calls for a dramatic effort to
revive transatlantic relations. The
President of the European
Commission told The Times that the
new era at the White House was in
danger of becoming a “missed oppor-
tunity” for Europe.
BBC SECRECY OVER HIDDEN
EXECUTIVES COSTING £10M A YEAR
The BBC is spending nearly £10m a
year employing highly paid execu-
tives on “hidden” contracts that are
not included in its £1bn wage bill.
The corporation has admitted that in
the past year it hired 139 staff as com-
mercial contractors, with 29 earning
six-figure fees, but will will not reveal
their names or job titles.
Vadera talked of green shoots in early
2009; she was spot on – the money
markets had just started functioning
again – yet she was ridiculed. For
months after that, newspapers were
forecasting a 1930s-style depression
and a total collapse, long after it was
clear that the worst of the financial
crisis was over and that it was merely
a matter of time before things sta-
bilised. Now many commentators
have convinced themselves that we
are facing another, double-dip reces-
sion and that unemployment will
remain elevated for ever. Of course,
they may end up being right (though I
very much doubt it) but the point is
that these sorts of forecasts are all too
predictable. They always follow reces-
sions. Forecasts tend to undershoot in
the early stages of a recovery and to
overshoot at the peak of the boom.
The best analysts and investors are
those who understand this – and hold
their nerve when everybody around
them falls prey to groupthink.
allister.heath@cityam.com
DLR workers are striking over pay and conditions
DLR strike dates decided
TRANSPORT
▲
BY EMMA SADOWSKI
COMMUTERS travelling into the City
on the Dockland Light Railway (DLR)
next week could face severe disrup-
tions as trade union RMT yesterday
announced strike dates for workers
on the line.
From 4am next Friday morning,
DLR workers will walk off the job for
three 24-hour periods, including 27
July and 6 August.
RMT said the strike was a result of
CHARITY TAX RELIEF BREAKS £1BN
BARRIER
According to HM Revenue & Customs
(HMRC), the total value of Gift Aid
donations in the year to April 2005
was £2.82bn but that had risen to
£4.57bn by last year. Because the ‘Gift
Aid’ box enable them to reclaim basic
rate tax relief from HMRC, the tax
authorities made total charitable
donations of just over £1bn last year.
CO-OPERATIVE TO ACCEPT CONTACTLESS
PAYMENT FROM NEXT YEAR
Supermarket shoppers will from next
year be able to pay for their groceries
by Oyster-style payment cards. The Co-
operative will accept so-called “con-
tactless payment” cards, similar to the
Oyster cards used by commuters on
the London Underground. Customers
will not need to sign, or enter any PIN
security code – they will merely have
to touch their cards on a reader.
CITYA.M. 15 JULY 2010
NEWS | IN BRIEF
Treasury to meet with bankers
Britain’s biggest banks are set to clash
with the government today as ministers
try to force HSBC, Barclays and
Santander to agree to commitments on
business lending. George Osborne and
Vince Cable are also expected to push
for the introduction of net lending tar-
gets when they meet with the banking
bosses at the Treasury this afternoon.
The discussion will also include bankers’
pay and regulation. The coalition hopes
banks will sign up to new lending tar-
gets that would be higher than existing
agreements with the state-controlled
RBS and Lloyds.
Singapore sees sharp growth
Singapore’s economy grew more sharply
than expected in the second quarter, in
a further sign of an Asian-led economic
recovery. Gross domestic product (GDP)
increased by 26 per cent in the last
three months compared with the fourth
quarter of 2009. Compared with the
same period last year, GDP rose by 19.3
per cent. The government raised its-
growth forecast from nine to 15 per
cent, but warned foreign exports could
slow in the second half of the year.
Picture: PA
failures by DLR’s operator, Serco, to
make adequate payments to employ-
ees for the increased workload and
added train carriages.
RMT general secretary Bob Crow
said: “Our members have shown once
again that they are simply not pre-
pared to take on more work without
being properly compensated by the
company.”
Serco said it is in discussions at the
moment with the RMT union and is
confident an agreement would be
reached.
COAL-TRADE LOSSES STING JP
MORGAN CHASE & CO
J.P. Morgan Chase is expected to
report a healthy second-quarter prof-
it today. But one result the bank
would rather not talk about is its bad
trade on coal. Commodities trader
Chan Bhima lost $130m in revenue
while wagering on a decline of
European coal prices, according to
people familiar with the matter.
ALPHA GROUP SEEN SEEKING OK TO
ESTABLISH DARK LIQUIDITY POOL
Alpha Group, Canada’s biggest alter-
native-trading system, is soon expect-
ed to announce that it will seek
approval from securities regulators to
set up a so-called dark liquidity pool
in its ongoing efforts to woo trading
volumes from TMX Group, Canada’s
main stock-market operator, accord-
ing to people familiar with the mat-
ter.
CITYA.M. 15 JULY 2010 News 3

RAMBOURG’S STATEMENT:

Rambourg quits to I have taken the very difficult and pers

decision to resign from Gartmore afte
more than 14 years so that I can devote r
onal

focus on FSA probe of my attention to cooperating with all

FSA’s investigation and regain approve
status. I have been faced with a challeng d
set of circumstances which has resulteding
the

me not being able to optimally fulfil in

duties in the best interests of shareholdermy
specific brokers instead of allowing a
▲

REGULATION
BY MARION DAKERS
GARTMORE’S star fund manager
Guillaume Rambourg has resigned to
concentrate on the Financial Services
Authority’s investigation into his con-
duct, the company said yesterday.
Rambourg only returned to the
firm in April, following an internal
investigation that found he breached
company rules by directing trades to
separate team to allocate trades.
“I have been faced with a challeng-
ing set of circumstances which has
resulted in me not being able to opti-
mally fulfil my duties in the best
interests of shareholders and
investors,” said Rambourg.
Until his suspension in March
Rambourg, aged 38, was responsible
for around a fifth of Gartmore’s
assets with colleague Robert Guy.
and investors. I have, therefore, conclud s
that in the short term at least it is ed
nobody’s interests to continue in in
current reduced capacity. It has bee my
great privilege to deliver performance n a
Gartmore’s Rambourg clients over the years. I wish all the bes for
said he cannot fulfil his Gartmore. t to
duties in the short-term

BP faces ban
on drilling in
US waters
BP IN CRISIS
BY EMMA SADOWSKI
BP could be banned from offshore
drilling in the US for up to seven
years following a US Congressional
vote last night that agreed to pre-
clude companies with poor safety
records from offshore oil exploration
permits.
The proposed law does not name
BP, but would apply to any company
that has experienced 10 or more
deaths in the last seven years. April’s
explosion of BP’s Deepwater Horizon
rig killed 11 workers. The proposal
would need to be passed by both
houses of Congress before it can be
signed into law. If approved it would
be a devastating blow for BP, which
employs a quarter of its 80,000-strong
workforce in the US.
The vote came as the energy giant
began tests of a new cap to fit over the
oil leak. The test, expected to yield
information on how to seal the well
permanently, began late yesterday
and could last up to 48 hours. The test
had earlier been delayed so experts
could review the procedure.
Meanwhile, well partner Mitsui has
informed BP that it will withhold pay-
ment for its 10 per cent share in the
Macondo site, worth $111m (£72m).
Mitsui joins Anadarko, which owns
25 per cent of the well, in its refusal to
pay the oil giant for clean-up costs now
worth $3.5bn. BP said it was disap-
pointed by the decision.
Meanwhile, the company has come
under further fire from the US govern-
ment after secretary of state Hilary
Clinton demanded that BP suspend
offshore drilling in Libya after allega-
tions surfaced that the group lobbied
the UK government to release
Lockerbie bomber Abdel Basset al-
Megrahi. A statement from BP said:
“In late 2007 BP told the UK govern-
ment that we were concerned about
the slow progress being made in con-
cluding a Prisoner Transfer Agreement
with Libya. We were aware that this
could have a negative impact on UK
commercial interests, including the
ratification by the Libyan government
of BP’s exploration agreement. The
decision to release Mr. Al Megrahi in
August 2009 was taken by the Scottish
government. It is not for BP to com-
ment.”

Candover talks AIG chairman

near collapse Golub resigns
▲

PRIVATE EQUITY INSURANCE

TALKS to secure a buyout of equity
house Candover by a Canadian pen-
sion fund are close to collapse, said
reports last night.
As Candover prepares to sell two of
its biggest portfolio companies for
more than £2.5bn, discussions with
Alberta Investment Management
(Aimco) are fizzling out, according to
the Financial Times. Talks have been
ongoing for several months without
any agreement, and insiders expect
the negotiations to fold soon.
Aimco had proposed to provide
fresh funds for Candover, which froze
its buyout fund last year.
American International Group
named director Robert “Steve” Miller
as its new chairman, after Harvey
Golub resigned amid tensions with
chief executive Robert Benmosche.
Benmosche told the board that he
“believes our working relationship as
chairman and CEO to be ineffective
and unsustainable,” Golub wrote in a
letter to AIG director George Miles.
“I’m resigning for the simple rea-
son I believe it is easier to replace a
chairman than a CEO.”
Miller, 68, was elected to the board
in June last year, and is chairman of
MidOcean Partners.
4 News CITYA.M. 15 JULY 2010

Myerson banned from M&A

work for secret takeover plan
effectively prevent any M&A work. options are open to me, including a

▲
FINANCIAL REGULATION
BY MARION DAKERS
CONTROVERSIAL investor Brian
Myerson was banned from working
with FSA-registered companies for
three years yesterday for breaking
takeover rules.
Activist investor Brian Myerson plans to The Takeover Panel said Myerson,
fight the Takeover Panel ruling related to along with colleagues Brian Padgett
a share deal in March 2009 and Daniel Posen, are the first
Picture: Graham Turner
investors in over 20 years to be subject
to its “cold shoulder” powers that
The panel said the trio had secretly
worked together to purchase 6.7m
shares in Principle Capital
Investment Trust in March 2009, in
order to gain majority control and
reinstall Myerson as director.
South Africa-born Myerson, who
has been involved in recent board-
room battles at Liberty, Blacks Leisure
and Scholl, said he was furious at the
ruling and denied any wrongdoing.
“I am now examining what legal
challenge in the European Courts
and whether or not the Panel exceed-
ed its authority in acting as it did. I
will continue to fight and defend
myself and my reputation by all avail-
able means,” he said.
But the ruling was enough for
American fund manager Weiss to call
for Myerson’s immediate resignation
from its board, saying his involve-
ment as a non-executive director was
no longer appropriate.

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forecast for
2010 growth
or call 0845 122 1511

ECONOMY that buying more longer-term US gov-

BY KATIE HOPE
THE US economy’s recovery will be
slower over the rest of the year than
originally forecast, according to the
Federal Reserve, which yesterday
revised down its growth projections
for the first time since the economic
rebound began.
Minutes of the Fed’s meeting, pub-
lished yesterday, showed its central
forecast is now for the economy to
grow between 3 to 3.5 per cent in
2010, down from April’s forecast of
3.2 to 3.7 per cent.
The change suggests the commit-
tee, led by Ben Bernanke, is con-
cerned by recent weak economic data
as well as a possible knock-on effect
from sovereign debt problems in the
Eurozone, with committee members
acknowledging the economy may
need “further policy stimulus” if the
outlook is to worsen.
The minutes did not detail any
steps the Fed might take if it believed
the economy needed more help, but
officials and analysts have suggested
ernment debt or mortgage-related
securities would be possible
approaches. In June, Bernanke said
the committee didn’t think the slow-
ing in the economy seen thus far war-
ranted new stimulative actions
besides those already in place.
The Fed thinks it could take years
for the economy to return to full
health, the minutes showed. Officials
believe an jobless rate near five per
cent is consistent with “full employ-
ment” but their projections showed
the unemployment rate still at about
seven percent by the end of 2012.
The minutes suggest the Fed is likely
to continue to hold its benchmark
lending rate at near zero. The minutes
hit the Dow Jone’s earlier rally, which
closed at 10,366.72, up just 3.7 points.
The Federal Reserve,
chaired by Ben
Bernanke, says 2010
growth will be
between 3-3.5 per cent

SEC’s Schapiro moots changes

to shareholder voting systems
er voting, including advances in tech-
▲

US REGULATION
US SECURITIES regulators yesterday
weighed whether to change voting in
corporate elections, amid calls from
companies and some investors to fix a
system they consider antiquated.
The Securities and Exchange
Commission (SEC) asked the public to
comment on changes to the voting
system, including whether compa-
nies need more information about
the identity of their shareholders.
There are more than 13,000 meet-
ings a year where shareholders can
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. vote in person, via the internet or by
Terms and conditions apply. Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office: The Mound, phone, or by mailing in a proxy form.
Edinburgh EH1 1YZ. Available to homemovers, first time buyers, remortgage customers and buy to let customers. Offer available by phone, But much has changed since the
online or in branch. We may monitor and record calls. Lines are open Monday-Friday 8am-8pm, Saturday 9am-4pm. Compliance number 10/04102
last time the SEC reviewed sharehold-
nology, changes in proxy distribution
services and stock ownership.
“To result in effective governance,
the transmission of this communica-
tion must be and must be perceived
to be timely, accurate, unbiased, and
fair,” SEC chairman Mary Schapiro
said at a public agency meeting.
The SEC issued a discussion paper
to examine the accuracy and trans-
parency of the voting process, share-
holder participation and the
relationship between voting power
and economic interest. The agency is
exploring whether rules are needed
for proxy advisory firms and how to
get more shareholders to participate
in the governance of their firms.
CITYA.M. 15 JULY 2010 Focus on M&S AGM 5

M&S defends
M&S chairman Sir
Stuart Rose
listened to
shareholder con-
cern over broken
biscuits and

£15m pay deal

unhelpful staff for
the last time at the
group’s annual
meeting
yesterday

for new boss

Picture:
Adrian Brooks

SHAREHOLDER VIEWS: WHAT DO YOU THINK OF MARC BOLLAND?

▲

RETAIL holders that he thought “evolution

BY EMMA SADOWSKI and not revolution” would be a good
way to drive the company forward. Interviews by Emma Sadowski
SIR STUART ROSE, the outgoing exec- “This is a great business in general
utive chairman of Marks & Spencer
(M&S), along with the British retail-
and hats off to Stuart Rose and his
team for bringing the company suc-
ARIT AMANA | SOUTH LONDON
er’s board faced investor revolt yester- cess from 2004 and onwards,” said
day over the pay package handed to Bolland. “I don’t know his background but I found him to be personable when he introduced himself
incoming chief executive Marc Rose, who has handed over the day-
Bolland. to-day running of M&S to Bolland, is today. I like that he met his employees, it’s better to know the business from the bottom
With some shareholders calling his set to leave his post as executive chair- up. I look forward to seeing how he will run M&S.”
£15m deal “obscene” at its annual man next March.
meeting, senior executives were left A new chairman, said Rose, has not
defending Bolland’s pay. been found but the company was GOUTAM DATTA | WEMBLEY
Rose, who faced the meeting for making good progress in its search.
the last time, argued that Bolland’s
package was linked to company per- ANALYSIS l Marks & Spencer “Marc Bolland has a good track record but I think the £15m hand shake is ugly. He looks ok as
p
formance as he tried to calm investor 390 long as he doesn’t let anyone buy the company.”
anger.
380
One shareholder told Bolland: “The 348.80
only difference between you and me 370 14 Jul
is I still need to do the lottery.” 360 PARMODH SHARMA | HIGH BARNET
Just over 16 per cent of M&S share- 350
holders voted against the director
340
remuneration package, while 83.8 “Stuart Rose is a hard act to follow and I am not quite sure how Marc Bolland will do. We’ll have
per cent allowed it to go through. 330
Bolland, who joined M&S from WM
to wait and see, but he will have to work very hard because of the economic climate.”
Morrison 10 weeks ago, told share- 19 Apr 10 May 28 May 18 Jun 8 Jul

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 6 News CITYA.M. 15 JULY 2010

Huhne urges EU to
Rio Tinto chief exec-
utive Tom Albanese
said “growth was
back on the agen-
da” of the mining

cut more emissions

giant

Picture:
Micha Theiner
/City A.M.

today’s Financial Times.

▲

POLITICS
EUROPEAN businesses should be hit
by much tougher rules on green-
house gas emissions, according to
energy secretary Chris Huhne and
environmental ministers in Germany
and France.
The politicians called on the EU to
slash emissions by 30 per cent in the
next ten years, instead of the current
20 per cent target, in a joint letter to
The current target will mean
Europe loses low carbon investors to
countries like China, the trio claimed.
The additional cuts would cost
around €11bn to achieve, said the
ministers, which is cheaper than orig-
inally thought because emissions
dropped during the recession.
But the European Commission put
extra targets on ice in May after busi-
nesses complained about the cost.

Rio ready for

growth but
still cautious
▲
MINING
BY MARION DAKERS
RIO TINTO reported a two per cent
fall in iron ore production since last
year and raised concerns of a possible
double-dip recession and slower
Chinese growth yesterday.
The world’s second-biggest iron ore
miner said it was running its mines
close to capacity and forecast total
annual output of 234m tonnes, slight-
ly up on earlier forecasts.
“Markets for most of our products
are strong and the overall long-term
demand outlook is positive,” chief
executive Tom Albanese said in the
company’s second quarter review.
“But in recent weeks, fears about a
possible double-dip recession in
OECD countries and a slight slow-
down in Chinese growth have led to
some weakening in sentiment,”
Albanese added.
The firm said its copper production
fell 19 per cent on last year due to
lower ore grades in several mines,
and that aluminium production may
suffer after power problems in
Quebec. Gold production was also
down 34 per cent.
The firm said the impact of the
slowdown on underlying earnings
would be around $100m (£65.6m).
Expansion in Australia came a step
closer yesterday as the firm has
approved $200m of funding to
enlarge its mines in Pilbara, following
the end of a long-running spat with
the government over the planned tax
on mining operations.
“Growth is firmly back on our
agenda. We have a large range of
options for expansion and invest-
ment competing for capital,” said
Albanese.
The firm is keen to move on from
its ill-timed investment in Alcan,
parts of which were sold off for
$3.6bn during the first half of 2010.
Shares closed 0.5p down yesterday.
ANALYSIS l Rio Tinto
p
4,000
3,134.50
3,800
14 Jul
3,600
3,400
3,200
3,000
2,800
19 Apr 10 May 28 May 18 Jun 8 Jul

China is the key to profit

T
HE manacles strangling Rio
Tinto’s Australian focus may
have been removed, enabling
the miner’s $200m (£130.9m)
investment in Western Australia to
go-ahead, but in reality the 40 per
cent super-tax, since reduced to 30
per cent, was just a distraction.
The dredging at its Cape
Lambert mine in the Pilbara will
help to boost production from a
planned 230m tonnes capacity a
year by 2012 to 330m tonnes in
2016.
But this is just a sideshow. China
is and will remain the main affair.
Chief executive Tom Albanese’s
warning that there would be little
immediate respite from uncertain-
ty surrounding Chinese demand
rings alarm bells. The Asian nation
accounted for almost a quarter of
its revenue in 2009, 24.3 per cent of
its total sales compared to 18.8 per
cent a year earlier, and is now its
largest single market.
China is the world’s largest iron-
ore consumer. Any slowdown in
Chinese demand, as suggested by
recent data, will hit Rio’s profits
hard. Albanese maintains that the
long-term outlook is positive, but
shareholders betting on a share
price recovery are really taking a
punt on Chinese growth, not Rio
Tinto.
BOTTOMLINE
Analysis by Katie Hope
CITYA.M. 15 JULY 2010
BA and Iberia will merge at the end of 2010
Lovells beats
peers with
revenue rise
▲
LEGAL
BY EMMA SADOWSKI
CITY LEGAL giant Lovells has bucked
the trend by posting a rise in 2009
turnover putting it ahead of peers,
which have seen depressed revenue
levels.
Income at Lovells for the year
ended 30 April came to £541.8m,
marking a two per cent rise on the
previous year when income was
£530.6m.
The firm, which has not included
merger partner Hogan & Hartson in
the financial figures, said the rise in
turnover was a result of an increase in
litigation work, which accounted for
34 per cent of the firm’s billings.
Unlike its competitors, Lovells was
not overly exposed to the drop in
M&A activity, according to Hogan
Lovells chief executive David Harris.
“This has been a good year. The real
strength has been through our count-
er-cyclical practice areas. Although
there has been a fall off in transac-
tional work, we have seen strong
growth in litigation and a rise in
restructuring instructions,” said
Harris.
Profits per equity partner (PEP) at
the firm rose by 13 per cent to
£663,000 for the year. Lovells said the
figure, which is a measure of part-
ner’s shareholding in the business,
accounted for certain costs related to
the merger.
In May, Lovells and Hogan &
Hartson made its trans-Atlantic tie-up
official and re-branded as Hogan
Lovells.
Harris said the two firms will com-
bine finances and report on a calen-
dar year next year.
Harris said: “As we look at the next
few months, there appears to be a
broad consensus that a slow and grad-
ual recovery is underway, albeit at dif-
ferent speeds in different markets.”
Facebook refuses to remove Moat tributes Pimco thaws on UK gilts
▲
TECHNOLOGY
BY HARRY BANKS
THE ONLINE networking site
Facebook refused to act against mem-
bers paying tribute to Raoul Moat yes-
terday after Prime Minister David
Cameron said there should be no
sympathy for the dead gunman.
Facebook said it was providing a
forum for debate and there was no
reason to stop people discussing the
Picture: REUTERS
pr
o m i se
e
W i
“1
www.cityindex.co.uk
0845 077 1178
1 point spreads available during our market hours only.
Spreads lowered on our rolling and daily future spread bet markets.
Spread betting can result in losses that exceed your initial deposit.
killer as long as they did not violate
the website’s terms of service.
Moat, 37, killed himself on
Saturday in the Northumberland
town of Rothbury after a standoff
with police, who had been trying to
catch him for a week after he shot
three people, killing one man.
The issue came up during Prime
Minister’s Questions, when
Conservative MP Chris Heaton-Harris
asked Cameron to press Facebook to
EU clears Iberia tie to BA
nership, which will include slot shar-
▲
AVIATION
ing in London and New York.
BY EMMA SADOWSKI Although the Department of
BRITISH AIRWAYS (BA) has landed Transport (DOT) in the US has yet to
approval from European competition grant the airlines antitrust immuni-
regulators to allow its merger with ty, BA chief executive Willie Walsh
Iberia and joint venture with said he welcomed yesterday’s deci-
American Airlines (AA) to go through. sion as an important and vital step
The European Commission (EC) yes- forward.
terday gave antitrust clearance to the He said: “This is a pragmatic deci-
airlines to launch the three-way part- sion so that we can get the joint busi-
t
n a s ”
,
oi pre
d
es:
p S nd
ic
jor
a PRUDENTIAL’S senior independent
sem
e step down from the board once a
th 0 replacement is found, according to
on 10
SE St
T 3 0
F y
all an
W rm 40
Ge nce
a
Fr
take down a discussion page with
ECONOMY
31,500 members called “RIP Raoul
Moat You Legend” from the site. THE BOND house that warned six
“As far as I can see it is absolutely months ago that UK gilts were “rest-
clear that Raoul Moat was a callous ing on a bed of nitroglycerine” has
murderer, end of story, and I cannot relaxed its aggressive stance.
understand any wave, however small, Pimco said yesterday it no longer
of public sympathy for this man,” expects the UK to default, and that
Cameron said in response. “exposure to the UK in the credit
In a statement Facebook said pub- default swap market offers a valuable
lic debate over Moat was being held in opportunity”.
many forums. The world’s second-largest bond
News 7
ness up and running as soon as possi-
ble.”
The EC also gave its approval to the
BA and Iberia merger with no condi-
tions allowing the two airlines to cre-
ate the International Airlines Group
(IAG).
Once BA has received full regulato-
ry approval, the Iberia merger and AA
joint venture will be launched
towards the latter part of the year.
Pru director
could step
down soon
▲
INSURANCE
BY MARION DAKERS
director has told colleagues he will
reports last night.
James Ross, a director at the Pru
since 2004, may retire and trigger a
larger board shake-up at the insurer
following its failed £23.5bn bid for
AIA.
A spokesperson for Prudential told
City A.M. last night: “We are looking to
recruit two non-executive directors in
the future, but cannot comment fur-
ther.”
A post on the Sky News website
reported that the headhunting brief
for the non-executive posts includes
the requirement that either should
be able to fill the role of senior inde-
pendent director, currently held by
Ross, 72.
The firm already needs to replace
Sir Win Bishoff, a non-executive direc-
tor who left the Pru in September to
chair Lloyds Banking Group.
Several large investors in the firm
have called for chairman Harvey
McGrath and chief executive Tidjane
Thiam to resign in recent weeks.
Prudential has not yet selected its
new non-executive members, which
the firm hopes will remove some of
the pressure on current executives to
resign.
ANALYSIS l Prudential
600
p
543.00
580 14 Jul
560
540
520
500
19 Apr 10 May 28 May 18 Jun 8 Jul
holder has switched its stance from
underweight to neutral on gilts,
according to several reports.
The asset manager’s size, with $1
trillion (£659bn) of assets under man-
agement, means many in the market
keenly follow its opinions.
The move could be linked to the
worsening state of European
economies, and the relative certainty
on cuts in the UK since the May gener-
al election.
 8 News CITYA.M. 15 JULY 2010

Former IKB boss avoids prison Moody’s downgrades

cial product which it sold to IKB in default on risky mortgages.
eight Portuguese banks
▲

FINANCIAL SERVICES
2007. Duesseldorf prosecutors said the
BY VICTORIA BATES Ortseifen was fined €100,000 statement constituted a wilful mis-

STEFAN Ortseifen, the former chief
executive of German bank IKB, was
yesterday convicted of market manipu-
lation but avoided going to jail in one
of the few criminal cases to be prose-
cuted in the aftermath of the global
banking crisis.
IKB, one of the highest-profile casu-
alties of the collapse in the US sub-
prime mortgage market, required
billions of euros in bailout money and
is involved in a current case in the US
brought against Goldman Sachs over a
complicated subprime-related finan-
(£83,500) and received a 10-month sus-
pended jail sentence for market
manipulation, with the court ruling
that investors were misled about the
parlous state of IKB’s finances two
years ago. At the time Ortseifen was
earning around €1.6m a year, accord-
ing to IKB’s annual report for 2006/07.
On 20 July, 2007, only days before its
near implosion, IKB sent out a release
to investors saying the bank saw “lim-
ited” impact from the subprime lend-
ing crisis – which was ballooning on
worries that US borrowers would
leading of the markets as it encour-
aged investors to continue buying
shares. “Rather than facing the force
of the market, the accused decided on
a calming press statement,” Judge
Brigitte Koppenhoefer told the court.
Ortseifen plans to appeal, his lawyer
said. “This verdict is crassly wrong,” he
said.
A number of bankers in Europe and
the US have been brought to court in
the aftermath of the credit crisis as
investors seek to recoup billions in
losses.
▲
FINANCIAL SERVICES
MOODY’S Investors Service yesterday
cut the ratings of eight Portuguese
banks by between one and two notch-
es and mostly with a negative out-
look, a day after a two-notch
downgrade of the country’s sovereign
debt.
In a statement, the ratings agency
cited “the government’s reduced abil-
ity to support its banks” and the fact
that top banks have issued debt
backed by state guarantees since the
onset of the global crisis in 2008.
All rated government-backed debt
issues of Portuguese banks have been
downgraded to A1 from Aa2, with a
stable outlook, in line with the
Portuguese government’s debt rating.
The country’s largest listed bank,
Millennium bcp, suffered a two-notch
downgrade to A3/Prime-2 with a nega-
tive outlook, which Moody’s attributed
to the bank’s weaker financial strength
compared with higher-rated peers.
State-run Caixa Geral de Depositos lost
just one notch to A1/Prime-1.

Telecom
Icap fortunes Italia: Job
hit by a drop cuts on ice
in volatility Icap boss Michael
Spencer

▲
TELECOMS
Picture: REUTERS
TELECOM Italia has suspended
planned job cuts under pressure from
ANALYST VIEWS: WHAT IS THE OUTLOOK FOR a government hoping to minimise
union conflict as Prime Minister
beginning of the year, credit markets
ICAP’S BUSINESS? Silvio Berlusconi pushes austerity
▲

FINANCIAL SERVICES Interviews by Victoria Bates

BY VICTORIA BATES
ICAP, the world’s largest inter-dealer
broker, saw its shares hammered by
have been quieter and spreads nar- measures for the flagging economy.
rower than last year,” it added. “Telecom Italia has agreed to with-
The dampener came as a blow to draw the layoff procedure. Now we
investors, who had been hoping for a VIVEK RAJA | PANMURE GORDON have a 15-day period of intense negoti-

investors yesterday as fears crys-
tallised over the impact of lower lev-
els of volatility on the group’s
business.
more bullish statement after having
been hit in the last financial year by
the double whammy of a profit warn-
ing and the closure of the group’s
“
ations,” Labour minister Maurizio
Sacconi said after a meeting with the
The earnings guidance was in line with expectations, but it is company as well as its unions yester-
Icap’s cautious tone which has spooked the market. For volumes to have day.
slowed ‘significantly’ across the business in June is worrying following

Icap said revenue over the first
quarter of the financial year rose
eight per cent compared to the first
three months last year, while profit
grew by five per cent.
But the earnings guidance, which
struggling cash equities business.
However, Spencer said the group
still expects to hit the current range
of analyst forecasts for its profit haul
in the year to March 2011, between
£336m and £360m.
”
Heavily indebted Telecom Italia
strong market activity in May, and highlights a lack of visibility and out- had announced plans to cut 3,700
look uncertainty. jobs by June 2011 and a total of 6,800
positions between 2010-2012 as part
of a turnaround plan.
NITIN ARORA | EXECUTION NOBLE The government decided to inter-

was in line with expectations, was off-
set by a note of caution from chief
executive Michael Spencer, who said
broking volumes “slowed significant-
ly in June as customers’ and end
Analysts said yesterday’s 4.6 per
cent share price plunge was mostly
down to a round of profit-taking after
a recent strong run for the stock,
which has gained almost half its
“
vene after unions held a strike last
week over the cuts.
The key driver for Icap’s business is volatility, which has been Telecom Italia chief executive
hit recently in all asset classes and is not likely to improve in the near Franco Bernabe said Sacconi had
future. However, Icap is still a solid business and should deliver in line promised to find the means to reduce

investors’ risk appetites reduced”.
Extreme volatility in May provided
a welcome boost to the company’s
voice broking revenues on the foreign
exchange and interest rate desks,
while the month also saw a continu-
”
value since its February low of 294p. with last year, especially given that the drag of the cash equities busi- the social impact of the cuts.
Unions have said Telecom Italia,
ANALYSIS l iCap ness has now been eliminated. which is controlled by a consortium
416.10
p 14 Jul headed by Spain’s Telefonica, was
440
dramatising the crisis to justify lay-
420 JAMES HAMILTON | NUMIS offs and should not axe jobs while

ing good run in the commodities and
emerging markets businesses.
However, this was offset by a turn-
around in June, which Icap said saw
“reduced revenues in almost all asset
“
400 paying dividends.
Italy’s official unemployment rate
380 We believe that earnings per share growth will be strong is less than the Eurozone average at
360
through next year, driven by strong growth in volumes from the prospect just under nine per cent but far fewer
of economic recovery and increased interest rates around the world. A people work in Italy as a proportion

”
340
classes other than commodities and higher interest rate environment will stimulate trade directly in interest of the working age population than
emerging markets”. 320 rates, bonds and FX, impacting most of Icap’s product lines. in France or Germany, putting a
“After a good performance at the 19 Apr 7 May 28 May 17 Jun 8 Jul strain on public finances.

BSkyB in talks to launch Arabic news Driver error may be behind

channel with private Abu Dhabi investor Toyota’s acceleration issues
competing with the likes of Al and we look forward to bringing a drivers were at fault in cases of sud-
▲

MEDIA
▲

BY HARRY BANKS
BRITISH pay-TV company BSkyB is in
talks with a private Abu Dhabi
investor to launch a round-the-clock
Arabic language news channel under
the Sky News brand.
The new channel, which could
launched within 24 months, would
be run as a 50-50 joint venture, pro-
viding coverage of news across the
Middle East and North Africa and
Jazeera, BBC Arabic and Al Arabiya.
English language Sky News is avail-
able to viewers around the world but
this would be the first wholly interna-
tional venture for BSkyB .
“The Middle East is undergoing
rapid economic and social develop-
ment and is becoming an increasing-
ly attractive region for media
investment,” head of Sky News, John
Ryley, said.
“Discussions are progressing well
new approach to Arabic-language
news.”
BSkyB did not name the potential
investor.
BSkyB is 39 per cent owned by
News Corp, and the two sides are in
talks after Rupert Murdoch’s compa-
ny proposed buying the rest of the
company it does not already own.
BSkyB’s independent directors said
they would support an offer of more
than 800p a share.
AUTOMOTIVE
TOYOTA said yesterday its investiga-
tion of nearly 2,000 cases of unintend-
ed acceleration had found no
problem with its electronic throttle
system, and that driver error was to
blame in some cases.
The world’s top automaker state-
ment follows reports that early
results of the US government’s analy-
sis of dozens of data recorders from
Toyota vehicles suggested that some
den acceleration.
Early results of the US Department
of Transportation’s tests indicate
some drivers who said their Toyotas
or Lexus cars surged out of control
might have pushed the accelerator
when they meant to brake.
The Department of Transportation
would not confirm the report. As
many as 89 crash deaths have been
reported since 2000 as possibly being
linked to unintended acceleration.
CITYA.M. 15 JULY 2010 Economic News 9

Why the Bank of England must hike rates now

The root cause of our inflation has
been the development of an excess
supply of money relative to the econo-
my’s demand to hold liquidity. An
attempt by consumers and companies
to eliminate this surplus has con-
tributed to the pick-up in nominal
spending; excess liquidity may also
GUEST COMMENT have made it easier for firms to pass on
cost increases.
SIMON WARD Most economists with monetarist
leanings have dismissed the possibility
demand: negative inflation-adjusted
deposit account rates have encouraged
investors to rebalance portfolios away
from money into assets offering high-
er yields and inflation protection.
To the extent that the possibility of a
decline in money demand is acknowl-
edged, the consensus is that this repre-
sents a one-off shift, implying no
lasting implications. Such a view, how-
ever, is at odds with experience in the
1970s, when a fall in the ratio of
broad money measure, M4 excluding
holdings of non-bank financial inter-
mediaries, rose at a nine per cent
annualised pace in the three months
to May. The consensus is that this sup-
ply pick-up will, again, prove tempo-
rary because bank lending to the
private sector remains weak. Money
and lending, however, can diverge sig-
nificantly. Eurozone worries, an
undervalued exchange rate and the
coalition’s action to tackle the deficit
relative to private sector lending – and
hence create a gap between these two
variables. Recent strong foreign buy-
ing of gilts and Treasury bills could be
an early indication of such an inflow.
An early rise in rates is warranted,
not to choke off the growth in the UK
money supply but to boost demand for
money to eliminate surplus liquidity.
Higher rates would increase the UK’s
attractions to foreign investors, with
capital inflows likely to put upward

B
ritain’s inflation has taken off
but the Bank of England
appears to be ignoring the influ-
ence of monetary trends. This
failure could be dangerous.
of such an imbalance because of the
slow pace of broad money supply
expansion in 2008-09. The surplus,
however, is the result not of an exces-
sive rise in supply but rather a fall in
money to national income was sus-
tained for several years as the authori-
ties, as now, maintained interest rates
well below the rate of price increases.
Meanwhile, the Bank’s favoured
may result in a sustained inflow of for-
eign capital into the UK. A combined
surplus on the current and non-bank
capital accounts of the balance of pay-
ments will expand the money supply
pressure on the exchange rate.
It’s time for the MPC to act to tackle
our inflation problem.
Simon Ward is chief economist at
Henderson Global Investors

Part-timers
push down
jobless total
Encouragingly, employment
▲

UK ECONOMY
BY JESSICA MEAD
FALLS in the two key measures of
unemployment provided a glimmer
of hope that the labour market is
starting to stabilise but economists
warned of impending public sector
job losses.
Figures from the Office for National
Statistics published yesterday showed
that the number of Britons claiming
jobless benefits fell again in June by
20,800. The more comprehensive
International Labour Organisation
survey also showed unemployment
falling by 34,000 in the three months
to May, taking the jobless rate down to
7.8 per cent from 7.9 per cent.
“For the first time in many months
we have the two key unemployment
indicators telling us the same thing:
that the labour market is improving.
However, a note of caution is neces-
sary – while the direction of the
changes may now be in synch, the
magnitudes are still very different,
with the claimant count painting a
far rosier picture,” said Hetal Mehta,
senior economic advisor to the Ernst
& Young ITEM Club.
jumped by 160,000 in the three
months to May, which was the largest
rise since August 2006.
However, the rise in employment
was driven by part-time and self-
employed workers. Part-timers rose by
148,000 over the quarterly rise to
7.82m, the highest level since records
began in 1992. The number of full-
time employees is now 18.2m. The
ONS said that a record 27 per cent of
the total workforce was now in part-
time employment, with the category
accounting for the vast majority of
the 160,000 rise in total employment –
the biggest quarterly jump since
August 2006.
Data out yesterday on pay growth
also showed that the high unemploy-
ment has been putting renewed
downward pressure on pay growth.
After a tentative pick-up at the turn of
the year, regular (excluding bonuses)
average earnings growth fell to 1.4 per
cent in May from 1.7 per cent, its slow-
est rate since last December. Private
sector pay growth was just 0.6 per
cent. Even taking bonuses into
account, overall pay growth was just
1.3 per cent.

Drop in US retail sales

fuelled by autos and gas
have much to spend in the first place,
▲

US ECONOMY
BY JESSICA MEAD
RETAIL sales in the world’s largest
economy fell by 0.5 per cent last
month compared to May, official data
showed yesterday. The drop in US
retail sales was driven by a 2.3 per cent
fall in auto sales and a two per cent
fall in gasoline station sales. Food
sales also dipped for the third time in
four months, down 0.5 per cent.
However, the fact that sales exclud-
ing autos and gasoline rose by just 0.1
per cent suggests that households
either saved the extra cash or did not
said Paul Dales, US economist at
Capital Economics. “Given that
employment, hours worked and
hourly earnings all fell in June, the lat-
ter appears more likely,” he added.
“Activity at the end of the quarter was
much weaker than at the start. It has
become much more likely that private
sector demand will not be able to off-
set the fading of the fiscal stimulus.”
Nick Beecroft, senior FX consultant
at Saxo Bank, said: “Today’s US eco-
nomic releases only served to under-
line the tepid, and probably stalling,
nature of the US recovery.”
 The Capitalist
10
A SUITABLY
SPIRITED
SENDOFF TO
SIR STUART
WE’LL begin by heading over to the Royal
Festival Hall for Marks and Sparks’ annu-
al general meeting, where the usual fun
and games were to be had.
Hundreds of ageing M&S veterans
queued up for the speeches, stage antics
and free food and drink, armed with
piercing questions for Sir Stuart Rose and
his successor, Dutchman Marc Bolland.
One, who pointed out that she was
dressed head to toe in M&S wares, com-
plained about having to buy gingerbread
men which had been “decapitated”. Later,
another questioned the quality of the
retailer’s socks, which have been unravel-
ling and slipping down all over the shop.
“Go shopping and if you can’t find any-
thing, come again with me next week,”
soothed Sir Stuart, who’s had experience
with such grievances in the past, Jeremy
Paxman’s pants and all.
The real corker of the meeting, howev-
er, was when the famous clothing rail
made its customary appearance, led on by
M&S model Twiggy. After gushing trib-
utes about Rose’s many attributes as a
company boss and gentleman, Twiggy set-
tled in to watch her hero perform his mar-
ket trader routine.
“If you’re not the biggest, we can make
you bigger,” roared Rose enthusiastically,
holding up the retailer’s new bra range,
which claims to make ladies look up to
two full cup sizes larger than God intend-
ed.
Replied our Twiggy, a twinkle in her
eye: “This man knows what he’s talking
about…”
SPORTING GREAT
Grumblings are still rumbling around in
the City over England’s dismal perform-
ance in the World Cup, with the
favourite refrain being that if a business
performed that badly at a crucial junc-
ture, heads would roll.
Lucky for team manager Fabio Capello,
then, that at least one City chap is willing
to stick up for the FA’s decision to stick
with him. Josh Lewsey, the former
England and Wasps rugby back who is
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
“The famous
clothing rail
was led on by
Twiggy, who
gushed about
Rose’s many
attributes as
a boss and a
gentleman”
Bigger is better when
it comes to Sir Stuart’s
clothing rail comedy
TROUBLE AND STRIFE
Red faces all round yesterday at Credit
routine Suisse, just a few short weeks after the
bank and a couple of its peers gave up the
Pictures: GETTY, ghost on getting the Pru’s rights issue
ACTION IMAGES, away.
Adrian Brooks More recently, Credit Suisse has been
advising Fairfield Energy on its planned
flotation, which – failing a small miracle –
looks set to be given the chop this morn-
ing. So it’s a good job senior adviser Robert
Mayhew is used to the City’s ups and
downs – he is the son of Cazenove veteran
David Mayhew, one of the central defen-
dants in the Guinness share trading scan-
dal of the late Eighties. After charges were
Josh Lewsey has some advice for the FA dropped against him, Mayhew Snr man-
aged to ascend to the very pinnacle of
now a senior consultant for PwC, has no the financial advisory world, so his
shortage of experience with tough sport- progeny shouldn’t let a piffling lit-
ing situations, but is convinced the prob- tle IPO headache stand in the way of
lems lie deeper than Capello. his ambition.
“It’s very easy to blame a specific indi-
vidual but that’s like shifting deck chairs
on the Titanic,” he told The Capitalist. “We FOOT SORE
haven’t won the World Cup since 1966
and the manager and the head of the FA
Cardew Group’s Jamie Milton
has been on the blower to tell
chop and change. It’s right that the FA did- me of a harebrained stunt
n’t succumb to a knee jerk reaction – he’s doing at the end of
you’ve got to look deeper than the per- the month. Milton, a
formance of the national team, both struc- former captain in the
turally and culturally.” Army before he joined
Sage stuff. In case the FA is wondering, the world of PR, plans
Lewsey’s advice is to invest in youth train- to walk 133 miles
ing (well, it’s certainly worked for between Winchester
Germany), look at how money at the top and Canterbury cathe-
level filters down and how the FA interacts drals to raise money for
with the Premiership on the issue of the Help for Heroes. Only, to make it
top stars. Sounds easy when you say it like more difficult, he’s doing the
that, doesn’t it? whole thing barefoot.
Whole Native Lobster & Chips
£24.50
With A Glass Of J&B NV Champagne
Subject to availability until 16th August
Celebrating Justerini & Brooks 250th Anniversary
Boisdale of Belgravia - Boisdale of Bishopsgate - The Lamb at Hindon
15 Eccleston Street, Swedeland Court,
London, SW1W 9LX 202 Bishopsgate
020 7730 6922 London, EC2M 4NR
020 7283 1763
www.boisdale.co.uk
CITYA.M. 15 JULY 2010
Jamie Milton is going shoeless for soldiers
“I would like to pay tribute to the
courage our soldiers demonstrate each
day of their lives and to help raise the
funds necessary to ensure that when they
come home, they are not forgotten by the
country they served,” says our man.
To help him along, go to www.justgiv-
ing.com/James-Milton.
FAST FOOD FIX
First a local curry house sustained Alistair
Darling and co through the night in the
middle of the financial crisis, when they
were dreaming up the multibillion pound
bank bailout, and now a pizza delivery boy
saves the day on an M&A deal.
Rivington Street Holdings directors, led
by chief executive and T1PS founder Tom
Winnifrith, were in the Isle of Man on
Tuesday evening to receive a document
finalising the group’s acquisition of the
financial markets division of Aim-listed
Corero. Only when the document in ques-
tion arrived, the gathered execs faced a
crisis when it transpired that a wit-
ness signature was required to sanc-
tion the deal. Luckily, the Domino’s
Pizza delivery scooter zoomed up
right on time for its driver to step
into the breach.
RACE DAY
Finally, good luck to all
those taking part in
today’s Standard
Chartered Great City
Race, who will be egged
on by the bank’s
European chief Richard
Holmes, ex-Olympian
Denise Lewis and Lord
Mayor Nick Anstee.
I’m told a maximum
field of 6,500 runners
signed up from almost
400 firms.
Hindon near Salisbury,
Wiltshire, SP3 6DP
01747 820 573
CITYA.M. 15 JULY 2010
ANALYSIS l ASOS’ first quarter sales
ASOS co-founder Nick
Robertson has made
£15m by selling a fifth of
his shares
Picture: REX
Asos sales up
as co-founder
makes £15m
▲
RETAIL
BY JOHN DUNNE
THE co-founder of ASOS has made
£15m by selling a fifth of his shares as
the online retailer posted a 54 per
cent jump in first-quarter sales yester-
day, fuelled by demand from abroad.
Nick Robertson, 40, who founded
Asos with business partner Quentin
Griffiths, sold 1,683,424 shares yester-
day at 890p each.
It his first major sell-off of shares
and the company said he was not
planning to take a step back from the
business.
The firm – which provides the lat-
est fashions at cheap prices – made
£61.7m of sales in the three months
to 30 June.
UK sales rose 32 per cent, while
international sales were up 111 per
cent to now account for 37 per cent of
total sales.
ASOS said its strong performance
was despite an extra week of sale
activity in the comparable period last
year, and that its gross profit margin
also rose.
Strong sales of maxi-dresses and
festival wear also helped to boost the
figures, in a series of sales rises for the
Wetherspoon’s Trading at Topps
brekkie boost starts to pick up
▲
LEISURE
JD WETHERSPOON returned to sales
growth in the fourth quarter as its
pubs opened two hours earlier for
breakfast, and as the warm summer
weather lured in more drinkers.
The company yesterday posted a
one per cent increase in fourth-quar-
ter sales at pubs which had been open
for more than a year, compared with
a 0.2 per cent decline in the nine
months to 25 April.
It opened for breakfast on 28 April,
offering cheap fried breakfasts and
coffee in a bid to compete against
McDonalds and coffee shop chain
Starbucks.
Consumer News 11
Thornton axes jobs
54% £61.7m
Rise in Total sales
sales
111%
value
£15m
as sales slide again
Increase in The amount made
would go at its head office over the
▲
international by Nick Robertson RETAIL
BY JOHN DUNNE next three months.
sales in share sell off The firm, based in Derbyshire,
CHOCOLATE retailer Thorntons said issued a profits warning in April and
a decline in sales had deepened yes- said that chief executive Mike Davies
terday as it announced cuts in head would be replaced. Thorntons said
office jobs. the company was now trading “in
Like-for-like sales in its 377 stores line with expectations”. Thorntons
fell 6.2 per cent in the 10 weeks to 26 Direct, the confectioner’s online
June, down from a 4.6 per cent fall in business, saw sales grow 17.1 per
the previous quarter. cent to £0.9m – largely thanks to cor-
Thorntons said about 35 jobs porate customer demand.
company, which targets style-con-
scious 16 to 34 year olds.
Robertson said: “It is too early in
the financial year to assume that
these levels of sales will continue for
the remaining three quarters; howev-
er we remain confident that this year
will be another year of excellent
progress.”
He added: “While many retailers
have been hit hard by the economic
downturn, ASOS has benefited from a
young core customer base with fewer
financial commitments and from the
migration of spending from the high
street to the internet.”
Arden analyst Nick Bubb said: “If
growth continues at this rate, we will
be upgrading.”
ANALYSIS l ASOS 929.50
950 p 14 Jul
900
800
700
600
500
19 Apr 7 May 28 May 17 Jun 8 Jul
CONSUMER
TOPPS Tiles yesterday said trading
picked up in June but not by enough
to salvage its quarterly results.
The firm, which sells wood and tile
flooring from 310 UK stores, said rev-
enues for the 13 weeks to 3 July fell
2.5 per cent compared with an 8.9 per
cent drop a year ago.
The company said: “Trading during
the remainder of the quarter has,
however, demonstrated an improving
trend with overall revenue across the
13 weeks.”
The added it had opened eight new
stores in the financial year while clos-
ing or relocating seven.
 12 News
Barratt hikes profit forecasts Minerva rejects calls for
▲
PROPERTY
BY RHIAN NICHOLSON
BARRATT Developments yesterday
said its full-year profits would come in
above expectations as it continues to
focus on maximising selling prices
while keeping a lid on costs.
The UK’s third largest housebuilder
has pencilled in an operating profit of
at least £85m with margins rising to
four per cent. The average selling price
rose by 18 per cent during the half year
and 11 per cent for the full-year to
around £174,000 mainly due to
changes in the mix of its properties.
Houses now represent 60 per cent of
iPhone recall
fears batter
Apple’s stock
▲
TECHNOLOGY
BY STEVE DINNEEN
APPLE shares recovered to chalk up a
small gain yesterday, a day after an
influential US watchdog criticised its
new iPhone 4 handset.
On Tuesday, investors had flocked
to sell their shares in the firm, tem-
porarily wiping £6.5bn off its market
value, amid fears Apple may have to
issue a recall of the product, which
has been plagued by complaints of
antenna problems.
A report by Consumer Reports is
the latest – and most high profile – to
highlight the design flaw.
The issue has overshadowed an oth-
erwise successful launch, with the
iPhone 4 shifting a record 1.7m units
in its first three days on sale.
The Consumer Reports investiga-
tion said the antenna problem is
enough to kill a call if a certain part
of the phone is touched.
It said: “When your finger or hand
touches a spot on the phone’s lower
left side ... the signal can significantly
degrade enough to cause you to lose
your connection altogether ... Due to
this problem, we can’t recommend
the iPhone 4 until Apple comes up
with a permanent – and free – fix.”
Pension trustees wait for court to
decide what happens if BT goes bust
▲
TELECOMS
BY STEVE DINNEEN
PENSION trustees at BT were last
night awaiting a High Court ruling
over how much of the telecom
giant’s liabilities would be guaran-
teed by the state if it were to collapse.
The former state telecoms monop-
oly was given a guarantee when it
was privatised in 1984 that the gov-
ernment would back its pension
scheme in the event that the group
became insolvent.
completions during the year com-
pared to 46 per cent the previous year.
However, it added that it has also seen
an improvement in underlying selling
prices. Total completions for the sec-
ond half stood at 6,324, giving total
completions for the year of 11,377 –
down from 13,202 a year ago.
However, like rivals Taylor Wimpey,
Persimmon and Bovis, the FTSE 250
company warned the outlook for the
UK market remains challenging “as a
result of continued constraints on the
availability of mortgage finance and
overall economic concerns”.
Barratt is targeting total comple-
tions for 2011 of between five per cent
It said the problem can be partially
solved by sticking non-conductive tape
over the problem area but this is
unlikely to appease style-conscious
Apple fans. Steve Jobs has already
attempted to play down the issue,
telling users to hold the phone in a dif-
ferent way or buy a £25 bumper from
the Apple store. The firm has also sug-
gested the problem may be a software
glitch that affects how many “bars” of
signal are displayed on the phone.
However, Consumer Reports’ findings
appear to scupper this theory.
Analysts are now speculating a full
recall of the phone could cost Apple
more than £1.5bn, as well as severely
denting the firm’s reputation.
The shares gained 0.9 per cent to
close at $252.61 yesterday.
ANALYSIS l Apple
252.61
280
$ 14 Jul
270
260
250
240
230
19 Apr 7 May 28 May 17 Jun 8 Jul
One area of contention is whether
members who joined after privatisa-
tion would be covered.
BT pension trustees reported last
month the deficit is now valued at
£7.6bn, a reduction of £1.4bn from
the previous year.
Earlier this year BT agreed with its
pension fund trustees the deficit
would be paid off over 17 years. It will
pay £525m for three years, rising to
£583m thereafter, with payments
increasing three per cent a year.
This will not be affected by the
and 10 per cent ahead of 2010 due to
an increase in the number of sales out-
lets rather than higher sales rates.
Net debt at the end of June stood at
£375m – below previous guidance.
Chief executive Mark Clare said: “In
the last six months we have driven a
significant improvement in operating
margin, delivered a profit for the
group, and reduced debt levels by
around £230m. This improved operat-
ing performance, combined with our
success in agreeing terms on higher
margin land means that the group is
well positioned to secure further mar-
gin growth in what continues to be a
challenging market.”
ANALYSIS l iPhone 4 flaw
● The iPhone antenna is compromised when the bottom left side of the
phone is touched by a user’s hand. This appears to be because it connects
the phone’s wifi and network antennas through the metal rim.
● It is much more likely to affect left-handed users, who naturally hold
the phone in a way that triggers the problem.
● Apple suggests buying a £25 “bumper” from its store to solve the issue.
court ruling, which BT says is simply
to clarify the mater for trustees.
Meanwhile, BT Global Services won
a $220m (£144m) extension to provide
technology services to consumer
products giant Unilever.
The original contract, announced
in November 2002 and worth around
€1bn (£835m) was the first global out-
sourcing contract undertaken by BT.
Jeff Kelly, chief executive of BT
Global Services, said: “We are delight-
ed that Unilever has chosen to extend
its contract with BT.”
chief executive to resign
▲
PROPERTY
UK DEVELOPER Minerva has rejected
proposals from its largest shareholder
KiFin to remove its chief executive
and make changes to its board, which
it saw as an attempt to gain control of
the company.
Minerva’s board has voted unani-
mously to reject the proposed
changes made by KiFin, an invest-
ment company launched by South
African entrepreneur Nathan Kirsh to
bid for Minerva, which included the
PROBLEM AREA
Q&A: BT IN COURT
Q. ISLAW?BT IN TROUBLE WITH THE
A. Technically BT is in the dock
but it insists its position is sim-
ply a technicality and it is standing
alongside the pension trustees in
seeking clarification from the gov-
ernment.
Q. WILL BT LOSE OUT OVER THE
RULING?
A. BT says its agreement to pay
back the deficit – currently
standing at £7.6bn – has already
been agreed and the ruling should
not have any immediate bearing on
the firm. It has agreed to pay back
£525m over the next two years, ris-
ing to £583m thereafter, with pay-
ments increasing three per cent a
year until the balance is cleared.
CITYA.M. 15 JULY 2010
removal of Salmaan Hasan as chief
executive and appointing two new
directors, the London office develop-
er said yesterday.
“The Board considers that these
proposals from KiFin represent a con-
tinuation of its attempts to gain con-
trol of the company without paying a
premium to shareholders for that
control,” Minerva said.
In January KiFin saw its 50p per
share offer lapse after it received just
0.08 per cent shareholder acceptanc-
es. Its shares closed 1.7 per cent down.
Commercial
property hit
by slump
▲
PROPERTY
BY HARRY BANKS
BRITISH commercial property val-
ues rose 0.5 per cent in June, as in
May, in what is a further sign that
this market’s 11-month rebound is
losing steam, data showed yesterday.
The Investment Property
Databank’s ( IPD ) monthly index had
registered a 0.5 per cent rise in May,
from a 0.8 per cent rise in April. UK
commercial property prices have
now shown positive gains for 11 con-
secutive months, after a two-year
downturn.
“UK commercial property capital
appreciation has eased to its slowest
quarterly growth since the rebound
manifested last August, at 1.9 per
cent over the second quarter,” the
IPD said. “Commercial property val-
ues are now back to December 2008
levels – with the re-pricing from the
first 18 months of the correction still
unreversed,” it added in a statement.
The benchmark IPD data, used as
the basis for UK’s property deriva-
tives market, also showed rents, for
office, retail and industrial proper-
ties, rose 0.6 per cent on average.
Phil Tily, the UK and Ireland man-
aging director at IPD , said after three
volatile years, the fundamentals driv-
ing the property market appeared to
be moderating. “Whether this proves
to be the calm after a very long storm
depends upon the course of the
domestic economy,” he said.
Q&A
Q. WHEN IS THE
RULING EXPECTED?
A. There was no sign
last night but it could be
announced any day this week.
Q. WHO WILL BE THE BIGGEST
WINNER?
A. If the ruling goes in favour of
the pension trustees, members
who signed up after the privatisa-
tion may have their pensions guar-
anteed.
Q. SOFOREVERYBODY IS HAPPY THEN,
NOW AT LEAST?
A. It appears so. BT also averted a
walkout this month when it
announced it has reached agree-
ment with its workers’ union on a
new pay package for employees.
CITYA.M. 15 JULY 2010
USA allows Glaxo to
keep selling Avandia
PHARMACEUTICALS
▲
BY MARION DAKERS
GLAXOSMITHKLINE (GSK) will be
allowed to continue selling diabetes
drug Avandia in America with addi-
tional health warnings, following a
vote by the US Food and Drug
Administration (FDA) last night.
The 33-member panel found there
was an increased concern about heart
attacks with Avandia versus other dia-
betes drugs, but stopped short of find-
ing a greater risk of death.
Only 12 members voted to recom-
mend that the FDA withdraw the pill.
There was one abstention.
Avandia was GSK’s second-biggest
drug by sales until 2007, when warn-
ings were placed on the packaging in
2007 saying some research linked the
drug to a higher heart attack risk.
It generated $663m (£434m) in US
sales last year for the UK-based drugs
and healthcare firm, just 1.5 per cent
of total revenue, but investors had
Dubai developer Nakheel to
repay its loans at new terms
PROPERTY
▲
BY HARRY BANKS
TROUBLED Dubai property devel-
oper Nakheel asked bank creditors
to accept repayment of $10.5bn
(£6.9bn) over five to seven years at a
meeting yesterday in one of the lav-
ish developments that brought it
low.
Detailed terms of the multi-bil-
lion dollar restructuring, including
the rates of interest and repayment
schedules for the syndicated and
bilateral loans, were presented to
bankers who were asked to
respond to the proposals by 31
August.
US CFTC eyes its role in
high-frequency trading
▲
FINANCIAL MARKETS
THE US futures regulator must
look carefully at new “risk con-
trols” to protect markets in an era
when trades are done 150 times
faster than the blink of an eye, the
head of a new technology panel for
the Commodity Futures Trading
Commission said yesterday.
The expanding use of algorithms
to rapidly create and execute
futures trades – combined with
new responsibility for the vast over-
the-counter swaps market – means
the CFTC needs to evolve,
Commissioner Scott O’Malia said.
“I recognise that just as trading
left the pit and migrated to the
computer screen, it is inevitable
feared costly lawsuits if a ban had
been imposed.
“Following today’s recommenda-
tions, we will, of course, continue to
work with the FDA in the best interest
of diabetes patients who face this
chronic and serious disease,” GSK’s
chief medical officer Dr Ellen
Strahlman said last night. “Patients
taking Avandia should speak with
their physician about their treatment
and any questions they may have
regarding the safety of the medicine.”
The firm said after the vote it
acknowledged “the efforts made by
the FDA to apply scientific rigour to
the debate and understanding of the
benefit-risk profile of Avandia,” and
said six clinical trials since 2007 had
shown no overall risk of suffering a
heart attack or stroke.
However, the panel heard evidence
from several research projects that
had found a link between the drug
and various life-threatening condi-
tions.
The details were not disclosed
publicly by Nakheel but it is under-
stood one rate proposed was four
per cent, with separate rates would
applying to separate loans running
over five to seven years.
A firm said the terms had unani-
mous approval by the three-bank
coordinating committee, “subject
to further internal approvals”, and
that Nakheel expects the restruc-
turing to be completed over the
coming months.
The developer, which over-
stretched itself building islands in
the shape of palms and other ambi-
tious real estate, is holding sepa-
rate restructuring talks from those
that technology will continue to
challenge our existing market
designs,” O’Malia said. “We must
adapt to a new regime of oversight
and surveillance, ensuring that the
mission and customers are protect-
ed.”
High-frequency trading came
under heightened scrutiny after the
6 May stock market “flash crash”
that drove the Dow Jones index
down some 700 points within min-
utes, even though traders have said
their technology was not to blame.
“Common sense tells us that
computer-generated trading – con-
trolled by algorithms that spitfire
trades in nanoseconds – con-
tributed to the free-fall,” said CFTC
Commissioner Bart Chilton.
News 13
TOP WORLDWIDE DRUG COMPANIES
Johnson & Johnson rank first out
of 40 in market capital
($166.86bn).
Its largest market is the USA.
GlaxoSmithKilne ranks fifth with
a market capital of $92.73bn. The
US market is Glaxo’s largest, mak-
Twenty members of the panel said ing up 45 per cent of it's revenues
Avandia could remain on the market, although the company is present
but votes were split over the extent of in nearly 70 countries. Its best-
the extra warnings needed before the
drug can be safely sold. selling drug is Advair.
The FDA will make the final deci-
sion in the coming months but usual-
ly follows the advice of its advisory Pfizer ranks second with a market
committees. capital of $119.3bn. Pfizer's
The announcement came after largest market is the USA. Its
European markets had closed, but
GSK shares rose in the USA following bestselling drug is Lipitor.
the vote, closing up 1.8 per cent.
ANALYSIS l GlaxoSmithKline Novartis ranks third with market
p
1,300 capital of $114.67bn. Its best best-
1,174.50 selling drug is Gleevac.
1,250 14 Jul
1,200
1,150
AstraZeneca's market capital is
$72.49bn. Its largest market is
1,100
the UK. Its bestselling drug is
1,050
19 Apr 28 May 18 Jun 8 Jul
Nexium.
10 May
| PROMOTION
put in place by its equally troubled
parent, state-controlled conglomer-
ate Dubai World.
Nakheel made a presentation to
some 20 creditor banks at the
Atlantis Hotel, a lavish pink palace
perched at the seaward tip of its
landmark Palm Jumeirah island
development.
Other Nakheel projects include a
set of man-made islands in the
shape of the world off the coast of
Dubai, which is home to the
world’s tallest building.
In recent years the company was
noted for its breakneck pace of
Further 10% OFF
development, which came to an
abrupt halt in 2008.
on top of current sale
NEWS | IN BRIEF
City AM has teamed up with Basically Black
London hoteliers report boom
Hotels in London have reported a 9.3 the online women’s retailer to offer readers an
per cent surge in revenue per avail-
able room during the first half of extra 10% off the current sale.
2010 to £102. Average room rates
were the key driver of growth, up 7
Basically Black offers black and white classic,
timeless styles for work, weekends and holidays.
per cent to £129, while occupancy
rose 2.1 per cent to 78.9 per cent, Basically Black is for professional women,
according to research by Deloitte.
run by professional women.
AgBank gets a fees bargain Simply select the items you wish to buy and
Agricultural Bank of China is expect-
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in fees to the firms handling its
$19.3bn initial public offering, the just before you enter your card details.
lowest underwriting payout by any of Offer ends 16th July 2010
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go to underwriters. AgBank publicly
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banks involved with its Shanghai list-
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per cent charge. AgBank shares will
start trading in Shanghai today.
 14 News
Class of 2010 will find rewarding City career
ture for unemployment, many will
struggle to find fulfilling work that
pays well. Yet those high achievers who
have blazed a trail during the graduate
recruitment rounds with the bulge
bracket banks can rest easy, knowing
they’re heading for a rewarding and
stimulating career in finance.
CITY COMMENT The good news is that even with
BEN GRIFFITHS continued worries about the econom-
ic outlook, banks are today loath to
neglect their graduate training
A
S the latest crop of graduates schemes. Vacancies do exist outside
takes the first tentative steps the graduate programmes that have
into the world of work this sum- filled their quotas for this year. It’s just
mer, thousands of college and that it takes more than a decent aca-
university-leavers who are desperate demic record to stand out these days
for a job will look towards the City and a bit of lateral thinking to find
with envy. Despite the improving pic- growth areas that would previously
Cable: Grants
aren’t needed
to secure cash
▲
POLITICS “We’re recovering from recession.
BY STEVE DINNEEN We plan on offering extremely com-
petitive tax cuts... We will have
BUSINESS secretary Vince Cable yes- among the lowest rates of corpora-
terday said the coalition is committed tion tax in the developed world.”
to attracting foreign investment to The UK has more than £1 trillion in
the UK but that the days of “irrespon- foreign investment, second only to
sible hand-outs” seen during the the US, which Cable estimates is sup-
Labour administration are over. porting around 94,000 jobs.
He told a UK Trade & Investment He said investment from the
meeting the government plans to Middle East and Japan has been “one
turn the UK into one of the most com- of the great success stories” of British
petitive business hubs in the devel- business, saying the links between
oped world. the Japanese and UK automotive
But he slammed the “bad policy” of industry should provide a template
the previous government, which he for future dealings.
said had left the coalition with a He also highlighted the impor-
“mess” to clean up. tance of the UK’s creative industries,
He also said foreign businesses are which he said are a major draw for
“not looking for hand-outs” but are foreign investors and create thou-
seeking a “stable business environ- sands of jobs.
ment”.
There was a huge drop in invest- Vince Cable said the
ment into the UK during the reces-
sion but Cable claims the UK is now
UK can be the most
“open for business” again. competitive business
He said: “We’re creating policy that hub in the world under
makes us very attractive to foreign the coalition.
investors.
CITY MOVES | WHO’S SWITCHING JOBS
Macquarie Capital Advisors
The corporate advisory group has appointed
Marc Middleton, left, as vice chairman of its
European advisory business and Ian
Brimecome as executive chairman of its
European financial institutions group (FIG).
Middleton formerly spent 24 years at NM
Rothschild, including eight as global head of the
telecoms group. Brimecome became a senior
adviser to Macquarie Capital on its acquisition
of Fox-Pitt Kelton.
Barclays Wealth ing director and head of ultra high net
The wealth management firm has worth (UHNW) for the UK and EMEA
appointed Stefanie Drews as a manag- region.
To appear in CITYMOVES please email your career
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
updates and pictures to citymoves@cityam.com
have been considered unattractive.
James Bennett of City finance job
specialists eFinancialCareers, says
banks seem to have learned their les-
sons from the 2001 to 2003 years when
they cut back on graduate intakes
with disastrous results. “That decision
gave them a huge problem in 2006/07
because there was a huge cohort miss-
ing,” Bennett says. “It is a cyclical busi-
ness and so they need to keep feeding
in graduates and turning them into
revenue generators four or five years
down the track.”
So what should jobseekers be con-
sidering while they mull over a City
career? And which jobs are currently
hot within financial services?
Firstly, forget the doom-mongering
BEST OF THE BROKERS
ANALYSIS l Pennon Group
600 p 571.50
14 Jul
580
560
540
520
500
480
28 Apr 19 May 9 Jun 29 Jun
PENNON
UBS has downgraded Pennon from “buy”
to “neutral” but maintains its 565p target
price. UBS said that it has seen infrastruc-
ture funds continue to raise cash and with
credit conditions improving, it sees all UK
water stocks as potential M&A targets.
However, apart from this it sees little fun-
damental upside in Pennon currently.
To appear in Best of the Brokers email your research to notes@cityam.com
Dana strikes black gold in the North Sea
▲
ENERGY
DANA Petroleum has struck oil at its
Blackbird oil field in the central North
Sea.
Aberdeen-based Dana said analysis
had indicated 75ft of good quality oil
bearing reservoir sands.
Blackbird is in the same licence area
as Ettrick, an oil field which has been
producing up to 22,000 barrels of oil
per day since August last year.
Edited by Victoria Bates
Drews joins from Morgan Stanley
Wealth Management, where she has
spent the past 13 years, most recently
as a managing director in the EMEA
region.
In her new role, she will be tasked
with building out the UHNW team,
which works across Barclays’ corpo-
rate, investment banking and wealth
management businesses.
Hawkpoint
Frank Jung has been hired as a manag-
ing director at the boutique advisory
firm to lead its German restructuring
and debt advisory practice.
Jung will be based in Hawkpoint’s
and banker bashing the wider media
has indulged in over the past year.
While the animosity levelled at
bankers during the credit crunch may
have been a deterrent to a minority of
graduates, recruiters report that hir-
ing is actually up this year as banks
gear up for the challenges ahead.
While we’re a long way from the
boom days of mergers and acquisi-
tions, hot areas such as interest rate
trading and foreign exchange are
important as there’s money to be
made from market volatility.
Similarly, risk and compliance are
key areas that should be considered by
graduates looking to make a name for
themselves. Anyone who can learn to
help a bank navigate through the jum-
ANALYSIS l ITV
70 p
52.40
14 Jul
65
60
55
50
45
28 Apr 19 May 8 Jun 29 Jun
ITV
Bank of America Merrill Lynch (BoAML)
has changed its rating on ITV from “neu-
tral” to “underperform”. BoAML said that it
cut the rating as operating momentum is
expected to stall. It said that risks of
investment-led downgrades and a con-
sumer slowdown will weigh on the shares.
BoAML gives ITV a target price of 54.50p.
Chief executive Tom Cross said: “In
the first half of 2010, Dana drilled 10
exploration wells making five oil and
gas discoveries. In the second half,
Dana’s intensive drilling programme
includes a further 10 exploration and
appraisal wells, targeting additional
oil and gas reserves in proven hydro-
carbon basin [and] Blackbird is the
first of these wells.”
Samples from the well are now in
the process of being fully analysed,
in association with
new Frankfurt office, which was opened
just last month. He joins from Jefferies,
where he headed its Anglo German
financial restructuring practice, and has
also worked in the Anglo German dis-
tressed debt investment team at
Goldman Sachs.
Partners Capital
The private investment office has pro-
moted Arjun Raghavan to be its sev-
enth partner.
Raghavan joined the firm in 2007 as
a principal and has been co-manager of
its master portfolio. He also sits on the
international investment committee.
Prior to joining the firm, he was a
CITYA.M. 15 JULY 2010
ble of new rules and regulations such
as Basel III will be in demand. Middle
and back office roles also remain
important. These may not be the sexi-
est areas of the banking and finance
workplace, but they are nevertheless
crucial to institutions’ success.
Secondly, now is a fascinating time
to go into the City with so much going
on. Experience gained in times of
change is invaluable, says Bennett,
making workers even more attractive
for future employers.
For the Class of 2010 – provided you
have the right drive and qualifications
and are prepared to think laterally –
there has never been a better time to
launch a successful career in the City.
ben.griffiths@cityam.com
ANALYSIS l ING
7.50
€
7.02
14 Jul
7
6.50
6
5.50
26 Apr 17 May 7 Jun 28 Jun
ING
Citigroup rates ING as “hold” and says that
it sees fair value in the bank. Citi said ING
is a much loved stock, with 25 buys and
only 11 holds and two sells. ING’s loan loss
should provide further uplift for earnings,
according to Citi, but warns that its target
of 13 to 15 per cent return on equity looks
optimistic.
after which time the well will be com-
pleted and flow tested. It will then be
suspended for future use as an oil pro-
ducer, Dana added.
The FTSE 250 listed company, which
earlier this month confirmed it had
received a very preliminary approach
from a potential bidder, intends to start
drilling its two largest 2010 targets later
this year. First up will be Anna Marie in
the Faroes in July, followed by
Cormoran in Mauritania in September.
senior fund analyst and director at
equities hedge fund Quantiva Capital
and a senior manager at Accenture
specialising in corporate strategy.
DTZ
The real estate adviser has appointed
Fergus Hicks as an associate director in
its global forecasting and strategy
research team.
Hicks was previously at Capital
Economics, where he was a property
economist specialising in European
commercial property markets. He has
also held the position of head of fore-
casting and economics for the EMEA
region at Jones Lang LaSalle.
+44 (0)20 7557 7245
morganmckinley.com
 Markets&Investment
15

LONDON’S TOP 250 Trade these shares from £1.50 with Interactive Investor - www.iii.co.uk
Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low Company Name Closing Price Price Change 52wk High 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)
3i . . . . . . . . . . . . . . . . . . . . . . . .282.10* –2.90 314.80 223.50 COLT Group . . . . . . . . . . . . . . . .130.90 +3.90 144.20 106.75 ITV . . . . . . . . . . . . . . . . . . . . . . . .52.40 –2.10 71.75 32.75 Schroders . . . . . . . . . . . . . . . . .1233.00 –15.00 1450.00 797.50
3i Infrastructure . . . . . . . . . . . . . 111.80 –1.40 115.00 89.35 Compass . . . . . . . . . . . . . . . . . .556.50* +4.00 574.50 307.75 Jardine Lloyd Thompson. . . . . . .564.50 +2.50 604.50 409.75 Schroders N/V. . . . . . . . . . . . . .1037.00 –15.00 1185.00 678.50
A.B. Foods . . . . . . . . . . . . . . . .1049.00 +14.00 1049.00 758.50 Cookson . . . . . . . . . . . . . . . . . . .432.30 –4.00 616.00 236.25 Johnson Matthey . . . . . . . . . . .1627.00* +11.00 1814.00 1140.00 Scot. & Sthrn Energy. . . . . . . . . 1198.00 +3.00 1206.00 357.50
Aberdeen Asset Man . . . . . . . . . .130.10 –0.80 155.60 111.00 Croda Intl . . . . . . . . . . . . . . . . . 1116.00 +7.00 1131.00 536.00 Kazakhmys . . . . . . . . . . . . . . . .1071.00 –8.00 1634.00 603.50 Scottish Mortgage. . . . . . . . . . . .590.50 +1.00 623.50 381.00
Admiral. . . . . . . . . . . . . . . . . . .1432.00 –45.00 1483.00 885.50 CSR . . . . . . . . . . . . . . . . . . . . . .398.10 +6.50 524.00 338.75 Kesa Electricals . . . . . . . . . . . . .125.80 –1.60 162.00 98.45 SEGRO . . . . . . . . . . . . . . . . . . . .275.60 +0.10 403.10 244.00
Aegis . . . . . . . . . . . . . . . . . . . . .109.10 –0.50 137.30 81.50 Daily Mail ‘A’ . . . . . . . . . . . . . . . .469.60 –1.10 539.00 290.00 .LQJÀVKHU . . . . . . . . . . . . . . . . . .221.80 –0.50 255.00 191.90
Afren . . . . . . . . . . . . . . . . . . . . . .84.45 –2.90 111.00 51.75 Dana Petroleum . . . . . . . . . . . .1422.00 +8.00 1549.00 968.50 Ladbrokes . . . . . . . . . . . . . . . . .139.70 –2.40 174.29 114.60 Serco . . . . . . . . . . . . . . . . . . . . .579.00 +5.50 656.50 394.30
African Barr Gold . . . . . . . . . . . .605.00 +2.00 685.00 520.50 Davis Service . . . . . . . . . . . . . . .374.90 –1.40 442.30 317.25 Lancashire Hldgs . . . . . . . . . . . .521.00 –6.00 540.00 416.70 Severn Trent . . . . . . . . . . . . . . .1269.00* –23.00 1310.00 921.00
Aggreko . . . . . . . . . . . . . . . . . .1610.00 –27.00 1639.00 504.00 De La Rue . . . . . . . . . . . . . . . . . .939.00* +4.00 1021.00 808.50 Land Securities . . . . . . . . . . . . . .584.50* –10.50 743.50 435.50 Shaftesbury . . . . . . . . . . . . . . . .389.30 +1.30 426.50 292.25
Alliance Trust . . . . . . . . . . . . . . .321.20* –2.10 352.70 263.50 Debenhams . . . . . . . . . . . . . . . . .60.00 –0.90 91.95 51.95 Legal & General . . . . . . . . . . . . . .87.35 –0.10 94.40 52.96 Shire. . . . . . . . . . . . . . . . . . . . .1467.00 +4.00 1526.00 818.00
AMEC . . . . . . . . . . . . . . . . . . . . .873.00 –11.00 891.00 625.00 Derwent London . . . . . . . . . . . .1319.00 –13.00 1490.00 874.50 Lloyds Banking Gp . . . . . . . . . . . .63.00 –0.89 75.58 42.87 SIG . . . . . . . . . . . . . . . . . . . . . . .103.20 –3.10 146.60 90.25
Amlin . . . . . . . . . . . . . . . . . . . . .421.20 +2.80 428.50 304.75 Dexion Absolute . . . . . . . . . . . . .138.00 –1.00 148.00 117.00 Logica . . . . . . . . . . . . . . . . . . . . 112.10 +0.50 149.10 77.00 Smith & Nephew . . . . . . . . . . . . .614.50 +5.00 700.50 436.00
Anglo American . . . . . . . . . . . .2416.50 +2.00 3015.50 1712.00 Diageo . . . . . . . . . . . . . . . . . . . 1118.00 +7.00 1176.00 861.00 London Stk Exchange . . . . . . . . .626.50 +22.00 949.50 540.50 Smith(Ds) . . . . . . . . . . . . . . . . . .140.00 +3.00 147.00 62.75
Antofagasta . . . . . . . . . . . . . . . .913.00 –19.50 1100.00 593.50 Dimension Data . . . . . . . . . . . . .101.60 –0.40 105.00 55.00 Lonmin . . . . . . . . . . . . . . . . . . .1466.00 –13.00 2198.00 1008.00 Smiths . . . . . . . . . . . . . . . . . . . 1114.00 –8.00 1186.00 688.00
Aquarius Platinum . . . . . . . . . . .312.10 –0.90 490.00 186.00 Domino’s Pizza . . . . . . . . . . . . . .412.80 +3.80 415.00 208.00 Man . . . . . . . . . . . . . . . . . . . . . .219.10* –1.90 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .418.90 –2.90 444.60 380.60
ARM Holdings . . . . . . . . . . . . . . .318.50 +9.60 362.40 120.50 Drax . . . . . . . . . . . . . . . . . . . . . .380.10 –6.80 496.50 321.50 Marks & Spencer. . . . . . . . . . . . .349.10* –4.50 412.70 317.75 Spectris . . . . . . . . . . . . . . . . . . .850.50 +14.50 928.00 512.50
Arriva . . . . . . . . . . . . . . . . . . . . .768.00 — 782.50 392.75 DSG Intl . . . . . . . . . . . . . . . . . . . .27.81 –0.15 39.75 20.25 Meggitt . . . . . . . . . . . . . . . . . . . . 311.60 –6.80 331.00 158.25 Spirax-Sarco Eng . . . . . . . . . . .1566.00 –1.00 1591.00 829.50
Ashmore . . . . . . . . . . . . . . . . . . .273.90 +10.30 311.20 192.00 Dunelm . . . . . . . . . . . . . . . . . . . .385.90 +6.00 438.40 230.25 Melrose . . . . . . . . . . . . . . . . . . .229.10 –0.70 251.50 95.50
Astrazeneca . . . . . . . . . . . . . . .3271.00 +1.00 3275.00 2657.50 Easyjet . . . . . . . . . . . . . . . . . . . .422.50 –4.40 499.90 271.00 Mercantile IT . . . . . . . . . . . . . . . .905.00* +8.00 1002.00 746.00 Spirent Comms . . . . . . . . . . . . . .120.00 +1.30 127.80 56.25
Atkins(Ws) . . . . . . . . . . . . . . . . .720.50 +12.50 747.00 532.50 Edinburgh Inv Tst . . . . . . . . . . . .399.00* –2.90 412.40 307.75 Michael Page Intl. . . . . . . . . . . . .400.70 +0.40 461.50 240.00 Sports Direct Intl . . . . . . . . . . . . . 112.00 –1.90 134.00 76.25
Autonomy Corp . . . . . . . . . . . .1912.00 –3.00 2012.00 1121.00 Electrocomponents . . . . . . . . . . .236.70* +5.70 245.00 137.25 Micro Focus . . . . . . . . . . . . . . . .452.40 +8.10 550.00 300.90 SSL Intl . . . . . . . . . . . . . . . . . . . .890.00 +15.00 893.50 522.50
Aveva . . . . . . . . . . . . . . . . . . . .1288.00* +6.00 1305.00 692.00 EnQuest . . . . . . . . . . . . . . . . . . .102.50 –2.00 112.70 87.35 Millen & Copthorne . . . . . . . . . . .445.00 +9.90 496.30 237.75 St James’s Place . . . . . . . . . . . . .239.50 +1.70 296.90 172.25
Aviva . . . . . . . . . . . . . . . . . . . . .355.90 –0.10 474.00 290.20 Essar Energy . . . . . . . . . . . . . . .429.00 –6.20 475.90 358.50 Misys . . . . . . . . . . . . . . . . . . . . .256.80 +2.50 281.70 168.75 Stagecoach. . . . . . . . . . . . . . . . .183.40 +0.50 204.90 126.20
Babcock International . . . . . . . . .629.50 –5.50 660.50 458.50 Eurasian Nat Res . . . . . . . . . . . .873.00 –10.50 1276.00 689.50 Mitchells & Butlers . . . . . . . . . . .309.40 +1.70 343.90 228.30 Standard Chartered . . . . . . . . . .1774.00 +8.50 1847.00 1165.00
BAE Systems . . . . . . . . . . . . . . .318.90 –9.60 389.90 294.20 Euromoney Inst Inv . . . . . . . . . . .603.00* –10.00 630.00 218.25 MITIE . . . . . . . . . . . . . . . . . . . . .215.00* +0.10 281.70 198.70 Standard Life . . . . . . . . . . . . . . .193.60 — 237.00 170.00
Balfour Beatty . . . . . . . . . . . . . . .252.30 –0.90 328.85 228.60 Experian . . . . . . . . . . . . . . . . . . .633.50* +1.50 664.50 442.75 Mondi . . . . . . . . . . . . . . . . . . . . .407.90 –4.00 488.00 193.50 SuperGrp . . . . . . . . . . . . . . . . . .800.00 — 838.00 499.00
Barclays . . . . . . . . . . . . . . . . . . .313.55 +0.95 394.25 253.40 F&C Comm Prop . . . . . . . . . . . . . .93.50 –1.00 96.80 73.50 Monks Inv Tst . . . . . . . . . . . . . . .288.50* –3.00 321.20 227.00 TalkTalk . . . . . . . . . . . . . . . . . . . 119.70 –0.60 147.10 106.60
Barratt Development . . . . . . . . . .104.30 –0.70 193.31 89.10 Ferrexpo . . . . . . . . . . . . . . . . . . .272.20 –4.50 396.20 116.75 Morrison Wm . . . . . . . . . . . . . . .284.30 –0.80 306.30 244.75 Talvivaara Mining . . . . . . . . . . . .402.10 +0.60 501.50 333.00
BBA Aviation . . . . . . . . . . . . . . .197.00 –1.10 220.00 116.50 FirstGroup . . . . . . . . . . . . . . . . .383.50 –15.80 448.80 322.75 Murray Intl Tst . . . . . . . . . . . . . . .844.00 –12.00 893.50 603.50 Tate & Lyle . . . . . . . . . . . . . . . . .470.50* –1.50 509.00 294.50
Beazley. . . . . . . . . . . . . . . . . . . .124.10 –0.90 125.80 95.25 Foreign & Col Inv Tst. . . . . . . . . .274.20 –0.30 297.20 212.25 National Express. . . . . . . . . . . . .241.00 +0.80 256.80 147.42 Taylor Wimpey . . . . . . . . . . . . . . .27.57 +0.21 54.90 24.29
Bellway. . . . . . . . . . . . . . . . . . . .600.50 –22.50 927.50 580.50 Fresnillo . . . . . . . . . . . . . . . . . . 1113.00 +16.00 1124.00 474.75 National Grid . . . . . . . . . . . . . . .497.10* –4.90 607.65 474.80
Berkeley . . . . . . . . . . . . . . . . . . .822.00 –5.00 989.50 735.00 G4S . . . . . . . . . . . . . . . . . . . . . .272.10 –0.30 285.70 208.50 Next . . . . . . . . . . . . . . . . . . . . .2105.00 +2.00 2360.00 1580.00 Telecity . . . . . . . . . . . . . . . . . . . .395.90 +4.40 455.00 300.00
BG . . . . . . . . . . . . . . . . . . . . . .1082.00 –12.50 1248.00 966.90 Genesis Emerging Mkts Fd . . . . .464.00 –3.00 484.00 370.00 Northumbrian Water . . . . . . . . . .325.60 –3.30 328.90 219.90 Templeton Emrg Mkts . . . . . . . . .548.00* –2.50 598.00 356.25
BHP Billiton . . . . . . . . . . . . . . .1846.00 –10.00 2346.00 1361.50 GKN . . . . . . . . . . . . . . . . . . . . . .130.60 –2.20 155.00 72.75 Old Mutual . . . . . . . . . . . . . . . . . 115.60 +0.10 127.20 79.24 Tesco . . . . . . . . . . . . . . . . . . . . .403.75 –0.50 454.90 356.50
BlackRock Mining . . . . . . . . . . . .555.00 –7.00 654.50 359.50 GlaxoSmithKline . . . . . . . . . . . . 1181.50 +5.00 1347.00 1088.00 Partygaming . . . . . . . . . . . . . . . .241.30 +1.30 339.70 205.80 Thomas Cook . . . . . . . . . . . . . . .199.90 +1.90 277.20 172.30
Booker . . . . . . . . . . . . . . . . . . . . .42.28 +0.11 49.50 33.00 Great Portland Estates . . . . . . . .303.00 –4.00 332.10 215.00 Pearson . . . . . . . . . . . . . . . . . . .943.50 +3.00 1069.00 593.50 Tomkins . . . . . . . . . . . . . . . . . . .235.80 +0.30 261.10 150.25
BP . . . . . . . . . . . . . . . . . . . . . . .401.00 –9.35 658.20 296.00 Greene King . . . . . . . . . . . . . . . .451.50 +3.50 504.00 372.50 Pennon . . . . . . . . . . . . . . . . . . . .571.50 –11.00 584.00 434.40 Travis Perkins . . . . . . . . . . . . . . .815.00 –8.50 915.00 572.00
Brit Insurance . . . . . . . . . . . . . . .906.00* +3.50 975.00 709.00 Halfords . . . . . . . . . . . . . . . . . . .525.00* +5.00 562.50 316.50 Persimmon . . . . . . . . . . . . . . . . .390.00 –8.80 534.50 340.20 TUI Travel . . . . . . . . . . . . . . . . . .228.50 –1.50 313.90 202.30
British Airways . . . . . . . . . . . . . .207.90 +0.90 255.80 126.10 Halma . . . . . . . . . . . . . . . . . . . . .288.00 –3.00 298.70 184.00 Petrofac . . . . . . . . . . . . . . . . . .1273.00 –27.00 1308.00 665.00 Tullett Prebon . . . . . . . . . . . . . . .340.10 –5.10 436.20 261.20
British Amer. Tob . . . . . . . . . . .2266.50 –10.50 2335.50 1695.00 Hammerson . . . . . . . . . . . . . . . .366.70 –1.40 460.30 288.50 Petropavlovsk . . . . . . . . . . . . . .1207.00 –18.00 1370.00 551.00 Tullow Oil . . . . . . . . . . . . . . . . . 1135.00 –15.00 1375.00 873.50
British Empire Tst . . . . . . . . . . . .426.80 –4.10 467.90 338.50 Hargreaves Lansdown . . . . . . . .339.00 –1.90 387.00 202.00 Premier Farnell . . . . . . . . . . . . . .247.40 +4.70 252.60 122.25 UK Commercial Prop. . . . . . . . . . .79.40 –1.10 84.90 62.25
British Land . . . . . . . . . . . . . . . .450.60* –2.10 532.00 370.50 Hays . . . . . . . . . . . . . . . . . . . . . . .96.05 –1.20 119.00 82.25 Premier Oil . . . . . . . . . . . . . . . .1462.00 +13.00 1477.00 984.00 Ultra Electronics . . . . . . . . . . . .1578.00 +8.00 1678.00 1094.00
Britvic. . . . . . . . . . . . . . . . . . . . .512.00 +12.70 514.00 300.00 Henderson . . . . . . . . . . . . . . . . .126.70 –0.10 157.80 88.25 Provident Financial . . . . . . . . . . .870.50 –3.00 986.00 769.00 Unilever . . . . . . . . . . . . . . . . . .1903.00 +5.00 2024.00 1439.00
Brown(N.) . . . . . . . . . . . . . . . . . .244.00* –8.10 284.30 204.80 Heritage Oil. . . . . . . . . . . . . . . . .433.30 –8.60 587.00 368.70 Prudential . . . . . . . . . . . . . . . . . .544.00 +5.00 665.00 361.25
BSkyB . . . . . . . . . . . . . . . . . . . .700.00 +5.00 732.00 478.00 Hikma Pharma . . . . . . . . . . . . . .723.00 +2.50 730.00 430.00 PZ Cussons . . . . . . . . . . . . . . . .341.80 –2.30 356.80 202.00 United Utilities . . . . . . . . . . . . . .553.50* –6.50 575.00 429.00
BT . . . . . . . . . . . . . . . . . . . . . . .142.30 –1.10 151.00 103.00 Hiscox . . . . . . . . . . . . . . . . . . . .352.00 +0.50 369.30 290.00 Qinetiq . . . . . . . . . . . . . . . . . . . .128.40 –0.80 179.10 113.90 Utd Business Media . . . . . . . . . .536.00 +6.50 579.50 366.00
Bunzl . . . . . . . . . . . . . . . . . . . . .714.00 +6.00 784.50 510.00 Hochschild Mining . . . . . . . . . . .305.80 –6.40 370.60 220.00 Randgold Resources. . . . . . . . .6225.00 –20.00 6600.00 3351.00 Vedanta Resources . . . . . . . . . .2277.00* –40.00 2967.00 1344.00
Burberry . . . . . . . . . . . . . . . . . . .794.00* –24.50 823.50 414.50 Home Retail . . . . . . . . . . . . . . . .233.80* +0.60 336.50 208.50 Reckitt Benckiser . . . . . . . . . . .3265.00 +8.00 3667.00 2686.00 Victrex . . . . . . . . . . . . . . . . . . . 1166.00 –1.00 1193.00 573.50
Cable & Wire Comms . . . . . . . . . .58.65* –1.40 150.00 53.00 Homeserve . . . . . . . . . . . . . . . .2128.00* –8.00 2190.00 1336.00 Reed Elsevier . . . . . . . . . . . . . . .526.50 –0.50 548.00 403.75 Vodafone . . . . . . . . . . . . . . . . . .146.10* — 153.80 111.90
Cable & Wire Wwide . . . . . . . . . . .87.45* –2.55 94.80 68.60 HSBC Hldgs . . . . . . . . . . . . . . . .639.70 –4.70 766.80 501.90 Regus . . . . . . . . . . . . . . . . . . . . . .73.85 –0.55 125.50 63.25 Weir . . . . . . . . . . . . . . . . . . . . .1205.00 +7.00 1229.00 456.25
Cairn Energy. . . . . . . . . . . . . . . .454.00 –16.30 479.20 306.80 Hunting . . . . . . . . . . . . . . . . . . .502.00 –1.50 659.50 391.00 Rentokil Initial . . . . . . . . . . . . . . . 113.70 –0.30 140.20 83.50 WH Smith . . . . . . . . . . . . . . . . . .423.00 +5.80 551.00 396.00
Caledonia Invs . . . . . . . . . . . . .1598.00 –13.00 1759.00 1496.00 ICAP . . . . . . . . . . . . . . . . . . . . . .416.10 –20.10 478.30 291.70 Resolution . . . . . . . . . . . . . . . . . .70.15 –0.05 99.15 58.45 Whitbread . . . . . . . . . . . . . . . . .1464.00* +13.00 1645.00 800.00
Capita . . . . . . . . . . . . . . . . . . . . .767.50 +7.00 829.50 643.50 IG . . . . . . . . . . . . . . . . . . . . . . . .469.30 –11.00 484.50 262.25 Rexam . . . . . . . . . . . . . . . . . . . .320.80 –1.80 331.20 222.50 William Hill . . . . . . . . . . . . . . . . .182.40 –1.90 217.80 160.50
Capital & Counties . . . . . . . . . . .107.90 –0.60 125.40 99.60 Imagination Tech Gp . . . . . . . . . .328.80 +9.20 334.60 138.25 Rightmove . . . . . . . . . . . . . . . . .626.00 — 729.00 343.00 Witan Inv Tst . . . . . . . . . . . . . . . .442.50 +0.40 487.00 336.50
Capital Shopping Centres . . . . . .322.80 –5.30 580.00 300.10 IMI . . . . . . . . . . . . . . . . . . . . . . .730.00 –5.00 756.50 280.50 Rio Tinto . . . . . . . . . . . . . . . . . .3134.50 –0.50 4104.00 1960.00 Wolseley . . . . . . . . . . . . . . . . . .1425.00 –27.00 1742.00 1026.00
Carillion . . . . . . . . . . . . . . . . . . .325.30 –1.00 361.90 246.25 Imperial Tobacco. . . . . . . . . . . .1937.00 — 2159.00 1590.00 RIT Capital Partners . . . . . . . . . 1193.00 –1.00 1215.00 904.00
Carnival . . . . . . . . . . . . . . . . . .2254.00 –30.00 2937.00 1598.00 Inchcape. . . . . . . . . . . . . . . . . . .288.10 –1.00 347.00 235.00 Rolls Royce . . . . . . . . . . . . . . . .590.00 –10.00 631.50 354.75 Wood Group (John). . . . . . . . . . .351.50 –2.70 411.70 244.00
Catlin . . . . . . . . . . . . . . . . . . . . .384.80 +4.20 385.80 294.00 Informa . . . . . . . . . . . . . . . . . . . .372.10 +6.00 439.40 221.25 Rotork . . . . . . . . . . . . . . . . . . .1396.00* –11.00 1482.00 792.50 WPP . . . . . . . . . . . . . . . . . . . . . .660.50 –2.00 744.00 388.00
Centamin Egypt . . . . . . . . . . . . .158.70 –2.10 174.75 80.00 Inmarsat . . . . . . . . . . . . . . . . . . .740.00 –6.50 831.00 491.00 Royal Bank Of Scot . . . . . . . . . . . .46.20 –0.20 58.95 28.25 Xstrata . . . . . . . . . . . . . . . . . . . .942.50 –12.50 1344.50 593.00
Centrica . . . . . . . . . . . . . . . . . . .313.10 +0.30 320.00 215.50 Intercontl Hotels . . . . . . . . . . . . 1160.00 +5.00 1244.00 604.00 Royal Dutch Shell A . . . . . . . . .1821.50 +13.00 2068.50 1447.00 Yell Group. . . . . . . . . . . . . . . . . . .26.92 +0.28 86.00 21.50
Charter Intl . . . . . . . . . . . . . . . . .700.50 +3.00 855.50 438.50 Intermediate Capital . . . . . . . . . .259.20 –13.80 332.00 170.25 Royal Dutch Shell B . . . . . . . . .1746.50 +15.00 1997.50 1450.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chemring . . . . . . . . . . . . . . . . .2998.00 –33.00 3711.00 1993.00 Intertek . . . . . . . . . . . . . . . . . . .1626.00 –14.00 1648.00 1024.00 RSA Insurance . . . . . . . . . . . . . .124.00 –1.60 142.00 114.10
Chloride Group . . . . . . . . . . . . . .371.60* +0.40 390.50 130.75 Intl Power . . . . . . . . . . . . . . . . . .321.40 –0.50 354.00 237.25 SABMiller . . . . . . . . . . . . . . . . .1950.00 –9.00 2090.00 1244.00

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Close Bros . . . . . . . . . . . . . . . . .703.00 –6.00 806.50 643.50 Invensys . . . . . . . . . . . . . . . . . . .266.20* –1.60 350.30 223.25 Sage . . . . . . . . . . . . . . . . . . . . . .243.00 +2.00 260.50 175.50
Cobham . . . . . . . . . . . . . . . . . . .235.10 –1.50 278.60 173.20 Investec . . . . . . . . . . . . . . . . . . .481.20 –5.00 565.00 347.00 Sainsbury(J) . . . . . . . . . . . . . . . .348.00* –1.60 373.00 307.60 www.interactivedata.com

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London ends its six-day winning streak Wall St falls after gloomy
due to weaker banks and mining firms Fed cuts growth forecast
than 9.5 percent since the index hit quarter production update. spending. Shares of Intel rose 1.7 per-

THELONDON its 2010 low 1 July.

“Investors paused for breath today
after the recent recovery, with miners
But precious metals miner
Fresnillo managed to buck the sector
trend, adding 1.5 per cent after its
THENEW YORK cent to $21.36, helping keep the Dow
and Nasdaq slightly higher.
Minutes of the Fed’s June meeting
REPORT especially impacted by some caution
ahead of the next batch of Chinese
economic data,” said Mic Mills, head
strong second-quarter production
report.
Staying with commodities, oils
REPORT showed officials are more concerned
with the pace of economic recovery.
That added to jitters stoked by a weak

B
RITAIN’S leading share index of electronic trading at ETX Capital. were weaker along with the price of report on June retail sales.

U
fell back yesterday, snapping a Miners fell back on worries over the crude , with BG Group down 1.1 per S stocks broke a six-day win- The Dow Jones industrial average
six session winning streak, sustainability of growth in China, the cent, while oil explorer Cairn Energy ning streak yesterday, with the edged up 3.70 points, or 0.04 per cent,
weighed down by weaker world’s largest consumer of metals, fell 3.5 per cent. S&P 500 ending a hair lower to end at 10,366.72. The Standard &
banks, on fresh stress test concerns, with Chinese industrial output data, BP was a big drag on the blue chips, after the Federal Reserve sug- Poor’s 500 Index fell just 0.17 of a
and by commodities, on caution due out on Thursday. shedding 2.3 per cent, having jumped gested additional measures may be point, or 0.02 per cent, to 1,095.17. The
ahead of Chinese data. Antofagasta was the worst per- 12.5 per cent over the past two ses- needed to combat a weakening econo- Nasdaq Composite Index rose 7.81
At the close, the FTSE 100 was forming blue chip miner, down 2.1 sions. The oil major fell as it delayed a my. points, or 0.35 per cent, to close at
down 17.50 points, or 0.3 per cent at per cent, while Rio Tinto shed 0.1 per critical pressure test that will deter- Optimism over the start of earn- 2,249.84. Earlier, the S&P 500 touched
5,253.52, slipping back after having cent after it flagged concerns over a mine if it can close a cap at its rup- ings season limited declines after an intraday high at 1,099.08 and the
hit its highest close in over two weeks possible double-dip recession and tured Macondo well that has leaked Intel reported better-than-expected Nasdaq was up as much as 0.8 per
on Tuesday and after adding more slower Chinese growth in a second oil into the Gulf of Mexico for weeks. results on signs of renewed corporate cent at a session high of 2,260.33.
 16 Investment | Listed Products CITYA.M. 15 JULY 2010

Our nation of
shoppers is not
about to quit
the habit yet
Consumption fears ily indebted, a VAT hike to 20 per cent is on
the way and the government is planning to
are already priced in, slay hundreds of thousands of public sector
jobs in the next four years. This has all
says Kathleen Brooks weighed on consumer confidence, which
has not followed retail sales higher and
instead has trended downwards since the
start of the year.

S
INCE the onset of the recession, the
pressure has increased to turn the UK
economy into a manufacturing cen-
tre of excellence and at the same
time become a nation of savers. But has the
nation really turned its back on its former
favourite pastime, shopping?
Well, the hard data would suggest no.
According to the British Retail Consortium
(BRC) retail sales rose by a very decent 3.4
per cent on an annual basis in June (see
chart.) So it seems that, fuelled by the hot
weather, we sought refuge in our cool, air
conditioned malls.
But whether this spree can last is ques-
tionable. After all, the UK consumer is heav-
UK CONSUMPTION TO HOLD UP
But some analysts believe that the UK con-
sumer, while still concerned about not
racking up the credit card bills of the past,
won’t turn her back on the shops altogeth-
er. Sam Hart, retail analyst at Charles
Stanley, the stockbroker, says that he is not
particularly concerned about the outlook
for consumption: “The most important fac-
tor (for consumption) is the outlook for
interest rates. In the last 18 months as inter-
est rates have been close to zero, any con-
sumer with a mortgage has benefited from
record low interest rates and as long as
you’ve managed to hold onto your job then
you have seen your disposable income and
consumption power rise.”
So the key to strong consumption will be
employment. Although data released yes-
terday showed that the unemployment
rate had fallen by 0.2 per cent between
April and May to 7.8 per cent, the axe has
yet to be taken to the public sector, which
could put upward pressure on unemploy-
ment. Not a worry, says Hart: “The 600,000
jobs forecast to be cut by the public sector
might not actually materialise. Employees
may well decide to take reduced working Although shopping
hours and pay cuts like they did in the pri- might be more
vate sector, which will keep a lid on unem- restrained, it’s unlikely
ployment and help consumption.” to grind to a halt
But will the VAT rise topple the UK’s
mighty consumer? David Jones from IG
Index doesn’t think so. However, he thinks Picture: GETTY
some retailers will be more protected than
others: “Everyone needs pants and socks at
the end of the day, so a company like Marks
& Spencer should do okay.” It’s the big-tick-
et sellers that could have the worst time, he

There’s an ETC for

your every need
More ETCs arrive as There are also a number of booster
ETCs, which are designed to optimise the
Copper-bottomed
returns
competition hots up, rolling over of commodity contracts
through minimising costs from the roll-
Picture: GETTY

over. When commodity futures contracts

says Jessica Mead are rolled over, there can be a divergence
between the spot price and the future
price.

F
ANCY investing in emerging market
equities, hedge fund performance or
copper? If so, then there’s almost cer-
tainly an exchange-traded product
(ETP) for that. For ETPs are rather similar
to the ubiquitous smartphone applica-
tion: they are cutting-edge, give users fast,
simplified exposure to investments and
providers can quickly launch in response
to user demand.
And as in the smartphone space, compe-
tition is hotting up among the providers
and especially in the commodity
exchange-traded products space. In the
second quarter there were 13 providers of
commodity ETPs managing almost €32bn
of assets. And this week we saw Deutsche
Bank’s exchange-traded funds (ETFs) divi-
sion db x-trackers list 10 new exchange-
traded commodities (ETCs) on the London
Stock Exchange. This follows the launch of
the provider’s ETC platform on the Xetra
Frankfurt exchange earlier this year.
They are backed by physical gold and
give exposure to a range of commodities
from gold and silver to industrial metals
via the S&P GSCI Industrial Metals index.
The Industrial Metals ETC includes expo-
sure to copper (43.48 per cent), aluminium
(30.19 per cent), nickel (11.84 per cent),
zinc (8.57 per cent) and lead (5.92 per cent).
While the db x-trackers’ products give
diversified one-stop exposure to commodi-
ties, you can also get single commodity
exposure via ETF Securities’ ETCs and
UBS’s range of ETCs – both listed on the
LSE. For example, the UBS CMCI
Aluminium ETC aims to follow the per-
formance of the UBS Bloomberg CMCI
(CMCI) Aluminium Total Return index. It
measures the collateralised returns from a
basket of aluminium futures contracts
and is designed to be representative of the
entire liquid forward curve. The sterling-
denominated ETC’s total expense ratio is
0.87 per cent compared to 0.37 per cent for
the dollar-denominated product.
And while single industrial metal ETCs
have not fully taken off, there is demand
from the investment community, says
William Adams, head of research at
BaseMetals.com. Adams adds that he is
seeing increased interest in the ETF sector
from the smaller institutional investors
such as hedge funds and sovereign wealth
funds that do not specialise in commodi-
ties but which nonetheless want some
exposure to the asset class.
While gold has been going from
strength to strength thanks to heightened
risk aversion, investors are still looking at
the prospects for industrial metals in the
light of a renewed global slowdown. as $20,220. For the more bearish others, at
But being more selective in your expo- least there’s an ETC that – ETF Securities
sure could yield you better returns. In its already offers short ETCs and others are
quarterly base metals report, Sucden sure to move into the space too.
Financial says that only copper and tin
“seem to present the most persuasive fun- ANALYSIS l Relative performance of different asset classes over
damentals for demand leading prices
900
the last decade Source: Deutsche Bank
higher, but other metals present supply-
driven bearish risks”. 800
MSCI World TR Index
For copper, we may see another dip, says 700
Steve Hardcastle, head of client services at 600
DJ UBS Commodity TR Index
Sucden Financial, but he adds this should 500 JPM Global Govt. EMU LC Index
be contained at around $6,250/tonne.
400 DBLCI Balanced OY TR Index
Technical analysis points to resistance at
300 (Commodity Index)
around $7,350/tonne. And for tin, the out-
look is for solid price performance in the 200
$17,000-$19,000 range but the metal has 100
the technical potential to exceed the 0
January and April highs and reach as high 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CITYA.M. 15 JULY 2010 Investment | Listed products 17

says, as people avoid buying these items ANALYSIS l UK Retail sales Gold is still in demand
once the tax hike comes into effect on 1 8
January. Picture: REUTERS
But does a robust consumer offer 6
investment opportunities? Hart picks
Next and Halfords as the top performers 4

% change on a year ago

Source: British Retail Consortium (BRC)

in 2010. He says that Next is considered
the best-run company in the retail sector. 2
It’s currently embarked on a share buy-
back programme and has a strong bal- 0
ance sheet. Likewise, he believes that
Halfords cycling business is tapping into -2
a structural trend: “It’s a high growth Non-food
-4
market. Not only are people more con- Food
cerned about health, but they are also
concerned about the environment.” -6 All Sales
In contrast, he says that Home Retail
-8
Group, the owner of Argos and Dec 08 Feb Apr Jun Aug Oct Dec 09 Feb Apr Jun
Homebase, could come under pressure.
IG’s Jones favours Tesco. Its share price
has been under pressure in recent
months and is now at levels last reached THE
in November 2009.
Jones believes that a lot of bad news TIPSTER
has already been priced in already: “The
retail index of the FTSE 350 has been
quite depressed for most of the year, but
some retail stocks are good dividend pay-
ers and should remain stable in a volatile
market.” The retail index is still hovering
around its six-month lows. This compares
with the banking sector. The FTSE 350
GOLD PRICE REMAINS
banking index has risen by 30 per cent in
the same time period.
EVER RESILIENT
For listed product traders who prefer

T
not to own single shares, Jones recom- HE combination of a falling dollar and
mends the FTSE 250 index since it’s a bet- rising gold prices lends yet more sup-
ter reflection of the UK economy port to the theory that precious metal
compared to its big brother, the FTSE 100, traders were spooked by the massive
which is more internationally focussed. quantities of gold that were deposited with
Exchange-traded fund (ETF) providers the Bank for International Settlements last
iShares and db x-trackers both offer ETFs week. While the spectre of sovereign debt
on the FTSE 250. The smaller UK index default still can’t be ruled out, the market
should do well as long as the UK con- seems to have overcome any previous con-
sumer doesn’t flag. cerns that this would have an adverse impact
If you believe that the UK will contin- on the price of gold. The current IG Index
ue to practice its favourite pastime, daily spot price is $1,213.41-$1,213.91
then buying the FTSE 250 on dips could But upward momentum in copper has
pay off quicker than we pay our credit started to stall, at least temporarily, follow-
card bills. ing concerns about diminishing demand
from China. Earlier this week data showed
the third successive month of import
declines, which hindered the red metal’s
recent rally from the June lows. Traders
could look to sell copper on any rallies
towards $3.05. The CMC Markets’ spread is
$3.0140-$3.0200.
Positive anticipation ahead of the corpo-
rate earnings season has given the FTSE
100 a boost. But all this could turn around
as Citi and General Electric report their
results since both firms do a significant
amount of business in Europe. Fluctuations
in the euro could also hammer earnings. ETX
Capital quotes 5,252.7-5,254.2.
Despite the markets’ focus on the earn-
ings season, they could still re-establish their
shorts of euro-US dollar. A relative sterling-
dollar trading above the key 2-day single
moving average (SMA) on the weekly charts
whereas euro-US dollar is trading below its
key 20-day SMA on a weekly basis. Short
euro-sterling at £0.8345 with a stop of a
daily close above £0.8450 with a first tar-
get of £0.8285 and then £0.8210. Spread
Co offers a spread of £0.8347-£0.8349.
Spread betters have been buying MAN
Group after the hedge fund was involved in
speculation linking it to a possible bid from
Bank of New York Mellon. Shares fell back
yesterday after jumping 5 per cent on
Tuesday, but there’s still belief of long-term
upside. Spreadex has a September MAN
Group spread of 219.3p-220.8p.
Jessica Mead

LISTED PRODUCT NEWS

KATHLEEN BROOKS
HSBC WELCOMES NEW BRAZIL ETF ETP TRADERS’ FLIGHT TO SAFETY TAX RULES CLARIFIED FOR ETFS
The global investment bank has decided to Deutsche Bank has released its quarterly ETF Securities confirmed the tax status of its
increase its suite of ETFs and now offers one update on the ETP market. It says that fears funds yesterday after reports that holders of
that tracks the Brazilian stock index. This is about the sovereign debt crisis in Europe and ETFs without “reporting” or “distributor” tax
the first BRIC ETF launched by HSBC. a slowdown in the recovery in the US have status would be liable to pay income tax at
However, it plans to increase its range fur- weighed on the ETP market, which recorded 50 per cent. But ETF Securities’ has con-
ther to include the other emerging power- negative growth of -0.85 per cent year to fimed that its products do not fall in the
houses in coming months. The fund has a date. However, flows have increased since bracket, since it has achieved “distributor”
total expense ratio of 0.6 per cent and will the start of the second quarter and in both tax status for all of its products listed prior to
track the MSCI Brazil index, which includes Europe and the US inflows have totalled June 2010. This means that holders of ETF
some of Brazil’s largest companies, such as $44.1bn, which is significantly above the Securities’ products will only be liable for
mining behemouth Vale. The new ETF will be $18bn for the first three months of the year. capital gains tax at either 18 or 28 per cent.
listed on the London Stock Exchange and will But investors are being much more cautious, For products listed after June 2010 reporting
HSBC has launched a new Brazilian ETF Picture: REX be domiciled in Ireland. with equity flows continuing to decline. fund status has, or will be, submitted.
 Lifestyle
18
The rising stars of
London’s wine scene
The new generation of sommeliers
is clever, passionate...and very
good-looking, says Zoe Strimpel
R
EMEMBER the old days, when
you’d sit down in a posh restau-
rant and a scary-looking French
man with a handlebar moustache
would sidle over to you with a book the
Mickey Narea
Launceston Place
NOT every sommelier has a degree in
economics from Cornell, or leaves a job
in high finance to pursue a love of wine.
Yet Chicago-born Narea, 29, did just this,
turning his back on a graduate position
at the Chicago Board of Options
Exchange for a job selling low-quality
booze wholesale to liquor stores in the
Chicago area. Now head sommelier at
Launceston Place in Kensington, he
recently won the US Wine Spectator’s
Award of Excellence for the wine list
there. He moved to London for love.
HOW DID YOU FALL IN LOVE WITH WINE?
My parents were foodies and we were
always eating out. By the age of ten I was
tasting wine. Later, I was sitting in a
wine-tasting course at university and we
tasted a 1952 Chateau Margaux. The
wine blew me away. I knew then what I
was going to follow for the rest of my life.
WHAT DO YOU LIKE MOST ABOUT BEING
A SOMMELIER?
I love finding that one wine that just
puts the exclamation point on a perfect
evening. I like getting to know the indi-
vidual; their more traditional preferences
or their adventurous spirit. Maybe you’re
introducing someone to a completely
new wine region or maybe you’re bring-
ing back an old favourite that is comfort-
ing at just the right time.
HOW ARE YOU MAKING YOUR IMPRINT ON
WINE IN LONDON?
I am trying to revolutionise the idea of
wine matching. Of course the wine must
pair with the food but what about the
atmosphere of the room, the company
you’re with, and even the mood of the
group? How about what music is playing
Little black book: the
Wharf’s new hotspots
Tim Badham
Going
Out
| Food & Drink
size of the bible? Well, times have
changed, and a gaggle of young studs
and studettes have taken over London’s
best wine lists. Well under 35, these ris-
ing stars are clever, passionate and – in
general – not from here. Their mission?
To make your night better. Rather than
to scare you into buying a wine you’ve
never heard of for a price you can’t
afford, these sommeliers want to be your
trusty guide through the vinous maze.
City A.M. meets five of the young guns
transforming London’s wine scene.
in the background? I’m not just match-
ing two elements but rather completing
the entire experience with wine.
WHAT WINES ARE YOU EXCITED ABOUT
JUST NOW?
Rhone Valley wines, and new world ver-
sions using the same grapes. I’m loving
Grenache and Mourvèdre for the reds,
and Marsanne, Rousanne, and Viognier
for whites – they’re so versatile with
food.
C
ANARY Wharf may have gleaming sky-
scrapers but it hasn’t exactly led the
way with high quality bars or top-end
members clubs (and no, Brodies doesn’t
count). Most serious financiers have stayed
put in their own private dining rooms rather
than venture to street level, unless a driver is
eagerly waiting with a TomTom pre-pro-
grammed to Mount Street.
However, things may be gradually chang-
ing. The tipping point was Roka, which
launched late last year. Its lounge bar, over-
looking Canada Square Park, offers a super-
smart spot for your shochu infusions and the
terrace is perfect for enjoying a cigar. The
Park Pavilion development helped cover all
the drink bases in Canada Square with
Wahaca’s Tequila Bar following hot on the
CITYA.M. 15 JULY 2010
Mathieu
Gaignon
Hélène Darroze
GAIGNON, 29, is the quintessential
French wine-man. From a family of wine-
makers, he followed the revered track of
catering school, apprenticeships and
Michelin-starred sommelier-hood. After
a stint at Petrus, he is now head somme-
lier at Hélène Darroze at the Connaught.
WHY DID YOU CHOOSE A CAREER IN WINE?
I grew up with wine, big Sunday lunch-
es, spending the summer in the Loire
valley. From the age of 16, I never consid-
ered doing anything else.
DEFINE THE PERFECT SOMMELIER
One that creates a versatile wine list.
You’ve got to cater to the customer who
only wants classic French wine, as well
as the one who wants to discover new
things. Your wine list should change all
the time, you should know your client,
and you should be very flexible.
WHY LONDON?
Here you can move quite quickly, learn a
lot, go to a lot of tastings. There’s a huge
restaurant scene. The possibilities are
huge. In France it’s much harder to move
up the rungs.
Erica Laler
Texture
ONE of London’s few top-flight female
sommeliers, the Swedish Laler, just 25, has
made a name for herself at Michelin-
starred Icelandic restaurant Texture. She
was a semi-finalist at the prestigious
Academy of Food and Wine’s 2010
Sommelier of the Year awards.
HOW DID YOU GET INTO WINE?
I was 18 and a friend put four wines in
front of me, asking if I could smell the dif-
ference. I could. That was how my passion
started.
WHAT’S YOUR USP?
I’m obsessed with small details: from glass
size to how you decant. Playing around
with temperature is very important.
Depending on the grape, I’ll serve a white
anywhere from eight to 13 degrees. Chill a
big wine and it will lose its flavours. Warm
it up and it will start to bloom. Doing this
correctly takes skill.
DO YOU MIND WORKING IN A MAN’S WORLD?
Sometimes people see a young blonde
Swede and discount me. But more and
more women are becoming sommeliers
now. It’s not bad, and I’m doing well.
heels of Parlour (sister bar to the Refinery in restaurant (the former Ubon site with its
Southwark). Just around the corner, the new own panoramic views) and also from the Inc
Rocket branch is proving popular with the Group. As Inc has already acquired the styl-
locals who have relocated from Mayfair and ish Tompkin restaurant and the simply stun-
the City. Bravely venturing away from the
square you should seek out Dockmaster’s
House, a converted Georgian building behind
West India Quay that serves good Indian
ning Attic at the top of Pan Peninsula, it
should be something to look forward to.
However, the next watershed opening will
be the introduction of the expansive new
food in a stunning environment. Veering over Boisdale restaurant and bar early next year
to Westferry Circus, you can find established in the old Cabot Hall building. Complete with
pedigree at Gaucho’s terrace bar where you substantial terraces it will offer fine food,
can enjoy perfect mojitos while you watch whisky, cigars and live jazz (hopefully only
the sun set, or pop up to the best hotel bar in
the wharf, Quadrato at the Four Seasons, to
enjoy something more cosmopolitan. Rumor
the first two will be Scottish).
Tim Badham is the founder of Innerplace,
London’s leading provider of VIP entertain-
has it that sometime next year the Circus will
also be benefitting from Docklands’ first
proper members club, just below Battery
ment, including film premieres, fashion shows,
launch parties and members club access.
www.innerplace.co.uk
CITYA.M. 15 JULY 2010
Joe McCanta
Saf; Pursip drinks conultancy
I HAVE never met anyone who is as enthu-
siastic about drinks as Joe, 29. A gin tast-
ing with him saw no fewer than 20
bottles of niche, boutique bottles lined up
on the counter at Saf, the vegan restau-
rant at which he oversees beverages. A
recent trip to Saf involved vegetable
champagne cocktails. And when it comes
to organic wine, Joe knows all. Perhaps it’s
his American background: a childhood in
sunny California with oenophile parents
and professional grounding in New York’s
frenetic cocktail scene. His first job, after
attending Boston’s Berklee College of
Music (where he was in a glam rock
band), was at a Boston wine shop.
HOW DID YOU FALL IN LOVE WITH WINE?
I remember when we were really little
walking through Sonoma with my par-
ents and picking grapes. Those sunshiny
memories of driving through wine coun-
try planted the seed. And we always had
good wines with dinner.
HOW DO YOU APPROACH YOUR JOB?
People should drink like they eat. The
most important thing for a sommelier is
to taste wine every day; it’s the only way
to learn. Then you’re better equipped to
do your job, which is to help guests find
what they’re looking for. You’re a detec-
tive for them. I’d never recommend a
wine just because I like it.
WHY ARE YOU SUCH A FAN OF
ORGANIC/BIODYNAMIC WINES?
Chemicals bring nothing to the wine,
they just weaken the grapes. Wine has
been around for centuries, but sprayed
with pesticides only since the 1980s.
Biodynamic wine-growing is the pinnacle
of natural harmony. It promotes more liv-
ing organisms so the vineyards are literal-
A very Moghul drama
Historian authors are back
with the second in a riveting
series of 16th century intrigue
EMPIRE OF THE MOGHUL:
BROTHERS AT WAR
BY ALEX RUTHERFORD
Headline £18.99
hhhhi
by Verity Pugh
THE Moghul dynasty, which spanned the
16th to 18th centuries in South Asia, is in
itself like a work of fiction. Its turbulent
history is rich with tales of great emper-
ors, passion, deceit and violence. Diana
and Michael Preston (pen-name Alex
Rutherford) convey all this with great
panache. Brothers at War, the second
instalment in this five-part series, draws
you into a thrilling account of the sec-
ond Moghul emperor’s journey to
reclaim a kingdom bequeathed to him
by his father, lost through his own irre-
sponsibility.
Humayun is young when he inherits his
father’s empire and his lack of maturity is
apparent in his judgements. His leader-
ship is questioned early on, when a plot by
his brothers to overthrow him is uncov-
ered. As the new emperor indulges in
hedonistic pleasures, other rebels take
their chance to attack and Humayun finds
himself embarking on a journey with an
ever-diminishing army to try to regain his
empire. In the face of adversity, however,
he never loses faith in his fate as the right-
ful ruler, though he is betrayed by those
Costanzo
Scala
Benares
SCALA, 32, is the wine angel of Indian
food. You’d think, being from the idyllic
island of Ischia in southern Italy, he’d
have gravitated towards a European
restaurant, with an eye for Barolos only.
But no: “For me as a sommelier, Indian
food is the most exciting by far. It’s a road
less travelled, with its own set of rules
entirely.” He’s also the kind of guy you
might want to hug after your meal; quite
literally the most angelic of sommeliers.
He was a chartered surveyor in Italy
before moving to London.
WHY DID YOU BECOME A SOMMELIER?
In Italy, food and drink is so obvious – it’s
all local and it’s all good. But when I got to
London I discovered whole new foods and
tastes; I could honestly make love to taste,
something I discovered here. There is
something so special about eating out
with someone and wine is a huge part of
that experience. Specifically, I began my
catering career at the Westbury Hotel and
was inspired by two people there to
become a sommelier.
ly buzzing with life, which makes for bet-
ter grapes. WHY DO YOU LOVE MATCHING WINE TO
INDIAN FOOD?
WINES TO WATCH? A sommelier for Indian food is far more
Portugal is making some phenomenal important than with other cuisines. The
red blends. And Moldova – around margin of error can be huge; you’re pair-
Croatia and Hungary – is also producing ing reds with fish and whites with meat.
some really exciting wines now. You’re pairing lobster with Brunello;
there are no rules. It is totally exciting.
WHERE WILL YOU BE IN TEN YEARS?
On a beach sipping one of my own cock- WHAT’S THE SECRET TO BEING A GOOD
tails: a well-made daiquiry. Or the best SOMMELIER?
drink in the world: vintage Clos du Mesnil You have to love people. You need to be
Champagne. able to predict your customers’ thoughts
VEXED IN THE CITY
SOLVING YOUR
WORK-LIFE
closest to him.
This book has everything: a flawed yet
PROBLEMS
heroic leader, love, jealousy and treach-
ery. It is a perfect summer read – fast-
paced and completely absorbing. It’ll
have you gripped from start to finish and
Is snubbing a
colleague on
left wondering where the hours went.
THE PHANTOM OF THE OPEN
BY SCOTT MURRAY &
SIMON FARNABY
Yellow Jersey £12.99 holiday okay?
hhhii
By Timothy Barber DEAR VEXED: It turns out a close col-
league and I have booked a week’s holi-
HOWEVER badly the worst-performing day in the same resort in France, each
player does at the Open at St Andrews of us with a group of friends. She’s real-
this weekend, they won’t come close to ly keen to hang out when we’re there
performing as badly as Maurice Flitcroft but all I want to do is forget work –
did in 1976. A crane driver from Barrow- plus, we’re not really close friends.
in-Furness with virtually no experience What do I do? I don’t want to create
of golf, he nevertheless managed to play tension but I also don’t want anything
in the qualifying round of the 1976 Open to do with her on my holiday.
by spuriously declaring himself a profes- Mark, 33, asset management
sional. He carded a score of 49 over par –
F
by a very very wide margin the worst ORGIVE me a chuckle, but that’s rather a
round in the history of this or any other funny situation you’ve got yourself into
championship. Golf’s top brass were there. Of all the resorts in Europe,
incensed, but Flitcroft became some- the pair of you are heading
thing of a folk hero. to the same one?
This amusing account of his exploits It seems deeply unlikely.
revels in his heroic eccentricity, and sto- Therefore I am going to posit
ries of his rebellious National Service a daring hypothesis: she knew
experiences and time spent as a slapstick you were going there and booked
high diver (again, without any qualifica- accordingly. That, I’m afraid, is
tions for the job) are as entertaining as Stalker Tactics 101. Have you
his golf adventures. But it’s hard to avoid noticed any behaviour from
the view – though the book skates over her that could indicate
this – that whatever he achieved in the more than collegial feel-
name of mischief and subversion, ings? For example, meet-
Flitcroft’s life was more tragedy than ings that seem to be more
triumph. about her eyelashes flut-
Lifestyle 19
Pictures: Micha Theiner/City A.M.
and needs and to guide them. We are all
human beings, and a sommelier knows
that we’re here to make experiences
memorable; when you leave a restaurant,
all you have is memories. Above all, the
customer needs to be treated well from
the very moment they enter the restau-
rant and of course I play a role in that.
WHERE DO YOU WANT TO BE IN TEN YEARS?
A true citizen of the world. As for wine, I’ll
stop when my soul tells me to.
tering and her finely tanned cleavage heaving
than about the movement of Chinese stocks?
Now, I don’t know what your romantic situ-
ation is, but given that you’re going on holiday
with your friends, I’d wager you’re single and
that she is too. And that you’ve therefore
picked up on the vibes (single thirty-some-
things are good at this) coming from her, and
are not keen. Meanwhile, she is playing the
friend card, getting all excited about the
prospect of a social extravaganza abroad –
that’s Stalker Tactics 102 – rather than com-
ing clean about her feelings.
On first glance, you are in a double bind: not
interested romantically, and not interested
socially. Romantically, you are of course under
no obligation to please her (on the contrary,
colleagues should keep relations strictly pla-
tonic), and she is vaguely in the wrong by put-
ting herself in your path so flagrantly. Socially,
it’s a tough one. You don’t want to offend her,
as this could have bad ramifications at work.
But on the other hand, you are entirely within
your rights to desire a holiday free from all
vestiges of the office.
Crucially, she has traversed boundaries by
invading your space and not being sensitive to
your privacy. Therefore you need to make it
clear that you will be doing your own thing on
this holiday.
If, like most men, you fear confrontation,
don’t worry. It needn’t get to that point. Just
remain elusive – never give a clear indication
of where you’ll be at any given time. The
phrase “I’m not sure what we’re doing yet”
will stand you in very good stead. If she finds
you at the pool, just tell her you’d like to read
your book. Or if you’re with your friends, giv-
ing her the cold shoulder should be easy. It
would be very strange if she didn’t
get the message.
As a last resort, you could
always consider trying to book
somewhere else. Because other-
wise your colleague is going to
be a pretty unavoidable presence,
the degree to which will be
determined by how diplo-
matically harsh you’re
prepared to be.
vexed@cityam.com
 20 Lifestyle | TV& Games CITYA.M. 15 JULY 2010

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

QUICK CROSSWORD
    

SUDOKU KAKURO
4 16 45 8 21 35 7
8 9 14
15  
37 8
Place the numbers from 1 to 9 in each empty cell so that each 45
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from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 11 23
     
above or to the left of it. 12 16
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column, but it must be in a
17
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8
  
19 7
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17 10 6
16 38
    14 7 9
 

  
   
 
LAST ISSUE’S
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and knees (5)
4 Picture puzzle (5)
7 Leaves (a job or post)
2 Continuous portion
of a circle (3)
3 Milky plant substance
Using only the letters in the Wordwheel, you have
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voluntarily (7) that coagulates on
8 Went in advance exposure to air (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A of others (3)
9 Sepals of a flower (5)
4 Takes a chance (5)
5 Curry dish cooked
or more, all must contain the central letter and
letters can only be used once in every word. There
M K 12 Malice (5) and served in a flat-

SOLUTIONS KAKURO is at least one nine-letter word in the wheel.

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a lawn (5)
bottomed metal pot (5)
6 Move furtively (5)
10 Melody (3)
QUICK CROSSWORD 2 7 2 1 8 7 1
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 City Focus HOW TO WEAR MEN’S 21
SWIMMING TRUNKS
| Law SEE THE LIFESTYLE PAGES
ON FRIDAY

City men should

think of pre-nups
end up in court.
Even though pre-nups are not binding
in England, they are often taken into
account by a judge during divorce pro-
ceedings. In some cases it has been the
main factor which the court has relied on.
A pre-nup allows you to take some control
of your finances, and if you are of full age,
education and understanding, why
BARBARA REEVES should it not be assumed that you know
PARTNER, MISHCON DE REYA what you are doing rather than the court?
One of the reasons that men are reluc-
DECADE ago this October, English tant to enter into pre-nups is perhaps a

A divorce law was revolutionised by

the case of White v White. Firstly, it
recognised the non-financial con-
tributions of the wife, and secondly it said
that the default position when dividing
assets at the end of a marriage should be
to share them equally.
Given this significant shift in approach,
family lawyers expected a rise in pre-nup-
tial agreements, particularly from
wealthy men wishing to protect their
assets from a court-imposed 50/50 split.
But that hasn’t happened, perhaps
because there is no law upholding pre-
nups in this country. However, this sum-
mer we could be about to see a profound
change in the way that the English court
approaches pre-nups when we learn the
outcome of another case.
German heiress Katrin Radmacher,
who is worth £100m, is currently fighting
to enforce a pre-nup that her husband
signed, which would protect her personal
wealth. If the court finds in her favour,
then while pre-nups will still not binding,
the decision could signify a more robust
approach being adopted by the court in
dealing with such marital agreements.
Added together, this all means that
high-earning men should be thinking
much harder about pre-nups than they
are at the moment. Research that we have
carried out shows that although 40 per
cent of high net worth men – those who
earn £100,000 a year or more – say that
they considered one, only 8 per cent actu-
ally signed one. Sixty-three per cent say
that they believe that their assets should
be split equally should they ever divorce.
A nice sentiment, perhaps, but they may
not be feeling so generous if they ever do
romantic one, but they are just not facing
up to the reality that a half of all mar-
riages fail. Pre-nups may be seen to under-
mine commitment, but really they
should be seen as a kind of insurance
against expensive and lengthy litigation.
Taking out insurance on your partner’s
life would not imply that you anticipated
their early demise. Likewise, wanting a
pre-nup does not mean that you want to
or expect to divorce. By not recognising
the reality of divorce statistics, men are
avoiding a responsibility to look after the
family finances.
There is an upside to pre-nups.
Acrimonious divorces are generally
caused by disputes about money. This can
damage relations between parents and
children. Rather than a pragmatic
romance-killer, pre-nups should be seen
as an opportunity for both parties to seek
predictability and certainty of outcome. It
might be embarrassing to talk about
money, but they have overcome this in
Europe and in the US, so why not here?
There is also a misunderstanding
about what pre-nups are. Rather than
being one-size-fits-all, global agreements
about all of a couple’s assets, they can be
tailored to suit individual circum-
stances and may only need to deal with
certain assets. People are getting mar-
ried later these days, and have often
built up some assets before they marry.
It might well be reasonable to protect
those – this is especially true in the case
of second marriages, and even more so if Katrin Radmacher’s would want to keep. is time for them to ensure that all the
there are children from previous rela- court case will be The men we spoke to felt that the court appropriate safeguards are in place to
tionships. Or there may be a property settled later in the tends to be more favourable towards ensure they do not leave themselves
that has been inherited and which has summer. women in a divorce settlement. Yet they unprotected from potentially costly legal
emotional importance that a party Picture: GETTY still took no steps to protect themselves. It battles.

It’s time to wave goodbye to the lockstep

its assets, that sort of system does not
work. The market for bright and talented
lawyers is fiercely competitive and a law
firm needs to offer a wider package
which takes into account long term
careers in the industry. As many of the
old ways are coming under the micro-
scope – such as the billable hour and the
partnership model – so increasingly we
FRANCES HAUGHIAN are seeing that progressive law firms are
SENIOR HUMAN RESOURCES MANAGER, looking beyond the lockstep.
OLSWANG Olswang is the latest firm to change the
way it treats associates, and to set out a
the next level, but they can do this at their
own pace and in line with their own
career aspirations.
The reason for changing to this system
was to make sure that we can provide a
career path that suits all our associates.
People develop at different rates and have
different career goals. This way of doing
things gives them the opportunities and
support to get there. It’s all about flexibil-
ity, and giving lawyers a career path that
they can understand, and which they feel
they have some control over.
This approach of developing people
and rewarding them in line with their
performance mirrors our clients’
approach and moves law firms toward an
operating model more like traditional
companies and commercial organisa-
tions.
Younger graduates appreciate the new
system. For a start, they expect that they
will be rewarded in line with what they
contribute. But more importantly, we
have to recognise that these days not
everybody has the same career aims.

T
HE legal industry is changing. The more modern, merit-based career path for This is what lawyers want. When we Honest feedback, development and men-
traditional lockstep model of career them. Under its new scheme, which will spoke to associates who worked in the old toring are all vital, so that they are
progression – where a lawyer would come into effect on 1 September, there are lockstep system, many of them said they empowered to push their careers in the
qualify and then work for several three levels for associates, and four bands wanted to see clarity about their progress, direction that they want to go in.
years before hopefully being made a part- within those levels. Progression to the and wanted to know what they need to do The move towards a freer, more flexible
ner, with pay rises reflecting the number next band or level will depend on per- to progress at their own pace. and merit-based system is inevitable in
of years they had been in the firm – is formance and ability rather than the The impetus for change isn’t just com- law firms. The legal industry is slowly
increasingly viewed as outdated. number of years served. ing from inside law firms however, but coming to understand this and in doing
In the modern City, and especially now Associates will have to meet a certain from seeing how the world around us has so will improve its chances of attracting
when every firm has to make the most of number of criteria before they can rise to changed. and retaining the best talent.
 Sport
22 CITYA.M. 15 JULY 2010

Hard work
WHICH OF ENGLAND’S WORLD
CUP FLOPS WILL BE AROUND
FOR EURO 2012?
David James

starts here
(Portsmouth)

Glen Johnson
(Liverpool)

for Capello
Ashley Cole
(Chelsea)

John Terry played by our top clubs domestically.

(Chelsea)
Rio Ferdinand
(Man Utd)
ON THE BALL WITH
Steven Gerrard TREVOR STEVEN
(Liverpool)
T
HE Football Association have
one almighty PR exercise on
their hands if they are to gen-
Gareth Barry erate interest for England’s
(Man City) friendly with Hungary on 11 August.
After leading a dismal World Cup
campaign, I feel it’s down to coach
Fabio Capello to come out and shoul-
Frank Lampard der the blame, while assuring fans of
(Chelsea) a brighter future.
If he doesn’t, then red-faced FA
chiefs could be looking at a revolt
from fed-up fans, and subsequently a
James Milner quarter-full Wembley, as Capello pre-
(Aston Villa) pares to lead his men into the Euro
2012 qualifiers, starting against
Bulgaria on 3 September.
Irrespective of how many turn up
Emile Heskey at Wembley in three weeks’ time,
(Aston Villa) Capello’s work starts here.
One thing he would have learned
from South Africa is that he needs to
go back to basics and look to intro-
Wayne Rooney duce a more continental 4-3-3 forma-
(Man Utd) tion, which has not only been proven
by Spain, Holland and Germany, but
also coincides with the systems
Capello has stuck religiously with
the 4-4-2 throughout the qualifiers
and World Cup, but as that has clear-
ly not worked, he simply has to look
to bed in the likes of Adam Johnson
and Ashley Young flanking Wayne
Rooney up front.
Longer-term, Capello has a problem
in trying to replace the likes of John Johnson must feature in the European Championship qualifiers. Picture: GETTY
Terry, Rio Ferdinand and Frank
Lampard, who are unlikely to be play-
ENGLAND FUTURE XI
ing at the 2014 World Cup in Brazil.
Worryingly, none of our top sides
seem to be producing English talent
worthy of stepping into the breach.
Indeed only Martin O’Neill at Aston
Villa, in the likes of Young, James Joe Hart
Milner and maybe Fabian Delph, can (Man City)
offer any kind of encouragement.
I’d like to see the likes of Arsenal’s
Jack Wilshere and Everton’s Jack
Rodwell eased gently into the England
Chris Smalling Gary Cahill
set-up, even in this next qualifying
(Man Utd) (Bolton)
campaign, while Capello should also Micah Richards Kieran Gibbs
be monitoring and leaving his office (Man City) (Arsenal)
door open to lads such as Nathan
Cleverley, on loan at Watford, and
Ipswich’s Connor Wickham, who are
both showing potential. These lads Jack Wilshere Jack Rodwell James Milner
may think they are a million miles (Arsenal) (Everton) (Aston Villa)
away from a call-up, but they could be
only a season away.
Criticism of Capello missing the
Uefa Under-19 Championship in
France is harsh, he will undoubtedly Adam Johnson Ashley Young
have his coaches monitoring any new (Man City) (Aston Villa)
talent. He has more pressing issues to Wayne Rooney
deal with back home. (Man Utd)

Beckham doesn’t want to boss England Henry to make

Red Bulls bow
Beckham’s name was touted as a looked and thought I could be going “He [Capello] did everything that
against Spurs
▲

FOOTBALL
BY FRANK DALLERES
DAVID BECKHAM has put paid to calls
for him to become England boss by
possible replacement for Capello in
the wake of England’s failure in
South Africa, where the injured 35-
year-old formed part of the Italian’s
into that.
“Coaching-wise, I love coaching
kids. But coaching a team, being a
manager – at this point in my career I
he could have done,” he added.
“He prepared us right. He worked
the players to the right amount and
he set everything up for the players,
▲

insisting he has no interest in moving
into management when he retires
from playing.
And the former Three Lions captain
has backed current coach Fabio
Capello, laying the blame for a dread-
ful World Cup campaign squarely at
the feet of the players.
SPORT | IN BRIEF
McCartney to design Team GB kit Torres back for Liverpool opener Paulinho triumphs in Tour stage
OLYMPICS: Fashion designer Stella
McCartney has been picked to design
British athletes’ kit for the London 2012
Games.
McCartney will also oversee a range of
leisurewear for fans, after being appoint-
ed creative director for the project by
Team GB sponsors Adidas.
The 38-year-old called it “an amazing,
once-in-a-lifetime opportunity”, adding: “I
have a million challenges. I have to make
it look good, I have to make it feel good
and I have to make it work technically.”
backroom staff.
But he said: “I must admit it’s
something I’ve never been interested
in. It’s not a passion of mine to be a
manager of a football team.
“I’m passionate about the game
and being there and obviously I was
wearing the suit so people have
FOOTBALL: Liverpool expect striker
Fernando Torres to recover from injury in
time for their Premier League opener
against Arsenal on 15 August.
But the Spain star, who faces four
weeks out with a thigh tear, will miss the
start of their Europa League campaign.
“He had an MRI scan yesterday which
confirmed a small tear,” said Liverpool
doctor Peter Brukner. “He should be able
to resume training within two to three
weeks and be able to play again within
three to four weeks.”
don’t want to do that and in the
future I don’t think that will happen
either.”
Capello bore much of the criticism
for England’s limp second-round exit
but the Italian has kept his job, and
Beckham believes it was the squad
who must take the blame.
CYCLING: Portuguese rider Sergio
Paulinho won the 10th stage of the Tour
de France as Andy Schleck maintained his
lead in the overall classification.
Paulinho, of Team RadioShack, beat
Caisse d’Epargne’s Vasili Kiriyenka in a
two-way sprint finish. British hope Mark
Cavendish finished ninth, at the head of
the peloton, to add 12 points to his green
jersey total. Yellow jersey holder Schleck
stayed 41 seconds ahead of defending
champion Alberto Contador as the top of
the standings was unaffected.
but obviously the players know it was
disappointing.
“We didn’t perform and as players
you know that. You know when you
don’t perform, you know when you
don’t play well.
“The manager can do so much and
then it’s down to the players.”
Watson stars with bat and ball
CRICKET: Shane Watson claimed career-
best bowling figures as Australia
reclaimed the upper hand on day two of
the first Test with Pakistan at Lord’s.
Watson took 5-40, including the wick-
et of Pakistan’s top scorer Salman Butt
(63), as they were bowled out for just
148 in reply to the Aussies’ 253.
He then turned his hand to batting, tot-
ting up a swift 31 as Australia got their
second innings under way. But captain
Ricky Ponting went for a duck as
Pakistan restricted them to 100-4.
FOOTBALL
ARSENAL legend Thierry Henry has
confirmed his switch from Barcelona
to New York Red Bulls – and is set to
make his first appearance against old
rivals Tottenham.
Henry, 32, is believed to have
signed a four-and-a-half-year contract
in the Big Apple after Barca agreed to
release the France striker a year early.
“This marks an exciting new chap-
ter in my career and life,” said Henry.
“It is an honour to play for the New
York Red Bulls. I am fully aware of the
team’s history and my sole goal dur-
ing my time here is to help win the
club its first championship.”
The Gunners’ record scorer, who
only hit four goals last season, will
team up with former Aston Villa for-
ward Juan Pablo Angel and has been
pencilled in for a debut against Spurs
in a friendly next Thursday.
Cash-strapped Barcelona, mean-
while, have clinched a £130m loan
from two of Spain’s leading banks to
ease their cash-flow problems.
CITYA.M. 15 JULY 2010 23

Woods gets advice Results

CRICKET
FRIENDS PROVIDENT T20 - NORTH DIVISION: Durham v
FIRST TEST MATCH: Australia v Pakistan (Lord’s); Australia
253 (S M Katich 80, M E K Hussey 56no, M Aamer 4-72) and
100-4 v Pakistan 148 (Salman Butt 63, S R Watson 5-40).
Overall: 1 A Schleck (Luxembourg) Team Saxo Bank 49h 00m
56s; 2 A Contador Velasco (Spain) Astana +41s; 3 S Sanchez
Gonzalez (Spain) Euskaltel - Euskadi +2.45. Others: 17 Wiggins

from Faldo on how

Derbyshire (Emirates Durham ICG); Durham 110-2 abandoned
(P Mustard 70no) v Derbyshire. No result. Durham (1pts)
Derbyshire (1pts). Nottinghamshire v Lancashire (Old
Trafford); Nottinghamshire 138-7 (A D Hales 83) v Lancashire
83-1 (S C Moore 51no). Lancashire (2pts) beat
Nottinghamshire by 9 wickets. Warwickshire v Yorkshire
CYCLING
TOUR DE FRANCE.-Stage 10 (Chambery - Gap, 179km): 1 S
Paulinho (Portugal) Team Radioshack 5h 10m 56s; 2 V
Kiryienka (Belarus) Caisse d’Epargne, same time; 3 D Devenyns
(Belgium) Quick Step +1.29. Others: 9 M Cavendish (GB) Team
+7.18; 67 Thomas +51m 08s; 108 Wegelius +1h 17m 14s; 144
Cummings +1:32.02; 149 D Millar (GB) Garmin - Transitions
+1:34.41; 151 Cavendish +1:35.58; 160 Lloyd +1:41.28.
TODAY’S DIARY

to win back fans

(Edgbaston); Warwickshire 145-8 v Yorkshire 131(K H D
Barker 4-19). Warwickshire (2pts) beat Yorkshire by 14 runs.
SOUTH DIVISION: Glamorgan v Somerset (The SWALEC
Stadium); Glamorgan 116-7 v Somerset 92-3 (M E
Trescothick 54no). Somerset (2pts) beat Glamorgan by 7
wickets.
HTC - Columbia +14.19. 42 D Lloyd (GB) Cervelo Test Team
same time; 47 J Hunt (GB) Cervelo Test Team, same time; 61 G
Thomas (GB) Sky Professional Cycling Team, same time; 70 B
Wiggins (GB) Sky Professional Cycling Team, same time; 163 S
Cummings (GB) Sky Professional Cycling Team +15:47; 164 C
Wegelius (GB) Omega Pharma-Lotto, same time.
CRICKET
Friends Provident T20 - South Division: Essex v
Gloucestershire (Chelmsford). North Division:
Northamptonshire v Lancashire (Northampton),
Nottinghamshire v Leicestershire (Trent Bridge).

SPORTS EDITOR JON COUCH

THE OPEN
CHAMPIONSHIP
BY FRANK DALLERES
FORMER Open champion Sir Nick
Faldo has offered troubled world No1
Tiger Woods advice on how to repair
the damage to his public image.
Woods, who starts his quest for a
third Claret Jug this morning, has
seen his name dragged through the
mud since revelations about his infi-
delity emerged last year.
But Faldo, whose own private life
has been the topic of moral debate,
has a simple solution to improve the
American’s reputation.
“Give,” said Faldo. “You give to
them [spectators], they will give back.
Simple as that. If you’re giving in any
way, with smiles, comments, waves,
good thoughts, I’m sure it will all
come back.”
Woods has had a mixed reception
since returning to competition,
attracting criticism for exploiting his
personal life in an advertisement but
receiving some favourable reactions
from crowds.
email sport@cityam.com
“Tiger is doing his own thing,”
Faldo added. “He always has. Tiger
has been Tiger for the 15 years he’s
been out here. He believes he’s doing
the right thing, so it’s his choice how
he wants to do it.”
Woods is aiming for a 15th Major HEAR THE CROWD AND SHARE IN THE EXCITEMENT
victory, but will need to do some-
thing he has not done since the storm WHILST YOU TASTE THE FINEST CUISINE.
surrounding his marriage broke: win
a tournament. The 34-year-old fin-
ished a creditable fourth on his
return at the Masters and matched FROM WITHIN TOUCHING DISTANCE, SEE INSPIRING
that at the US Open, but has looked
far short of his formidable best. FOOTBALL FROM THE WORLD’S ELITE, AND
Yet he remains the bookmakers’
favourite to win the 150th Open and SMELL THE SCENT OF VICTORY.
Peter Dawson, chief executive of the
Royal and Ancient, thinks he could be
primed to set tongues wagging about SEASONAL HOSPITALITY AT CHELSEA FOOTBALL CLUB
his golf again at last.
“I think Tiger regrets many things,
he is trying to put them right and I
believe he is succeeding actually,” he
IT’S TRULY SENSEATIONAL
said. “Let’s hope this week is the week
he gets his game back.”

Golden oldie
Tom looks to
go one better
THE OPEN
CHAMPIONSHIP
BY JON COUCH
TOM WATSON is out to re-
write the Open histo-
ry books at St
Andrews this week –
at the age of 60.
The American legend came
within a whisker of becoming
the oldest Open champion 12
months ago when he lipped a
nine-foot putt on the final green
at Turnberry before losing to
Stewart Cink in a play-off.
Now the five-time champion, com-
plete with artificial hip, is back for a
seventh Open Championship cam-
paign at the Home of Golf, and a 33rd
in all.
But despite a half-decent season,
which has seen him finish eighth at
the Dubai Desert Classic and in the
top 30 at both the Masters and US
Open, Watson admits he will have
to pull out all the stops if he is to
emulate Harry Vardon, the only
man to lift the Claret Jug six
times.
“God, I hope a 60-year-old
guy can do that. That would
be pretty cool,” he said. “I never think
about my history in the Open. What I
think about is I’m still here as a com-
petitor to try to play the
golf course the best I
can and that’s what
I’m doing.
“I wish I was play-
ing as well as I was
last year coming in
here. I’m putting well,
but I’m not striking the
ball that well, so that con-
cerns me, especially in the
wind. Frankly that’s where
I am right now. It’s no dif-
ferent than what it was,
except I’ve got an artifi-
cial hip, I’m a little
stiffer and don’t hit the
ball as far. But I do have
a little more experience
under my belt.”
Watson’s remarkable To enquire about our range of packages for
performance 12
months ago makes him the 2010/11 season, call 0871 223 1166, today.
exempt to play for four
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Our lowest
spreads ever.

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