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2 News CITYA.M. 14 JUNE 2010
BY HARRY BANKS and the subsequent market reaction amid concern about weaker growth
may have more in common with the and fiscal problems. Investors lowered
THE debt crisis hitting southern start of the subprime crisis in July their risk exposure. Concerns about development by businesses.
WORLD ECONOMY
Europe resembles the 2007 subprime 2007 than the collapse of Lehman public debt in developed countries, Senate Democrats have already
crisis more than the financial crisis fol- Brothers in September 2008, stated the state of financial markets and pol- PRESIDENT Barack Obama and his introduced legislation that would
lowing the collapse of Lehman BIS, which is chaired by Bank of France icy tightening have fuelled fears. aides are stepping up a push for fur- renew expiring unemployment bene-
Brothers, a report by the Bank for governor Christian Noyer. ther government spending to boost fits, and extend business and individ-
International Settlements (BIS) said Rising Libor-OIS spreads and the BIS, chaired by the economy as signs grow of the ual tax breaks. They would offset
yesterday. dislocations in US dollar funding mar- recoverys fragility. some of the bills costs by raising
In its quarterly review, the bank also kets recalled events in July-August
Christian Noyer, says The White House is calling for taxes on hedge fund managers and
said investors were concentrating on 2007, when global interbank and the Eurozone debt cri- Congress to urgently pass measures other steps.
signs of stress in the financial system money markets began showing clear sis resembles the 2007 to extend jobless benefits, aid cash- Meanwhile Republicans have cast
and neglecting positive economic signs of stress. subprime crisis. strapped states and provide targeted the administrations policies as fiscal-
data. The report said investor confidence tax breaks to encourage research and ly reckless.
BY MARION DAKERS rights issue. The state currently owns government will not be awarded for a
a 40 per cent stake in the firm. second year running, the sponsor said
BRAZILIAN national oil company The pre-salt fields were discovered yesterday. Mo Ibrahim, a Sudanese-born
Petrobras is preparing a $25bn off the coast of Brazil in 2007 and telecommunications entrepreneur,
(17bn) rights issue to raise funds to take their name from the hard layer founded the worlds largest individual
explore lucrative pre-salt oil fields. of salt above the oil deposits. award as a way to encourage good gov-
The rights issue could take place as Petrobras and Brazilian oil regula- ernance in a continent blighted by cor-
early as next month, and would be tors have both commissioned inde- ruption and a frequently loose
the worlds biggest so far this year. pendent valuations of the oil, which adherence to democratic principles. A
Petrobras has planned a $220bn will not be completed until after the seven-member prize committee, chaired
(151bn) investment scheme in the rights issue is completed. by former United Nations Secretary-
pre-salt fields over the next five years, The firm already produces a quar- General Kofi Annan, met on Saturday
and hopes to raise $25bn from minor- ter of the worlds deep water oil, and but did not select a winner, the Mo
ity shareholders to kickstart develop- stands to benefit from slower produc- Ibrahim Foundation said. The committee
ment. tion in the Gulf of Mexico following did not choose a winner last year either.
Under the deal, the Brazilian gov- the Deepwater Horizon spill. It told the foundation there had been no
ernment will sell the rights of up to The company last week signed up new candidates and so no winner had
5bn barrels of oil and gas to Citigroup, Itau Unibanco, Bank of been selected.
Petrobras, which would use the assets America, Morgan Stanley, Bradesco
as the basis for a share issue and as and Santander to manage the sale. Paternoster hires for valuation
leverage for additional loans. It will hold an extraordinary share- British pension buyout firm Paternoster
The swap enables Petrobras to holders meeting on 22 June to has hired bankers to put a valuation on
retain debt to equity ratios below the approve the capitalisation plans. the company, the Independent on
35 per cent required to retain its The government passed laws to THE National Housing Federation (NHF) has warned the number of new affordable Sunday reported. It said Deutsche Bank,
investment grade credit rating. approve the deal last week, putting homes built this year could slump by 65 per cent to 20,390 because of funding cuts and the largest shareholder, is likely to buy
The Brazilian press has reported in place regulations for exploring planning changes. The NHF has urged housing minister Grant Shapps (above) to ensure out investors and merge the business
that the government will also step in the pre-salt fields. the government honours spending commitments on new housing schemes. Picture: REX into its Abbey Life insurance operation.
4 Politics CITYA.M. 14 JUNE 2010
Sack unethical
bankers, says
commission
Commenting on the report, Davis
POLITICS
BY DAVID CROW said another banking crisis would
break the country.
BANKERS that have behaved unethi- He added: If we dont do some-
cally should be struck off by a new thing along these lines, the next time
professional standards board, accord- this happens well go bankrupt. Itll
ing to an influential commission into all be over well make Iceland look
the banking industry. like a successful economy.
The Future of Banking Commission Treasury officials said they wel-
released its long-awaited report yes- comed the report as a contribution
terday, with a radical blueprint for to debate but played down its signifi-
the industry in the wake of the finan- cance, pointing out the government
cial crisis. has just launched a similar commis-
It recommends that a new body sion.
should be created to police bankers, Sources close to the commission
taking its cue from the General said its report would be taken serious-
Medical Council that has the power ly because Vince Cable, now business
to strike doctors and nurses off. secretary, was one of its authors.
And the commission, chaired by But Cables spokesperson refused
Tory MP David Davis, says that bonus- to say whether he backed all of its rec-
es should be linked to performance ommendations. Hes not distancing
over a five-to-ten year period not himself from it, but it would be inap-
return on equity or higher earnings propriate to comment on something
per share. he did in opposition now that hes in
All banks should be forced to draw government, she said.
up living wills to prepare for poten- The British Bankers Association
tial failure, the commission said, said the industry had already started
while an international agreement to tackling many of the
hive off investment banks from retail commissions con-
banks should also be pursued. cerns
to be reviewed
BRITAINS top two defence officials
will step down later this year, the gov-
ernment said yesterday, but denied
they were being blamed for mistakes
in Afghanistan or for wasteful mili-
David Cameron has tary spending.
POLITICS last ten years is a real concern, as is appointed Lord Britains most senior military offi-
BY DAVID CROW the way health and safety rules are Young to investi- cer, chief of the defence staff Jock
sometimes applied. gate health and Stirrup, and Bill Jeffrey, the top civil
HEALTH and safety red tape that He added: We need a sensible new safety legislation servant at the Ministry of Defence, are
costs businesses billions of pounds a approach that makes clear these laws expected to leave towards the end of
year could be slashed. are intended to protect people, not Pictures: PA, Micha the year once a strategic defence
The Prime Minister will today overwhelm businesses with red Theiner/City A.M. review (SDR) ordered by the new gov-
announce the appointment of Lord tape. ernment has been completed.
Young as health and safety tsar, Lord Young said health and safety Weve talked about the best time
charged with finding a sensible new legislation was essential in some to be replacing our senior staff, proba-
approach to avoid overwhelming industries, but that it had become an bly at the end of the SDR in the
businesses with red tape. unnecessary burden on firms and autumn, defence secretary Liam Fox
Lord Young, who was the special public sector organisations. said.
adviser that helped Sir Keith Joseph I hope my review will reintroduce The strategic defence review will set
usher in privatisation in 1979, said an element of common sense and out the future role of the armed forces
he would inject common sense focus the regulation where it is most and may pave the way for cuts in
into rules that have become a mas- needed. We need a system that is pro- defence spending as the Conservative-
sive burden on businesses in recent portionate and not bureaucratic, he Liberal Democrat government moves
years. added. to rein in the budget deficit.
Young will also be asked to investi- According to the Forum of Private The changes at the top of the
gate the growth of Britains compen- Business, small and medium-sized Ministry of Defence are designed to
sation culture, which has led to a companies spend over 2bn-a-year to improve the militarys performance in
huge increase in so-called ambu- comply with existing guidelines. the Afghanistan war and to cut waste-
lance chaser law firms that target However, it is not clear how much ful spending.
employees involved in work-related power Cameron actually has to roll Fox would not rule out a cut in
accidents. back health and safety legislation, as troop numbers after the review, say-
David Cameron said: The rise of many of the laws are dictated by EU ing he had no preconceived view on
the compensation culture over the directives. the size and shape of the forces.
6 News CITYA.M. 14 JUNE 2010
L
IKE many MPs, I have received an So if the headline rate is to rise to or
ights, not at the festival. Welcome to BusinessFirst. Where avalanche of letters and emails near to 40 per cent for non-business
a little difference makes all the difference. Flying four from angry and perplexed con- assets, restoring a complicated regime
times a day, from Heathrow to Newark Liberty stituents since the rise in capital of allowances and reliefs to take
International Airport, our New York area hub. gains tax was floated. account of the effects of inflation and
For reservations and information, These do not come from the ranks length of time over which chargeable
go to continental.com. of the super wealthy or short-term assets have been owned sadly might
City speculators. Instead, my anxious prove an unavoidable compromise to
correspondents are predominantly part-protect the interests of the pru-
people who have done the right dent and the elderly, long-term
Lead Sponsor thing those who have worked to investor.
build up a business, employees who And whilst business secretary Vince
invested in their company, workers Cable assures us that the proposed
close to retirement who painstakingly higher rates of CGT are designed at
acquired small share portfolios or essentially private capital gains,
those who, having lost trust in pen- financial capital gains and second
sions, turned to property as a safe homes, he perhaps fails to appreciate
haven for their retirement fund. fully that many second home owners
In short, rather than representing a have sought to save in such an asset as
neat redistributive tax from rich to a consequence of widespread lack of
poor, the proposed rise in CGT risks trust in pensions and other financial
squeezing those caught in the middle products.
and stifling aspiration and self- Similarly, he seems not to have
reliance to boot. That is why I am taken into account the disproportion-
today backing the City A.M. CGT cam- ate impact higher rates on property
paign. will have on Londoners and those in
Capital gains have hitherto been the Home Counties. Many people who
taxed at a different rate from income buy a second home outside the capital
for good reason. They come from as an addition to a small London base
investments which inevitably involve do so not because they are enormous-
risk. Reduce the incentives to make ly wealthy but precisely because they
those investments and you will find are not. It is virtually impossible even
there are some unwelcome knock-on for many of those earning multiples
effects. of the average national wage to trade
First, strong and growing up the property ladder in the capital.
economies depend upon high levels of For those with growing families, the
investment. Higher levels of CGT will only option is often to buy a house
only serve to reduce the pool of sav- with garden outside London.
ings available for future capital invest- Above all, an increase in the rate of
ment. capital gains tax may generate neither
Second, capital is highly mobile. For fairness nor additional revenue.
that reason economic competitors of Mark Field MP
the UKs such as Australia, New Cities of London & Westminster
Zealand, Switzerland and the
Netherlands, have abolished CGT. CITY A.M.
They recognise that high capital gains
tax rates discourage investment.
CAMPAIGN
CITYA.M. 14 JUNE 2010 News 7
Zurich mulls
Cowdery set Irish move for
to pay 2.8bn UK life business
for AXA UK
INSURANCE
INSURANCE giant Zurich has taken
another stride towards making
Ireland its overreaching business hub,
Nicolas Moreau approaching the Financial Services
(left) runs the UK Authority with a view to moving the
division of Axa.
domicile of its UK life assurance busi-
Henri de Castries
is group chief ness over to Dublin.
INSURANCE end in anticipation of a busy week executive The move comes after Zurich last
BY OLIVER SHAH ahead. Resolutions deal team is Picture: GETTY year brought all its European general
being led by in-house experts Jon insurance businesses under a single
RESOLUTION, the insurance buyout Hack, a former Lazard banker, and Irish risk-carrying domicile.
vehicle, will ask the London market Elizabeth Gilbert, previously with The move is understood to be influ-
to suspend its shares this morning as Goldman Sachs. Citigroup is provid- CLIVE COWDERY looking for some time to realise value enced, at least in part, by the
it negotiates a 2.8bn takeover of ing some outside advice. AXA is being from its back book, a long tail of favourable tax regime in Ireland,
AXAs UK life and pensions business. advised by Credit Suisse. RESOLUTION legacy policies where contracts of where corporation tax is 10 per cent
The group, led by entrepreneur Once its shares are suspended insurance have been agreed but no rather than the UKs 28 per cent.
Clive Cowdery, will also give a brief Resolution will be freed to put the terms or policy have been issued to Zurich will continue to pay corpo-
update on talks with the French com- idea to its institutional investors. the customer. AXA has also been open ration tax in the UK, but dividends
pany. But a Rule 2.5 announcement Garnering their support will be cru- about its desire to plough capital into then paid to the Irish sub-holding
providing full details of the transac- cial as they will be tapped for up to higher-growth markets such as Asia. company will be taxed at the lower
tion is not expected until next week 2.8bn through a rights issue to fund A deal would ease pressure on rate. Longer-term, the firm could also
as technical discussion are likely to the deal. Resolution is understood to RESOLUTION chairman Clive Cowdery Cowdery, who already possesses a reap tax benefits if the move attracts
run on into the coming weekend. be in advanced talks with investment has been a busy man. 160m fortune from the sale of the more business through Ireland.
On Friday, Resolution confirmed its banks to orchestrate the cash call, As well as AXA, the insurance first incarnation of Resolution to Pearl Zurichs decision follows a number
plan to buy most of AXAs UK opera- although none has yet been hired. tycoon is known to have run the rule for 5bn in 2007. The 47-year-old of firms moving over to Ireland in
tions, including its protection, annu- The news will placate analysts who over the UK arms of Zurich, Aegon and aims to create value for shareholders protest at the UKs punishing regime,
ities and group pensions units, and have lost patience with Resolutions Legal & General in recent months. As by buying up life companies and including Shire Pharmaceuticals,
merge them with Friends Provident. quest to consolidate the insurance one market source puts it: Resolution knocking together their back office WPP and United Business Media.
The estimated combined embedded sector. Shares in Cowderys vehicle has been talking to everybody. functions, saving money. Zurich continues to explore ways
value (EV) of the businesses would be have fallen 32 per cent since the start He had an inkling AXA would be After AXA UK, Resolution needs to to streamline its legal structure and
5.5bn. Cowdery aims to create a of the year to 60.3p. more open than most to the idea of make at least one more big purchase optimise its capital efficiency and we
group with an EV of 10bn by 2011. AXA UK plans to focus on its 6bn divesting its British life and pensions before 2011 to meet the timeframe have made no decisions about how
After a month of talks, Resolution wealth management arm should the business. The French group has been promised to investors. this will be achieved within our life
and AXA took a break over the week- Resolution deal go through. businesses, the insurer said.
8 News CITYA.M. 14 JUNE 2010
in High Court
AVIATION
CONCILIATION services group Acas
has sent a proposal to British Airways
(BA) and Unite that could see an end
to the long running and crippling dis-
pute.
It is understood that the proposal
AVIATION Ioannous favour, it could see easyJet from Acas centres on travel perks for
BY EMMA SADOWSKI either forced to ditch its orange BA cabin crew, which were removed
branding or pay out hefty royalties. by the airline during the March strike
EASYJET founder Sir Stelios Haji- Outgoing chief executive Andy and remain as the focal point for the
Ioannou will come face to face with Harrison is also expected to take to disagreement.
the budget airline today in front of a the stand this week. He is being Acas chief conciliator Peter
High Court judge over an ongoing replaced by GMGs Carolyn McCall. Harwood said: The proposals we
branding dispute. This comes on the back of increas- have put forward must understand-
Haji-Ioannou, who is expected to ing tension between Haji-Ioannou ably remain confidential to enable
give evidence either tomorrow or and the easyJet board, which clashed the parties to reflect on them with-
Wednesday, is taking on the airline recently over plans to expand the air- out the glare of publicity.
he set up more than 15 years ago over lines fleet. Haji-Ioannou resigned Harwood confirmed that he was
a branding licence established when from the board last month and said expecting to meet with the two par-
easyJet floated in 2000. the airlines growth plans didnt ties early this week but said the tim-
The agreement saw easyJet keep 75 make sense. ing and location would be kept secret
per cent of revenues, which it saw as in a bid to avoid a similar incident to
core to being an airline, while ANALYSIS l Easyjet last month when the meeting was
easyGroup, which is owned by Haji- 500 p 418.00 stormed by a leftist political group.
11 Jun
Ioannou, would retain 25 per cent of 480 A spokesperson for BA said the air-
revenues which were made from line could confirm that it had been in
additional or non-core services. 460 contact with Acas but would not com-
Speedy boarding, baggage han- 440 ment beyond that.
dling fees and the sale of food 420
An agreement between the two
onboard are some of the services at will be met with much relief by BA as
the focus of the dispute, which 400 the airline is faced with the possibili-
easyJet says count as core to the air- 380 ty of another walkout in July.
lines business. The last 15-day strike is thought to
360
Should the courts rule in Haji- 15 Mar 6 Apr 26 Apr 17 May 7 Jun EasyJet founder Sir Stelios Haji-Ioannou resigned from the airlines board Picture: REX have cost BA over 150m.
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CITYA.M. 14 JUNE 2010 News 9
Mayor warns
The taxman is
expected to be
charged with col-
lecting more taxes
following next
weeks Budget.
in the capital
Business prefers Vat hike over NI rise
generates around 18 per cent of the
ECONOMY
UKs output and tax revenues.
BY EMMA SADOWSKI
The report also argues that invest-
INVESTMENT by the government into ment in infrastructure by the govern-
Londons infrastructure is crucial to ment is key to increasing productivity
maintaining the citys competitive- and output, while public capital
ness, according to Mayor Boris spending is lower in London as com- TAXATION KPMG head of national markets be far more significant as increases in
Johnson. pared to other global cities. Malcolm Edge said: To a certain Vat are either passed on to the con-
Ahead of the emergency Budget, Johnson said: The UK cannot MANUFACTURING and industrial extent its a wash-through for compa- sumer by putting end prices up, or
Johnson has urged chancellor George afford the cost to the economy if the bosses would overwhelmingly prefer nies operating in a predominantly absorbed by suppliers.
Osborne to avoid slashing spending capital is starved of vital investment a Vat rise to any other tax increase in business-to-business environment. KPMG called on the coalition gov-
in the capital on major projects like in infrastructure projects like the 22 June budget, according to However, for those operating in more ernment to help business by extend-
Crossrail and the tube maintenance. Crossrail and the upgrade of the accountant KPMG. business-to-consumer markets, it can ing corporate tax credits.
I want to remind the government Tube. A survey of 202 executives found 61
that growth is essential to the health He has written to Osborne ahead of per cent saw a Vat hike as the lesser of ANALYSIS l Tax rises- best and worst for business
of our public finances. Only by con- the 22 June budget and threatened several taxation evils, with a higher %
61%
tinuing to invest in London and the strikes by Tube Lines maintenance levy on national insurance viewed as 60 Best
South East the engine room of the workers, who are concerned over pay the least favourable outcome. A rise 50
national economy will the nation as and job security. in corporation tax was also deeply Worst
40 39%
a whole be able to grow its way out of unpopular with respondents.
trouble, said Johnson. London Mayor Boris Around 90 per cent of business 29%
30
His comments are part of a new Johnson is urging the leaders polled by KPMG came from 20%
report commissioned by GLA the manufacturing and industrial 20
government to avoid 15%
Economics, the Mayors financial sectors, while only 10 per cent came 9% 10% 8%
slashing infrastructure 10 7%
analysis arm, which found that from the retail and financial services 2%
London receives 14 per cent of spend- spending. sectors which would be more vulnera- 0
A rise in NIC A rise in VAT A rise in income A rise in More green taxes
ing by the government, while the city ble to the effects of a Vat hike. tax corporation tax targeting polluters
The Capitalist
10 CITYA.M. 14 JUNE 2010
EDITED BY
VICTORIA BATES
GOT A STORY? EMAIL
thecapitalist@cityam.com
Ex-Shell president John Hofmeister has had some words of wisdom for BP Picture: REUTERS
BOOK KEEPING
A second chance popped up on
Friday to hear outgoing M&S boss Sir
Stuart Roses selection on Desert
Island Discs, for those who missed it
last year. In case the dapper chap
needs to supplement last years
4.3m pay bonanza in retirement,
the programme throws up one idea
Tim Devilfish Barber in action apparently, Rose keeps a confidential
nutters file of all the crazy and
Victoria Casino, paying a 25 entry funny letters he receives, and hes
fee to Marie Curie Cancer Care. not ruled out publishing a book of
Whittled down to the final table, them one day. Should bring in a few
who should take the honours but City bob, I suppose.
A.M.s features writer and poker
dark horse Tim Barber. A fine effort!
SLIMMERS WORLD
Speaking of congratulations, I hear
theyre also in order for banking
grandee and Yell Group chairman
Bob Wigley, whos been looking
FINANCIAL SERVICES
BY HARRY BANKS hand over a total of 4,450 UBS client processed, Swiss paper Sonntag
accounts to US authorities. reported.
SWISS authorities are understood to UBS, the worlds second-largest Client dossiers were transferred to
have already handed over 500 wealth manager, has already handed the United States in around 500 of
accounts of UBS clients to the United the accounts to Swiss tax authorities the 2,900 cases, the paper cited the
States under an agreement to end a but the political deadlock threatens Swiss tax office spokesman Thomas
tax dispute that has threatened the to stop Switzerland handing them on Brueckner as saying.
banks existence. to the US by the August deadline. These 500 clients had signed
The Swiss lower house rejected the Missing this deadline could lead to waivers allowing their accounts to be
agreement on Tuesday, triggering a the US restarting legal action. handed over to the US taxman volun-
new parliamentary debate next week Around 2,900 files had already tarily. UBS and the Swiss federal tax
and delaying a final decision on been prepared for handover and office did not comment.
Smile.
Flights from EC President Jose Manual Barroso is urging fiscal consolidation Picture: REUTERS
ECONOMY
BY HARRY BANKS bility culture in Europe, EC President
Jose Manuel Barroso said after meet-
EUROPEAN Union leaders will make a ing German Chancellor Angela
London Gatwick to: fares from new attempt this week to convince Merkel on Friday.
financial markets they can contain a There is new awareness in Europe
Nantes 39.99 debt crisis by agreeing how to tighten
economic policy coordination and
that rules have not been respected
and must now be respected.
strengthen budget discipline. Circumventing the rules... is putting
Aberdeen 38.99 The 27 EU member states and the at risk our collective economic future.
executive European Commission will We need to move in the opposite
Belfast City 25.99 also set out plans for boosting eco- direction. We need to strengthen our
nomic growth and creating jobs at a rules and the way the EU runs.
Dsseldorf 26.99 summit on Thursday, three days after
the leaders of Germany and France
Failure to show solidarity could
increase the nervousness on markets
discuss strategy in Berlin. that has helped drive down the euro
Guernsey 32.99 A show of EU unity would help per- and shares globally, and increased
suade markets the bloc has a com- worries that countries such as Spain
Inverness 34.99 mon response to the worst crisis to and Portugal could follow Greece into
hit the 16-country eurozone since the debt payment trouble.
Isle of Man 35.99 single currency was created 11 years
ago, and can prevent Greeces debt
Agreement on an aid package for
Greece worth 110bn (91.6bn) and a
problems spreading to other states. safety net for other eurozone coun-
Jersey 34.99 Our priority is putting order into tries worth 500bn has gone some
our public finances. We need fiscal way to calming investors worries.
Leeds Bradford 29.99
Q&A: EUROZONE WOES EXPLAINED
Limoges
Newquay
59.99
29.99 Q. WHAT ARE THE PROBLEMS
FACING THE EUROZONE?
gesting, among other
things, suspending
Q&A
Newcastle 31.99 A. Markets main concern is the
heavy indebtedness of periphery
countries such as Portugal, Italy,
repeat offenders EU vot-
ing rights and an insolvency proce-
dure for states.
Ireland Greece and Spain. Greece is
seen as the most endangered as it is
running a budget deficit of 13.6 per Q. WHAT ARE MARKETS GRIPES
WITH POLITICIANS?
cent of GDP, more than four times
the EU limit. A. Markets believe the EU has con-
sistently been behind the curve
BOOK NOW!
in dealing with member states fiscal
Joint effort
Mid-market
HOW THE CITYS STRESS LEVELS LOOK
ANALYSIS l Firms with significant or critical problems
1500
1,901
1,529 1,518
1,616
1,750
1,278
banking access
upturn strain
FINANCIAL SERVICES
1,104 1,060
1000 BANKS must work together with poli-
cymakers, technology providers and
non-governmental organisations
500 (NGOs) to improve global access to
financial services and boost economic
growth in the wake of the financial
On Friday, the Department for 0 crisis, a new report has found.
Transport put on ice 1.6bn of Jan Feb Mar Apr May According to the Banking for
schemes not already under contract Key: Billions report, launched today by
in one of the first austerity measures ANALYSIS l London-wide firms in distress by sector Automotive Barclays and the Economist
for to have a direct impact on Londons in May Intelligence Unit, 2.5bn people across
Construction
private sector. A further 6.2bn of the globe still do not use formal or
spending cuts are due this year. I.T. semi-formal financial services,
BY OLIVER SHAH Levels of corporate stress also rose Engineering Barclays said policy and regulation
in the City, our figures show. Nearly need to be revamped in order to
MIDDLE market lawyers and consult- 1,280 companies battled to finance Print & Packaging improve the fortunes of microfinance
ants are struggling to tap into the themselves in May, up 20 per cent on Manufacturing institutions, which have suffered over
nascent economic recovery, accord- the previous month. Financial servic- the crisis from a lack of access to
ing to the second monthly City es and IT firms were among the worst Financial Services investor capital. The bank believes
%
A.M./Begbies Traynor health monitor affected. Property Services technological advances could be
for the Square Mile. According to Begbies Traynor, the wielded effectively to widen access to
While bigger players are benefiting insolvency specialist, a third of the Hire/rental Services banking services in impoverished
from the return of property develop- companies picked up by our survey Recruitment areas. One billion of the worlds popu-
ment and corporate activity, our could fail within the next year as the lation currently own a mobile phone
Advertising
numbers show smaller operations are recovery strains their already-deplet- but do not have a bank account.
fighting to survive as clients demand ed capital resources. Professional services Deanna Oppenheimer, chief execu-
more work for lower fees. Nick Hood of Begbies Traynor said: Other B2B services
tive of Barclays UK retail bank, said:
Nearly 1,070 property services out- Despite encouraging talk of Mobile telephony, smart cards and
fits across Greater London suffered increased levels of recruitment activi- Retail electronic transfers will present a life-
severe problems in May, up a third on ty in the City, there are still many Wholesale line to the unbanked. The challenge
the previous month, while more than potential losers struggling to cope. for regulators will be to reshape legis-
1,800 assorted business services There will be many casualties as we Transport lation in ways that protect the cus-
groups showed signs of serious dis- move into the traditional post-reces- tomer, but do not hamper the
Others
tress, up 57 per cent. sionary insolvency surge. development of innovation.
14 News
Apollo weighs
higher Brit bid
RETAIL
BY OLIVER SHAH over the weekend as metropolitan Richard Dickinson, chief executive
consumers spent cash on clothes and of the New West End Company, said:
TWO strong bank holidays helped goods. This gives a much-needed boost to
push up West End retail sales 5.8 per The months trading numbers con- retailers in Londons West End, with
cent year-on-year in May, according to trast with those seen across the rest consumer confidence wobbling in
the New West End Company, which of the country, where growth ticked the face of the potential onset of a Vat
represents vendors in the area. up a meagre 0.8 per cent on average. rise. With the additional blow of a
Europe, China and the Middle East. Despite a rainy Saturday, shoppers According to a survey by research weakening euro, the West End needs
RETAIL
Clothing and footwear received a spent 38m on Bond Street, Oxford group GfK a fortnight ago, consumer to continue to improve via increased
BY JOHN DUNNE boost from the improved weather Street and Regent Street on Monday confidence fell to a five-month low in investment in new stores and in the
SALES in London bounced back last while food also saw an increase. 31 May alone. The number of people May as families worried about the public realm.
month as flights returned to normal Helen Dickinson, head of retail at
after the volcanic ash cloud that left KPMG, said: Londons retail sales
thousands of tourists stranded. bounced back in May as the weather
Figures from the British Retail picked up and tourist numbers were
Consortium showed sales soaring by strong.
11.6 per cent in May compared to the May 2009 was one of the weakest
same month last year. months of last year, further boosting
That compared with a meagre 0.8 the year-on-year comparisons. The
per cent increase across the UK. election campaign does not appear to
Over the period from March to May have dented spending patterns in the
London sales figures shot up by 8.8 capital but, as many London retailers
per cent compared with 1.2 per cent are already reliant on promotional
in the UK. activity to drive footfall and sales, we
Sterlings weakness continued to
attract overseas visitors, especially
from those arriving from western
will have to wait and see if the forth-
coming budget will alter the current
trend of outperforming the UK.
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16 News CITYA.M. 14 JUNE 2010
PROPERTY Qatari vehicles have lately outshined expand by 18.5 per cent this year, on
their counterparts from the region the back of increased gas and oil
QATAR will overtake sluggish and are projected to carry on with exports. It has enjoyed average eco-
European funds to become the their rapid expansion across the real nomic growth of 17.4 per cent over
largest real estate investor in the estate world the report said. the last five years.
world this year, according to a report Qatar Holding, the investment arm Qatars prominence in the proper-
by property consultancy Jones Lang of the Qatari state, bought Harrods ty market is aided by a slowdown in
LaSalle out yesterday. last month for 1.5bn and owns a real estate activity from German
The country has emerged as a glob- large stake in Canary Wharf property funds, which were among the largest
al powerhouse in property, and will firm Songbird. The report predicts global investors in 2009.
become the top source of overseas high profile purchases across Latin Qatar is the epitome of energy-
Dubai International Capital co-founder Sameer al Ansari Picture: PA capital in 2010, says the report. America, Eastern Europe and Asia. rich Gulf nations, with a large
Cash-rich and with a strong The International Monetary Fund appetite for real estate, the report
Dubai private
appetite for splashy overseas assets, expects the Qatari economy to said.
TELECOMS
the Communications Workers Union be asked to vote by post on a possible
BT plans to use hundreds of middle (CWU) broke down last week. strike, with the CWU due to
managers to fill frontline positions in The union rejected BTs final offer announce the results on 5 July.
is dissolved
call centres and engineering roles in of a 5.1 per cent pay rise over 21 A spokesperson for the telecoms
the event of a strike, sources say. months, arguing the deal treated group said: BT hopes that industrial
The telecoms group is put- employees with contempt. action can be avoided and that CWU
ting together contin- It has also been reported members see that a 5.1 per cent pay
gency plans for the that BT could go to rise, plus bonuses, over the next 21
first strike court in an months is a fair offer and higher than
a t attempt many out there in the market.
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CITYA.M. 14 JUNE 2010 News 17
R
ISING regulation and economic The question is: what will be the have been fired and that the quiver is including metals and mining, agriculture,
austerity could produce a toxic DETAILED STRESS TEST RESULTS catalyst? The bankers could be right; now desperately empty. renewable energy and clean technology
mix in 2011. That was the view The obvious antidote to this situation it could be the impact of regulation. Guy Johnson co-anchors European and technology, telecoms and media.
of many of the bankers that I is the publishing of the results of However, this seems unlikely. The Closing Bell weekdays on CNBC. Liberum Capital acted as broker to the
spoke to last week at the detailed stress tests that are in the more obvious spark is the default of http://europe.cnbc.com placing.
International Institute of Finance final stages of being conducted by the
spring meeting in Vienna. Crucially, ECB.
though, they were more concerned The problem is that the regions
about the prospect of a regulatory finance ministers, as the Austrian
recession than one induced by gov- finance minister made clear to me,
ernments taking the axe to spending. simply wont publish the findings at
an individual level. They are quite
RISKS FROM BASEL III happy to give us a general top down
The Institutes chairman, Joseph picture but not a detailed bottom up
Ackerman, indicated that he thinks view.
that if Basel III is implemented in its The question has to be: what are
current form then GDP estimates will they afraid of? Surely by now they
need to be slashed and job queues must understand that if they are not
will be dramatically extended. Now transparent the market will simply
there could be some truth to this. assume the worst even if Moodys
After all Europe does rely on its banks says there is no problem.
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18 Economic News CITYA.M. 14 JUNE 2010
stay stubbornly high Signs that high CPI and RPI figures are lifting
inflation expectations are bound to worry the MPC. The
MPC takes the inflation target seriously and it cannot
cent last month. The retail prices these forecasts would rise further. stand by if it loses credibility. So far, longer-term inflation
UK ECONOMY
BY JESSICA MEAD index (RPI) is only expected to moder- More concerning is the Bank of expectations remain fairly stable, combined with early fis-
ate slightly from its 19-year high of 5.3 Englands own quarterly survey of
INFLATION data out this week is likely per cent. Inflation has remained inflation expectations, which cal tightening will keep the MPC on hold for now.
to cause a further headache for the above the three per cent upper thresh- revealed on Friday that the public
Bank of Englands Monetary Policy old for all of 2010. expects inflation to be 3.3 per cent
Committee (MPC) after data on Friday The MPC has maintained that fac- this time next year compared with 2.5
showed the publics expectations of tors behind the spike, such as the per cent in the first quarter. This sug- ALAN CLARKE | BNP PARIBAS
long-term inflation had shot up depreciation in sterling and the VAT gests that the Banks inflation-fight-
sharply. hike in January, were only temporary. ing credibility is starting to wane.
The MPC has long argued it would But some economists are increasingly But with an aggressive emergency Several members of the MPC have voiced con-
look through what it sees as a tempo- disbelieving. Barclays Capitals Simon Budget scheduled for 22 June, the
rary spike in inflation. But, on aver- Hayes said: Our expectation is that Bank will face a tough choice over the cerns that the current elevated level of inflation could
age, economists forecast that annual
consumer price inflation will ease
inflation will continue to surprise the
MPC on the upside. If the government
next few months between sticking to
its inflation-fighting mandate and
threaten expectations and these concerns will have been
slightly to a still-high 3.4 per cent after were to announce a rise in VAT in the keeping policy loose to stave off a dou- validated to some extent by these data. It was an
hitting an 17-month high of 3.7 per emergency Budget, as many expect, ble-dip recession. uncomfortable reading but it is flashing amber rather
ANALYSIS l Surveys of Inflation Expectations Among the General Public, 2005-10 Source: Citigroup than a red alert at this stage.
5
%
4.5
4
SIMON HAYES | BARCLAYS CAPITAL
3.5
3
2.5 High headline rates of inflation need not be a
2 2.0% problem if they are understood to be temporary, and the
1.5 Target MPC has been at pains to highlight the temporary fac-
BoE/NOP Survey Of Inflation Expectations for Year Ahead (Quarterly)
1
YouGov/Citi Survey Of Inflation Expectations for Year Ahead (Monthly) tors at play. However, if high rates of inflation lead to a
0.5 YouGov/Citi Survey Of Inflation Expectations for Long Term (Monthly) rise in inflation expectations this may instill further per-
0
2005 2006 2007 2008 2009 2010 sistence into the inflation rate.
CITYA.M. 14 JUNE 2010 News 19
LEISURE
to have grown by about 10 per cent a join Club Meds board and if its Club
BY HARRY BANKS year and Club Med is hoping to attract Med holding went beyond nine per
CHINAS largest non-state holding, 200,000 Chinese customers by 2015. cent, Fosun would appoint a second and precious metals sector, where it
MINING
Fosun, has acquired 7.1 per cent of hol- Club Med said it aimed to open five representative. Fosun will not only hopes to start making acquisitions in
iday resort group Club Med, the first villages in China by then and would support Club Meds global strategy of GOLD Mining Company (GMC), a ven- the coming months.
time a quoted Chinese group takes a inaugurate its first village this winter upscale positioning and sharing ture set up to invest in the precious It plans to target projects along all
direct holding in a high-profile listed in Yabuli, the largest ski resort in Chinas growth opportunities but also metals sector, will today make its stages of the development process,
French company. north-east China. As part of the deal, use this opportunity to benchmark debut on the Plus stock market, hav- from exploration to production.
Club Med hopes to make China its Fosun pledged not to lift its stake itself with international brands and ing raised 820,000m in cash via a Executive director Greg Kuenzel said
second-biggest market in the next five beyond 10 per cent if it reached that standards in order to improve its abili- placing of 37m new shares. that gold would be the firms main
years while Fosun is keen to invest in level, at least during the following 24 ty to consolidate resources and man- GMC said its listing would provide focus, though it will also consider
Club Med, whose all-in one resorts months, subject to no other sharehold- age its investment said Fosun the company with better opportuni- opportunities in other precious metals
appeal to well-heeled Chinese. The er wanting more than 10 per cent. chairman Guo Guangchang. ties for exposure to the robust gold such as silver, copper and platinum.
Supermarket
Tesco boss Sir Terry
Leahy last week
announced he will
be retiring from
the supermarket
after 14 years at
showdown as
the helm.
Picture: REX
rivals report
The group was hit by the news that
RETAIL
chief executive Sir Terry Leahy, who
Securities and has also worked at BestInvest Livesey was called to the Bar in 1969
Bupa Deutsche Bank and Investec. Prior to Peter Hall has now officially taken up and took silk in 1990. He has experience
The healthcare provider has appointed Rita taking a job in the City, he worked in the reins as chief executive of the finan- in commercial litigation, construction
Clifton to its board as a non-executive director, academic research at the University of cial advisory firm, replacing John and insurance, and specialises particu-
effective from July. Exeter. Spiers, who founded the group in 1986. larly in the professional liability of
Clifton is also a director at DSG International Hall joined from UBS, where he has lawyers, accountants and valuers. He is
and chairman of brand consultancy Interbrand. Norton Rose been managing director of the wealth also a deputy High Court judge in the
She began her career in advertising at The law firm has hired Michael Yu to its management regional and investment Chancery and Queens Bench divisions.
DMB&B and J Walter Thompson, before joining Beijing office as a partner in the corpo- division for the past four years.
Saatchi and Saatchi in 1986, where she became rate team. IPA
vice-chairman and executive planning director. Yu has a wealth of corporate experi- Hailsham Chambers The Insolvency Practitioners Association
ence, having worked on a number of Bernard Livesey QC has joined the civil appointed Carl Faulds as its new presi-
Execution Noble as an analyst covering the support serv- M&A deals, IPOs, private placements and commercial chambers from Four dent at its annual meeting last week.
The investment banking group has hired ices sector. and restructurings. He joins from Global New Square, where he has been a ten- Faulds is currently managing director
David Brockton to its UK mid cap team Brockton joins from Arbuthnot Law Office, where he was a partner. ant for the past 18 years. of Portland Business Recovery.
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
BOB WIGLEY IS READY. ARE YOU?
Bob Wigley, Chair of Yell Group
Bob Wigley is ready to judge entries to the inaugural CITY A.M. Awards
the new financial business awards from the UKs leading, free,
business daily. And, like CITY A.M. itself, all entries are free to
companies, teams and individuals working in the financial
business. Entry is online and there are 15 company awards
recognising corporate excellence and 6 awards that celebrate
the individual or team stars of the financial community.
Start thinking about your entries and nominations now.
The deadline for entries is 22 July 2010
For full details and helpful contact points please visit the
Awards website: www.CityAMAwards.com
And save this date for your diary: Thursday 28 October 2010
at Grange St Paul's Hotel, London EC4 for the Awards Dinner.
headline sponsor
in association with
CITYA.M. 14 JUNE 2010 WORDS BY ROGER BAIRD Interview 21
Centrica looks
investment environment for long-
term investors.
The task facing the UK energy
industry is nevertheless daunting. It
will have to find 200bn over the next
decade to upgrade its nuclear, wind,
hard at its
gas and clean coal power stations
and make sure 15 per cent of all of this
energy comes from renewables as EU
guidelines specify.
Centrica itself plans to spend 15bn
over this period. Luff is confident the
nuclear option
business can find this cash, pointing
out the firm produces 1.5bn of cash-
flow every year (he does not rule out a
cash call if extra investment is need-
ed). The last time the company went to
its investors was in 2008, when it
raised 2.1bn to buy British Energy
and North Sea gas producer Venture
The firm will spend the billions it earns from UK Production for 1.3bn.
Last month the business put out a
households on atomic, green and US expansion strong trading statement: it added
200,000 new customers, so it now
serves 15.9m residential consumers.
Analysts expect its 2010 full-year oper-
C
ENTRICAS finance director designed enhanced pressurised reac- ating profit to hit 2.1bn, compared to
Nick Luff is busy trying to work tors at Hinckley Point and then two 1.9bn last year.
out if the new coalition energy more at Sizewell at around 4bn each, Luff is also keen to provide cash for
secretary Chris Huhne is a man with the first one ready by 2017 at the the business to grow in North
the countrys largest gas and electrici- earliest. America, where it trades as Direct
ty supplier can do business with. After Huhnes u-turn Luff, 42, Energy. The firm operates three power
Huhne a Liberal Democrat had thinks he can work with the Lib Dem stations in Texas, and a couple of gas
previously described nuclear power as politician even if he recognises that Luff is impressed by the speed at which the coalition has given its view on nuclear policy fields in Alberta, Canada. And just last
a failed technology. But that was he will not have an enthusiastic sup- week it bought Florida-based energy
before he scented the beautful aroma porter of nuclear power at the heart of ed about that. A nuclear building pro- this fragile post financial crisis envi- services firm Clockwork Home
of power: now firmly ensconced in the government. He says: Everyone will gramme could have fallen by the way- ronment. Services for $183m (125m) in cash to
cabinet, Huhne last month said that have to think about the countrys side, given the problems the budget He says Centrica was able to finance further boost its position in the US
he now backed the governments poli- security of supply in the future. It is deficit. But instead they have given us the 400m Lynn and Inner Dowsing market.
cy of building 10 new nuclear power pretty obvious that nuclear has got to their view early on. wind farm project (located off the Luff says Centrica is looking at
stations over the next 20 years, as long be part of that. The government as a However, Huhne may have set an Lincolnshire coast) that started in investment options in gas storage, gas
as no public subsidy is used. whole has been supportive. unrealistically high bar for nuclear 2008 and spanned the financial crisis. exploration, wind power, in the US as
This matters to Centrica, which However, Luff _ wiry and thought- builders by saying no public subsidy And Luff is confident he and EDF can well as nuclear development. He is
runs British Gas, because it owns a 20 ful man is impressed with the speed must be used to build them. This has raise ten times that amount for keen to stress the firm does not have
per cent stake in British Energy with which the coalition has moved not happened anywhere in the world nuclear expansion. all its eggs in one atomic basket
(which it bought for 12.5bn two years on this issue. Sitting in Centricas for many years. Nevertheless, Luff He says: The appetite is there. But undoubtedly a prudent move, regard-
ago along with French rival EDF). The London offices just behind Savile Row thinks it will be possible to raise all strong companies like us have to raise less of the coalitions current thinking
two firms propose to erect two French- in the West End, he says: I am delight- the cash in the private sector, even in it, and government has to set a stable on the subject.
Free Seminar
on investing
in South Africa
Join FT columnist David Stevenson for a
comprehensive review of both the short and longer
term opportunities in South Africa and the wider
emerging markets. Rafaelle Lennox from RBS
will also explore how to take advantage of these
opportunities with RBS Listed Products.
Date: 16 June
Time: 5.30pm - 7.00pm
Location: 250 Bishopsgate, London
The Royal Bank of Scotland plc (RBS) does not endorse any of the reports and other written materials provided by David Stevenson (the Materials) or any statements made by David Stevenson or Investors Intelligence (the Statements). RBS makes no warranty or representation
whatsoever, express or implied, as to the contents of the Materials or Statements. RBS shall not be liable (whether in negligence or otherwise) to any person for any error in the Materials or Statements and RBS shall not be under any obligation to advise any person of any error
therein. The views expressed in the Materials or Statements represent the opinions of David Stevenson and not RBS. By attending an event, you acknowledge and agree that RBS does not review or endorse and shall not be liable directly or indirectly, for the content of such
Materials or Statements or the use that others make of these Materials or Statements, nor for any damage, loss or offence caused or alleged to be caused by, or in connection with, the use of or reliance on any such Materials or Statements at such event. The Royal Bank of Scotland
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22 News CITYA.M. 14 JUNE 2010
T
HIS week, in a speech to leading such as Canada, China, India and tax for a long time. Osborne knows Closer European cooperation and thing is certain; this is a matter for our
figures from across the financial Brazil did not have to bail out their this and, whilst he may have picked up integration is entirely appropriate in own national government to decide.
services industry at Mansion banks and thus, understandably, see political points by publicly declaring many areas it is very much in our Stuart Fraser is the Policy Chairman at
House, George Osborne will out- no reason why they ought to intro- the government will introduce a levy interests to maximise the business the City of London Corporation.
South Korea unveils
currency controls
) ! "%! '%!&#"%' &"('"!& ! WORLD ECONOMY rency and cooling overseas borrow- equity capital. The cap for foreign
', " "!"! "% ")% & ! '
BY HARRY BANKS ing. The restrictions slap limits on bank branches was set at 250 per
%' #% ! "(% &'%"! ! " '' ' SOUTH Korea yesterday unveiled
banks and other financial institu-
tions currency forwards, cross-cur-
cent of equity to account for lower
capital, which on average is just 1/30
long-anticipated currency controls, rency swaps as well as of that held by domestic banks.
" ! "! (& "!
saying it aimed to curb the rapid
shifts in capital flows linked to
non-deliverable currency forwards.
These measures are aimed at
Officials brushed off suggestions
the regulations, which follow liquid-
short-term foreign debt and posed a reducing the volatility in capital ity controls and curbs on compa-
54 420
6
52 400
50 380
48 360 5
15 Mar 6 Apr 26 Apr 14 May 3 Jun 15 Mar 6 Apr 26 Apr 17 May 7 Jun 15 Mar 2 Apr 22 Apr 12 May 1 Jun
Bosses taking a
Companies in tougher line on
pensions cull late workers
as crisis bites
ECONOMY
EMPLOYERS are taking a tougher line
with staff because of the recession,
with one in six prepared to sack some-
body for being late just two or three
times, a new survey has revealed.
Twelve per cent of business leaders
PENSIONS employees are not saving enough for in the UK said they would show the
BY JOHN DUNNE retirement while 60 per cent think door to a worker who was late four or
that their employees will not be able five times with 39 per cent reporting
MORE than nine out of ten employers to retire when they wish due to insuf- they are now paying more attention
are planning to scrap or scale back ficient savings. to what time workers arrive than they
their defined benefit pension Marc Hommel, pensions partner at had before the downturn.
schemes, a survey has revealed. PricewaterhouseCoopers said: The study, on behalf of online jobs
As companies fight for survival fol- Employers are sounding a repetitive site CareerBuilder.co.uk, included
lowing the global economic crisis death knell for defined benefit pen- more than 100 UK business leaders.
pensions are being sacrificed. sions. The size and volatility of fund- While employers would prefer
In the poll of 179 major employers, ing costs, and also concerns about the workers to clock in at their designat-
including 34 with more than 10,000 inequality of pensions provision with- ed start time, many said they were
employees, and 38 of the FTSE 100 in an employers workforce, are accel- willing to give workers with some
only six per cent said they would erating their demise. flexibility.
retain defined benefits pension Companies recognise the value to Forty-six per cent of UK employers
schemes in their current form. their businesses and people of provid- said they didnt care if their employ-
The number of companies that ing workplace pensions but not at the ees are running late as long as their
have shut defined benefit schemes to risk of jeopardising the business as a work is completed on time with good
existing employees has more than whole. quality. However, some reported that
doubled since last year from 14 per they had been given lame excuses
cent to 32 per cent, according to the FAST FACTS | PENSION SURVEY including one who claimed their cat
research by business advisers had got caught in its flap.
PricewaterhouseCoopers. Only six per cent of companies polled said Tony Roy, managing director for
Meanwhile a further 30 per cent of they would retain their defined pension CareerBuilder UK, said: Getting
employers intend to close defined schemes in their current form. organised and preparing for the
benefit schemes to existing staff 87 per cent of employers do not think their upcoming day the night before can
The survey also showed that 87 per staff are saving enough for their retirement. help to improve punctuality and
cent of employers believe that Marc Hommel, pensions partner at PricewaterhouseCoopers make the commute less hectic.
Investment
24 CITYA.M. 14 JUNE 2010
| Spread Betting
Be discerning
about Europes
banking sector
There are some bargains to be had, but do
the analysis rst, writes Kathleen Brooks
T
HE last two years have been cata- Another reason for the ECBs lending,
clysmic for the global banking sec- according to UBS analysts, is that
tor. Yet most banks managed to stay European banks have not raised enough
afloat during the financial crisis equity to absorb the losses experienced
and have returned to profitability this during the recession. Since the regulators
year. And after the wave of volatility that are likely to ramp up capital demands for
hit the markets in recent weeks, banking the banks, investors should look for those
stocks are beginning to look cheap. banks with the best capital ratios.
But should investors be buying up banks Analysis by S&P Equity Research has
with low price-to-earnings (PE) ratios in an found that strong profits in the first quar-
attempt to bag a bargain? Most analysts ter of this year provided a boost to Swiss
would say no. Although the financial sec- banks Credit Suisses and UBSs Tier One
tor is in better shape now than in capital ratios, which is the key measure of
September 2008, more stringent regula- a banks financial health. For example,
tion and higher levels of taxation are the UBSs core Tier One capital ratio rose from
newest clouds gathering on the horizon. 15.4 per cent in the fourth quarter of 2009 Differentiating French investment bank, is also an attrac- The readjustment in the European
Yet one can make money in the sector to 16 per cent in the first quarter of 2010. between Europes tive buy because of its diversified business banking sector is far from complete, but
and spread betters need to have a discern- However, according to S&P Equity banks is key model, which includes an international for investors with a medium-term time
ing eye when it comes to trading the Research, Deutsche Bank actually saw its retail bank. Also, at current prices, Societe horizon now is a good time to get in early
banks. Analysts at UBS favour banks based core Tier 1 Capital ratio fall to 7.9 per cent Picture: GETTY Generale looks good value and has a PE and gain exposure to the best positioned
in economies that largely dealt with the in the first quarter of 2010, from 8.7 per ratio of just over 10. European banks.
financial crisis during 2008-2009 for cent in the last quarter of 2009, due to its
example the UK and the US and it has a
buy recommendation on Lloyds Banking
acquisition of wealth manager Sal
Oppenheim, as well as a change in regula-
IN FOCUS | SANTANDER
Group, HSBC and Barclays. Compared to tory reporting standards. But S&P Equity
the US and the UK, European banks are Research notes that even without the When Standard and Poors, the ratings Spain in late May. Bank of America in 2003 for $2.5bn.
still reliant on the Europeam Central Bank acquisition, Deutsches capital ratio would
(ECB) for funding. Whereas US banks still have seen a slight decrease. This sug- agency, first downgraded Spanish debt Its Madrid-listed shares recovered to S&P Equity Research reiterated its
usage of the Federal Reserve to borrow gests there will be increasing pressure on in April, many analysts expected Banco close on Friday at 8.73, after its chair- strong buy rating last week on the back
funds has shrunk from $700bn at the peak the bank to improve its capital base. Santander to sail through the turbu- man Emilio Botin said that profit this of the deal. Investors have been skittish
of the crisis to less than $100bn earlier this Instead, S&P Equity Analysts have a
year, the ECB has had to ramp up their strong buy recommendation for Banco lence. At the time, analysts at both S&P year would be similar to that of 2009 but the banks bottom line is relatively
lending to banks within the Eurozone; in Santander (see In Focus box). It argues that Equity Research and RBS recommended the group reported pre-tax profits of insulated from Spanish troubles only
May it lent $800bn, close to what it was Satander is particularly cost efficient and buying the stock. Santander, which 13.48bn last year. In its first-quarter, 25 per cent of its operating profit comes
lending in October 2008 when Lehman has a low cost-to-income ratio compared to
Brothers failed. other European banks. It is also attracted
owns Abbey, Bradford & Bingley and net income jumped 5.7 per cent to from Spain. Since the start of 2010, its
The question now is how well Europes to its favourable geographic mix: Latin Alliance & Leicester saw its share 2.21bn. It also announced last week price-to-earnings ratio has fallen to 7.65
banks would perform if the ECB was to America has overtaken continental Europe price fall sharply as the bad news con- that it planned to buy back a large stake times from 11.31 times.
remove its funding, thereby forcing banks as the groups main revenue provider. tinued with another downgrade for of its business in Mexico, which it sold to Juliet Samuel
to raise cash in the private markets. UBS argues that Societe Generale, the
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CITYA.M. 14 JUNE 2010 THE WILD SIDE 25
OF MALAYSIA
SEE TRAVEL ON
PAGE 28-29
F
OOTBALL results might be capturing dence than its rivals. Cantor Index is offer-
everybodys attention at the moment ing 398.64p 400.11p.
but there are some key financial scores One retailer that ought to benefit from
out this week. Following positive full- the World Cup is Sports Direct. England is
year results in March, grocer J Sainsbury is expecting plenty from its national team and
expected to announce first quarter profits the further the team go in the tournament,
this week. Will its management confirm the more shirts and balls Sports Direct are
Q.
Dear Josh, what are the markets Morrisons news that a slowdown in the mar- likely to sell. Capital Spreads quotes 94.3p-
expected to be like during the ket has begun? With the firms recent 95.2p.
World Cup? increased expansion investment, combined Property company Land Securities has
with a wavering consumer, a weak statement just bounced off its top side resistance and
A.
If you were thinking that traders are from the supermarket chain would not be sur- with fears about tax implications emanating
likely to be keeping a close eye on prising. Cantor Index offers a spread of from the emergency Budget later this
the World Cup and that this could 328.28p-324.54p. month, traders should be looking for a
affect volumes, then you are right. Last week saw Sir Terry Leahy announce retracement to 550p lows. WorldSpreads is
Historically, the financial markets have tend- his departure from rival supermarket chain offering 609.75p -610.75p.
ed to be particularly quiet during any major Tesco. Analysts are expecting him to go out The rise of the mobile computing move-
sporting event. with an optimistic outlook for the company. ment should benefit companies such as
With the sovereign debt crisis still having The expansion of overseas business, ARM Holdings. While Intel and nVidia
a strong and volatile influence on the finan- including the announcement they will be dominate the PC markets, these industry
cial markets, this could deter even more Traders may be taking the market determined by you. But a guaran- opening 80 new centres in China, has seen bellwethers still trail their smaller counter-
traders this summer. But this could be dan- their eyes off the ball teed stop loss means that, regardless of Tesco become an international household parts in performance and energy efficiency
gerous low volumes can make the markets moves in the underlying price, your order will name. This should mean that its earnings on mobile platforms. Spreadex quotes
even more volatile. So, if you are spread bet- Picture: be closed out at the level requested, even if are less affected by UK consumer confi- 288.30p-290.20p.
ting during this period you will need to think REUTERS the market gaps. But be aware that guaran-
about risk management. teed orders do carry a small extra charge.
That said, this World Cup could be slightly
different since it is taking place at a time
A.
cent. This could well keep traders interested, Lots, is the answer. Today we have
particularly if they feel that there are bar- some EU industrial production fig-
gains to be had. ures, economic forecasts from the
25-26 JUNE 2010
And lets not forget the emergency Budget UK Office for Budget Responsibility and the
due out next week which will grab the atten- Bank of Englands Quarterly Bulletin. Cavendish Conference Centre West End
tion of the market. Tomorrow, traders will be keeping an eye out 22 Duchess Mews, London, England W1G 9DT
for UK inflation data, German economic sen-
Q.
Dear Josh, BPs shares are very timent and the US Empire manufacturing Join TradeStation for a special two-day futures trading
volatile. How can I protect myself survey.
if I am trading the stock? We also have UK unemployment and US symposium. This is a unique opportunity to learn about futures
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BPs shares fell to a new 13-year low while the monthly report from the European live real-time environment.
last week, and by as much as 49 per Central Bank, UK retail sales, US inflation,
cent since its April high, which is an Philly Fed and UK public finances are all like-
aggressive loss. The best way to manage ly to keep everybody interested as the week F
Featured
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your risk in spread betting is to use a guar- draws to a close.
anteed stop loss. A stop loss is an order to If the World Cup hasnt swayed your
close an existing trade at a specific level in focus, that is. ST
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T WAS an exciting start to the 2010 World Cup with MIKE BAGHDADY TradeStation Securities
a tight game between hosts South Africa and Mexico Practical Applications of Price Building Effective Trading
radin
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ending in a draw, and an equally tight game between
England and the USA. But football traders will be Behavior in Rule-Based Trading
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focused on the next games on the schedule. Indicator Visualization
Today sees the Netherlands take on Denmark in
Group E and there are plenty of opportunities for some Register today online at T
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canny spread bets ahead of the game at 12.30pm.
Holland is typically a strong team but its footballing Coach Bert van Marwijk has calmed down the Dutch
history has been littered with stories of unfufilled Call toll-free 00800 777 76543 to get all the details
potential. However, those expecting more from the to go all the way this year and van Persie will be vital to about this valuable two-day TradeStation
r eve
event.
Dutch in 2010 should take a look at extrabets their chances. Sporting Index is offering a spread of 23-
Netherlands 100 index, currently trading at 32-35. 26 on the total number of goal minutes for van Persie.
Teams that get knocked out in the semi-finals get 50 Group F kicks off at 7.30pm this evening with Italy
points, runners-up receive 75 and the winners get a full
100.
The Dutch have been involved in some fiery games in
and Paraguay battling it out. However, a high-scoring
game is unlikely defence is often the best form of
attack for the Italians and Paraguay havent scored
TradeStation Securities
Member NYSE, FINRA, NFA and SIPC
the past but under head coach Bert van Marwijk they more than two goals in a game in their last 10 starts. These are educational workshops designed to demonstrate what we believe are the valuable benefits of
have been well-disciplined. In their eight qualifiers they Selling extrabets total match goals at 2.1-2.3 might well using TradeStation. No offer or solicitation to buy or sell securities, securities derivatives, or futures products
only exceeded two bookings in one match and had no be a savvy trade. of any kind, or investment or trading advice, recommendation or strategy regarding any security, group of
cards at all in four of the games. It will depend on the Tomorrow, favourites Brazil make their debut against securities, market segment or market, is intended, shall be given, or in any manner endorsed by TradeStation
Securities, Inc. or any of its affiliates. Past per formance, whether actual or indicated by simulated historical
referee, but a sell of Sporting Indexs Netherlands team North Korea. While the Samba Boys might be happy tests, is no guarantee of future per formance or success. Trading on margin increases risk by magnifying the
bookings for the match at 17 looks decent value. (Its 10 with a 2-0 win, they could try to send a message to the extent of potential losses. If you are unsure as to whether or not a par ticular investment is appropriate for
points for a yellow and 25 for a red.) rest of the competition and go to town. Traders could you, you should seek independent advice. Visit www.tradestation.co.uk for additional risk disclosures.
Robin van Persie had a frustrating season with buy Brazil supremacy a prediction on the winning This material has been issued by TradeStation Securities, Inc. and approved by TradeStation Europe Limited
Arsenal due to injury but he is a top quality striker on margin, in goals, of one team versus another at 2.7 (an introducing broker to TradeStation Securities, TradeStation Group Inc.s main operating subsidiar y)
his day and has scored four goals in Hollands last three with Sporting Index. as defined in Section 21 of the Financial Ser vices and Markets Act 2000. TradeStation Europe Limited is
warm-up games. The Group E favourites will be hoping Jessica Mead authorized and regulated by the Financial Ser vices Authority (FSA A)
and has passpor ts under the MiFID
Directive 2004/39/EC in all countries in the EEA (except for Romania).
26 Markets & Investments CITYA.M. 14 JUNE 2010
LONDONS 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 . . . . . . . . . . . . . . . . . . . . . . . .287.90 0.60 314.80 216.75 Compass . . . . . . . . . . . . . . . . . .563.00 3.50 572.00 307.75 Jardine Lloyd Thompson. . . . . . .558.50 1.00 604.50 393.00 Sainsbury(J) . . . . . . . . . . . . . . . .321.40* 1.70 373.00 306.50
3i Infrastructure . . . . . . . . . . . . .108.60* +0.90 114.40 87.50 Cookson . . . . . . . . . . . . . . . . . . .439.40 +5.40 616.00 220.00 Johnson Matthey . . . . . . . . . . .1508.00* 11.00 1814.00 1077.00 Schroders . . . . . . . . . . . . . . . . .1327.00 +4.00 1450.00 764.00
A.B. Foods . . . . . . . . . . . . . . . . .994.50* +2.00 1045.00 718.50 Croda Intl . . . . . . . . . . . . . . . . .1035.00 +3.00 1047.00 498.50 JPMorgan Emerg Mkts . . . . . . . .506.50 +1.50 549.00 350.50 Schroders N/V. . . . . . . . . . . . . .1060.00 +6.00 1185.00 643.50
Aberdeen Asset Man . . . . . . . . . .136.40* 155.60 111.00 CSR . . . . . . . . . . . . . . . . . . . . . .405.80 +6.30 524.00 320.75 Kazakhmys . . . . . . . . . . . . . . . . 1134.00 10.00 1634.00 567.50 Scot. & Sthrn Energy. . . . . . . . . 1106.00 1206.00 357.50
Admiral. . . . . . . . . . . . . . . . . . .1372.00 +6.00 1403.00 833.50 Daily Mail A . . . . . . . . . . . . . . . .473.00* +1.40 539.00 264.25 Kesa Electricals . . . . . . . . . . . . .108.30 +3.20 162.00 98.45 Scottish Mortgage. . . . . . . . . . . .566.00* +5.50 623.50 376.00
Aegis . . . . . . . . . . . . . . . . . . . . .109.50* +0.20 137.30 79.75 Dana Petroleum . . . . . . . . . . . .1088.00 +44.00 1549.00 968.50 .LQJVKHU . . . . . . . . . . . . . . . . . .222.40* +0.60 255.00 171.40
Afren . . . . . . . . . . . . . . . . . . . . . .87.00 2.80 111.00 38.50 Davis Service . . . . . . . . . . . . . . .371.90 5.60 442.30 307.00 Ladbrokes . . . . . . . . . . . . . . . . .137.30 +0.50 174.29 114.60 SEGRO . . . . . . . . . . . . . . . . . . . .272.10 +4.20 403.10 250.00
Aggreko . . . . . . . . . . . . . . . . . .1415.00 58.00 1489.00 476.25 De La Rue . . . . . . . . . . . . . . . . . .970.00 14.00 1021.00 808.50 Lancashire Hldgs . . . . . . . . . . . .492.50 +9.50 540.00 416.70 Serco . . . . . . . . . . . . . . . . . . . . .628.00 1.00 656.50 394.30
Alliance Trust . . . . . . . . . . . . . . .317.70 +2.60 352.70 260.25 Debenhams . . . . . . . . . . . . . . . . .58.60 +0.80 91.95 53.75 Land Securities . . . . . . . . . . . . . . 611.50 743.50 415.25 Severn Trent . . . . . . . . . . . . . . .1246.00 +3.00 1258.00 921.00
AMEC . . . . . . . . . . . . . . . . . . . . .821.50* 891.00 603.50 Derwent London . . . . . . . . . . . .1306.00* 17.00 1490.00 844.00 Legal & General . . . . . . . . . . . . . .81.05 +1.00 94.40 49.37 Shaftesbury . . . . . . . . . . . . . . . .357.50* 2.10 426.50 284.00
Amlin . . . . . . . . . . . . . . . . . . . . .378.90 +9.30 428.50 291.00 Dexion Absolute . . . . . . . . . . . . .139.00 +2.00 148.00 107.75 Lloyds Banking Gp . . . . . . . . . . . .54.33 1.58 75.58 40.42 Shire. . . . . . . . . . . . . . . . . . . . .1430.00 +1.00 1526.00 798.50
Anglo American . . . . . . . . . . . .2576.50 45.00 3015.50 1540.00 Diageo . . . . . . . . . . . . . . . . . . . 1104.00 +2.00 1176.00 831.50 Logica . . . . . . . . . . . . . . . . . . . .122.90 0.10 149.10 71.50 SIG . . . . . . . . . . . . . . . . . . . . . . .109.10 +0.10 146.60 82.25
Antofagasta . . . . . . . . . . . . . . . .856.50* 15.50 1100.00 546.50 Dimension Data . . . . . . . . . . . . . .98.25 +0.10 105.00 53.75 London Stock Exchange . . . . . . .618.50 +18.00 949.50 588.00 Smith & Nephew . . . . . . . . . . . . .639.00 2.50 700.50 435.25
Aquarius Platinum . . . . . . . . . . .355.00 6.70 490.00 172.75 Dominos Pizza . . . . . . . . . . . . . .376.10 +11.10 379.90 192.75 Lonmin . . . . . . . . . . . . . . . . . . .1578.00 24.00 2198.00 950.00 Smiths . . . . . . . . . . . . . . . . . . .1067.00 6.00 1177.00 649.00
ARM Holdings . . . . . . . . . . . . . . .289.40 0.70 362.40 104.00 Drax . . . . . . . . . . . . . . . . . . . . . .367.90 +12.30 496.50 321.50 Man . . . . . . . . . . . . . . . . . . . . . .246.40 +3.60 373.60 199.60 SOCO Intl . . . . . . . . . . . . . . . . . .416.00 +17.90 419.00 380.60
Arriva . . . . . . . . . . . . . . . . . . . . .766.50 782.50 378.50 DSG Intl . . . . . . . . . . . . . . . . . . . .27.00 +1.48 39.75 19.25 Marks & Spencer. . . . . . . . . . . . .340.90* 2.10 412.70 281.50 Spectris . . . . . . . . . . . . . . . . . . .810.00* 8.00 928.00 493.50
Ashmore . . . . . . . . . . . . . . . . . . .248.50 +0.70 311.20 183.25 Dunelm . . . . . . . . . . . . . . . . . . . .348.30 1.60 438.40 202.00 Marstons . . . . . . . . . . . . . . . . . . .96.30* +0.65 119.67 77.50 Spirax-Sarco Eng . . . . . . . . . . .1394.00 4.00 1591.00 749.50
Ashtead . . . . . . . . . . . . . . . . . . .108.90 3.80 128.50 52.00 Easyjet . . . . . . . . . . . . . . . . . . . .418.00 +3.90 499.90 260.00 Meggitt . . . . . . . . . . . . . . . . . . . .313.10 6.20 328.70 151.75
Astrazeneca . . . . . . . . . . . . . . .3056.00 +67.00 3136.00 2487.00 Edinburgh Inv Tst . . . . . . . . . . . .397.90 +3.10 412.40 297.50 Melrose . . . . . . . . . . . . . . . . . . .212.40 +0.50 251.50 87.75 Spirent Comms . . . . . . . . . . . . . .109.30 +1.30 127.80 54.50
Atkins(Ws) . . . . . . . . . . . . . . . . .715.00 +4.50 730.00 513.50 Electrocomponents . . . . . . . . . . .217.20 +0.50 245.00 134.25 Mercantile IT . . . . . . . . . . . . . . . .918.00 +13.00 1002.00 716.50 SSL Intl . . . . . . . . . . . . . . . . . . . .850.50 9.50 893.50 481.25
Autonomy Corp . . . . . . . . . . . .1900.00 15.00 1945.00 1121.00 EnQuest . . . . . . . . . . . . . . . . . . .105.00 112.70 87.35 Michael Page Intl. . . . . . . . . . . . .381.20 0.30 461.50 218.50 St Jamess Place . . . . . . . . . . . . .227.50 2.40 296.90 172.25
Aveva . . . . . . . . . . . . . . . . . . . . 1125.00 7.00 1237.00 661.00 Eurasian Nat Res . . . . . . . . . . .1028.00* +2.00 1276.00 582.00 Micro Focus . . . . . . . . . . . . . . . .518.50 +3.50 550.00 300.90 Stagecoach. . . . . . . . . . . . . . . . .182.00 +2.00 204.90 114.75
Aviva . . . . . . . . . . . . . . . . . . . . .336.80 +2.70 474.00 274.75 Euromoney Inst Inv . . . . . . . . . . .587.50* +14.50 630.00 191.25 Millen & Copthorne . . . . . . . . . . .421.00 1.10 496.30 217.25 Standard Chartered . . . . . . . . . .1615.50 33.50 1847.00 1115.00
Babcock International . . . . . . . . .595.50 +6.00 660.50 448.50 Experian . . . . . . . . . . . . . . . . . . .622.00 +1.00 664.50 434.00 Misys . . . . . . . . . . . . . . . . . . . . .256.70 0.10 281.70 157.25 Standard Life . . . . . . . . . . . . . . .181.90 0.20 237.00 172.60
BAE Systems . . . . . . . . . . . . . . .321.20 3.70 389.90 294.20 F&C Comm Prop . . . . . . . . . . . . . .93.65* 0.25 96.80 73.50 Mitchells & Butlers . . . . . . . . . . .310.30 +1.40 343.90 221.75 TalkTalk . . . . . . . . . . . . . . . . . . .122.60 0.40 147.10 106.60
Balfour Beatty . . . . . . . . . . . . . . .254.10* +2.30 328.85 238.50 Ferrexpo . . . . . . . . . . . . . . . . . . .252.80 1.70 396.20 112.00 MITIE . . . . . . . . . . . . . . . . . . . . .227.90 2.50 281.70 204.25 Talvivaara Mining . . . . . . . . . . . .370.30 +10.30 501.50 315.00
Barclays . . . . . . . . . . . . . . . . . . .290.85 +3.00 394.25 255.00 FirstGroup . . . . . . . . . . . . . . . . .388.50 +3.50 448.80 322.75 Mondi . . . . . . . . . . . . . . . . . . . . .407.00 +6.60 488.00 182.00 Tate & Lyle . . . . . . . . . . . . . . . . .473.30 4.30 481.40 284.75
Barratt Development . . . . . . . . . . .99.10 +1.90 193.31 91.80 Foreign & Col Inv Tst. . . . . . . . . .273.90 +2.70 297.20 210.25 Monks Inv Tst . . . . . . . . . . . . . . .292.50 +1.50 321.20 222.00 Taylor Wimpey . . . . . . . . . . . . . . .29.55 +0.07 54.90 27.40
BBA Aviation . . . . . . . . . . . . . . .189.10 +0.70 220.00 105.00 Fresnillo . . . . . . . . . . . . . . . . . .1009.00 4.00 1025.00 438.00 Morrison Wm . . . . . . . . . . . . . . .261.70 3.00 306.30 234.25 Telecity . . . . . . . . . . . . . . . . . . . .403.70 +14.90 455.00 272.00
Beazley. . . . . . . . . . . . . . . . . . . .120.20 +6.00 122.00 86.00 G4S . . . . . . . . . . . . . . . . . . . . . .279.10 +0.10 285.70 197.90 Murray Intl Tst . . . . . . . . . . . . . . .835.00 +12.00 893.50 575.00 Templeton Emrg Mkts . . . . . . . . .538.00 +1.50 598.00 346.50
Bellway. . . . . . . . . . . . . . . . . . . .641.00* 3.00 927.50 591.50 Genesis Emerging Mkts Fd . . . . .460.50 +1.50 484.00 370.00 National Express. . . . . . . . . . . . .226.50 +3.50 256.80 135.08
Berkeley . . . . . . . . . . . . . . . . . . .761.00 +2.00 989.50 735.00 GKN . . . . . . . . . . . . . . . . . . . . . .126.00 0.40 155.00 67.49 National Grid . . . . . . . . . . . . . . .499.00* 0.40 607.65 466.71 Tesco . . . . . . . . . . . . . . . . . . . . .394.20* 7.35 454.90 347.40
BG . . . . . . . . . . . . . . . . . . . . . .1098.00 +28.00 1248.00 966.90 GlaxoSmithKline . . . . . . . . . . . . 1197.00* +33.50 1347.00 1038.50 Next . . . . . . . . . . . . . . . . . . . . . 2117.00* 2.00 2360.00 1402.00 Thomas Cook . . . . . . . . . . . . . . .198.80 +1.80 277.20 189.70
BHP Billiton . . . . . . . . . . . . . . .1871.00 4.50 2346.00 1274.50 Great Portland Estates . . . . . . . .288.00 1.80 332.10 203.75 Northumbrian Water . . . . . . . . . .286.90 +0.20 296.30 219.90 Tomkins . . . . . . . . . . . . . . . . . . .247.30* 0.70 258.50 135.00
BlackRock Mining . . . . . . . . . . . .565.00 5.00 654.50 346.00 Greene King . . . . . . . . . . . . . . . .390.30 +3.50 504.00 359.50 Old Mutual . . . . . . . . . . . . . . . . .108.70* 1.40 127.20 71.00 Travis Perkins . . . . . . . . . . . . . . .761.00 10.00 915.00 461.00
Booker . . . . . . . . . . . . . . . . . . . . .41.60* 0.25 49.50 32.75 Halfords . . . . . . . . . . . . . . . . . . .534.00 +4.00 544.00 299.00 Partygaming . . . . . . . . . . . . . . . .257.00 +2.00 339.70 213.30 TUI Travel . . . . . . . . . . . . . . . . . .224.80 +4.40 313.90 213.80
BP . . . . . . . . . . . . . . . . . . . . . . .391.90* +26.40 658.20 345.15 Halma . . . . . . . . . . . . . . . . . . . . .253.40 1.10 278.50 169.25 Pearson . . . . . . . . . . . . . . . . . . .935.00 3.00 1069.00 574.00 Tullett Prebon . . . . . . . . . . . . . . .340.10 0.20 436.20 261.20
Brit Insurance . . . . . . . . . . . . . . .880.00* +151.00 913.50 709.00 Hammerson . . . . . . . . . . . . . . . .359.30 +0.80 460.30 277.00 Pennon . . . . . . . . . . . . . . . . . . . .539.00 0.50 558.00 434.40 Tullow Oil . . . . . . . . . . . . . . . . . 1162.00 +41.00 1375.00 834.50
British Airways . . . . . . . . . . . . . .199.10 +4.30 255.80 117.30 Hansen Trans . . . . . . . . . . . . . . . .87.00 +1.00 163.50 78.00 Persimmon . . . . . . . . . . . . . . . . .366.60 +5.50 534.50 340.25 UK Commercial Prop. . . . . . . . . . .76.45 1.55 84.90 59.50
British Amer. Tob . . . . . . . . . . .2161.50 +0.50 2335.50 1637.00 Hargreaves Lansdown . . . . . . . .354.50 3.50 387.00 197.25 Petrofac . . . . . . . . . . . . . . . . . .1262.00 +15.00 1294.00 580.00 Ultra Electronics . . . . . . . . . . . .1586.00 12.00 1678.00 1064.00
British Empire Tst . . . . . . . . . . . .429.30* 0.10 467.90 338.50 Hays . . . . . . . . . . . . . . . . . . . . . . .96.35 +0.30 119.00 80.00 Petropavlovsk . . . . . . . . . . . . . .1268.00 13.00 1370.00 515.00 Unilever . . . . . . . . . . . . . . . . . .1898.00* 9.00 2024.00 1419.00
British Land . . . . . . . . . . . . . . . .454.00 4.20 532.00 353.00 Henderson . . . . . . . . . . . . . . . . .130.20 0.20 157.80 83.75 Premier Farnell . . . . . . . . . . . . . .237.90* 6.10 249.70 121.25 United Utilities . . . . . . . . . . . . . .560.00 7.50 575.00 429.00
Britvic. . . . . . . . . . . . . . . . . . . . .472.90* 3.10 497.70 253.25 Heritage Oil. . . . . . . . . . . . . . . . .438.00 +7.50 587.00 409.80 Premier Oil . . . . . . . . . . . . . . . . 1189.00 +29.00 1431.00 984.00 Utd Business Media . . . . . . . . . .517.00 +3.00 579.50 364.75
Brown(N.) . . . . . . . . . . . . . . . . . .262.70 3.00 284.30 204.25 Hikma Pharma . . . . . . . . . . . . . .699.50 +5.00 730.00 412.00 Provident Financial . . . . . . . . . . .850.00* +11.00 986.00 763.00
BSkyB . . . . . . . . . . . . . . . . . . . .586.50 +1.00 637.50 423.75 Hiscox . . . . . . . . . . . . . . . . . . . .342.10 +4.80 369.30 279.50 Prudential . . . . . . . . . . . . . . . . . .535.00 14.50 665.00 350.25 Vedanta Resources . . . . . . . . . .2214.00 6.00 2967.00 1262.00
BT . . . . . . . . . . . . . . . . . . . . . . .135.90 +4.10 151.00 92.30 Hochschild Mining . . . . . . . . . . .310.20 +5.20 370.60 220.00 PZ Cussons . . . . . . . . . . . . . . . .301.80 +5.80 305.50 169.75 Victrex . . . . . . . . . . . . . . . . . . . 1149.00* +29.00 1152.00 498.50
Bunzl . . . . . . . . . . . . . . . . . . . . .724.00* 6.00 784.50 478.50 Home Retail . . . . . . . . . . . . . . . .233.70* +5.40 336.50 224.80 Qinetiq . . . . . . . . . . . . . . . . . . . . 119.80 +1.40 179.10 113.90 Vodafone . . . . . . . . . . . . . . . . . .140.00* +0.60 153.80 111.90
Burberry . . . . . . . . . . . . . . . . . . .786.00 +2.00 803.50 359.00 Homeserve . . . . . . . . . . . . . . . .2060.00 35.00 2190.00 1336.00 Randgold Resources. . . . . . . . .6075.00 25.00 6285.00 3351.00 VT . . . . . . . . . . . . . . . . . . . . . . .765.00 +4.00 773.00 416.00
Cable & Wire Comms . . . . . . . . . .56.50* 0.50 150.00 53.00 HSBC Hldgs . . . . . . . . . . . . . . . .646.80* +2.30 766.80 487.00 Reckitt Benckiser . . . . . . . . . . .3237.00 1.00 3667.00 2686.00 Weir . . . . . . . . . . . . . . . . . . . . . .950.50 5.50 1076.00 437.50
Cable & Wire Wwide . . . . . . . . . . .88.85* +3.85 94.80 68.60 Hunting . . . . . . . . . . . . . . . . . . .462.50 +10.80 659.50 377.00 Reed Elsevier . . . . . . . . . . . . . . .494.60 +11.10 548.00 403.75 Wetherspoon(J.D.) . . . . . . . . . . .425.50 +6.20 556.00 348.00
Cairn Energy. . . . . . . . . . . . . . . .419.20 +11.30 441.50 306.80 ICAP . . . . . . . . . . . . . . . . . . . . . . 411.30 +6.30 478.30 291.70 Regus . . . . . . . . . . . . . . . . . . . . . .82.85 0.50 125.50 58.75 WH Smith . . . . . . . . . . . . . . . . . .441.30* +6.10 551.00 405.25
Caledonia Invs . . . . . . . . . . . . .1613.00 +22.00 1759.00 1459.00 IG . . . . . . . . . . . . . . . . . . . . . . . .428.20 +5.90 446.10 256.50 Rentokil Initial . . . . . . . . . . . . . . . 117.00 1.90 140.20 82.25 Whitbread . . . . . . . . . . . . . . . . .1401.00* 9.00 1645.00 778.50
Capita . . . . . . . . . . . . . . . . . . . . .794.50 829.50 643.50 Imagination Tech Gp . . . . . . . . . .265.20 6.80 289.30 83.00 Resolution . . . . . . . . . . . . . . . . . .60.30 0.20 99.15 58.45 William Hill . . . . . . . . . . . . . . . . .180.20 +1.60 217.80 160.50
Capital & Counties . . . . . . . . . . .108.00 +2.10 125.40 99.60 IMI . . . . . . . . . . . . . . . . . . . . . . .672.00 0.50 742.00 275.25 Rexam . . . . . . . . . . . . . . . . . . . .315.20 2.10 330.50 222.50 Witan Inv Tst . . . . . . . . . . . . . . . .438.50 +1.50 487.00 329.50
Capital Shopping Centres . . . . . .331.50 +2.50 580.00 300.20 Imperial Tobacco. . . . . . . . . . . .1899.00 +2.00 2159.00 1547.00 Rightmove . . . . . . . . . . . . . . . . .689.00* 18.50 729.00 334.00 Wolseley . . . . . . . . . . . . . . . . . .1588.00 9.00 1742.00 986.00
Carillion . . . . . . . . . . . . . . . . . . .328.70* +0.60 361.90 236.75 Inchcape. . . . . . . . . . . . . . . . . . .263.20 +0.90 347.00 253.20 Rio Tinto . . . . . . . . . . . . . . . . . .3214.50 47.50 4104.00 1822.00
Carnival . . . . . . . . . . . . . . . . . .2588.00* 2937.00 1431.00 Informa . . . . . . . . . . . . . . . . . . . .391.50 0.70 439.40 216.00 RIT Capital Partners . . . . . . . . .1084.00 5.00 1159.00 861.50 Wood Group (John). . . . . . . . . . .315.00 +10.90 411.70 231.25
Catlin . . . . . . . . . . . . . . . . . . . . .346.90 +20.50 380.50 284.75 Inmarsat . . . . . . . . . . . . . . . . . . .818.00 +3.00 822.00 491.00 Rolls Royce . . . . . . . . . . . . . . . .592.50* 7.00 631.50 325.00 WPP . . . . . . . . . . . . . . . . . . . . . .680.50 5.00 744.00 380.50
Centrica . . . . . . . . . . . . . . . . . . .286.80* +2.00 320.00 212.50 Intercontl Hotels . . . . . . . . . . . . 1155.00 +14.00 1175.00 584.50 Rotork . . . . . . . . . . . . . . . . . . .1337.00 10.00 1482.00 779.50 Xstrata . . . . . . . . . . . . . . . . . . .1000.00 3.00 1344.50 555.10
Charter Intl . . . . . . . . . . . . . . . . .688.00 +11.00 855.50 395.25 Intermediate Capital . . . . . . . . . .259.70 +2.60 332.00 170.25 Royal Bank Of Scot . . . . . . . . . . . .42.37 0.79 58.95 28.25 Yell Group. . . . . . . . . . . . . . . . . . .28.60 +2.54 86.00 20.25
Chemring . . . . . . . . . . . . . . . . .3325.00 48.00 3711.00 1910.00 Intertek . . . . . . . . . . . . . . . . . . .1425.00* +1.00 1576.00 987.50 Royal Dutch Shell A . . . . . . . . .1792.00 +30.50 2068.50 1431.00 LONDON TOP 250 BY MARKET CAPITALISATION
Chloride Group . . . . . . . . . . . . . .346.60 +2.70 346.60 129.00 Intl Power . . . . . . . . . . . . . . . . . .305.40* +5.00 354.00 228.00 Royal Dutch Shell B . . . . . . . . .1714.00 +30.00 1997.50 1437.00
Close Bros . . . . . . . . . . . . . . . . .697.50 2.50 806.50 623.00 Invensys . . . . . . . . . . . . . . . . . . .273.50 5.60 350.30 212.25 RSA Insurance . . . . . . . . . . . . . .121.70 +2.50 142.00 113.10 * Ex-Dividend Suspended
Cobham . . . . . . . . . . . . . . . . . . .232.00* 1.30 278.60 164.90 Investec . . . . . . . . . . . . . . . . . . .483.40 2.40 565.00 309.75 SABMiller . . . . . . . . . . . . . . . . .1930.00 25.00 2090.00 1210.00
COLT Group . . . . . . . . . . . . . . . .132.30 2.60 144.20 98.25 ITV . . . . . . . . . . . . . . . . . . . . . . . .56.00 +0.75 71.75 31.75 Sage . . . . . . . . . . . . . . . . . . . . . .242.00* 4.20 260.50 167.20 www.interactivedata.com
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REPORT April closing high for the year, and decline since Monday, when it hit 11,200
considered in correction territory. $1.1876 its lowest level since 2006.
Weve gone through a period of Wall Street will keep a weather eye 10,800
extreme nervousness... and problems this week on the recovery in the US
U
S stock investors will keep a havent gone away, but I think right housing sector, still deemed fragile 10,400
close eye on Europe this week, now, global investors are little less jit- with the expiration of a federal tax
looking for signs the debt crisis tery, said Fred Dickson, chief market credit for home buyers. 10,000
may be stabilising, while indus- strategist at DA Davidson & Co in Lake US housing starts and building per-
9,600
trial production, housing starts and Oswego, Oregon. mits for May will be released on 24 Mar 5 Apr 14 Apr 23 Apr 4 May 13 May 24 May 3 Jun
inflation data may offer more clues The Chicago Board Options Wednesday. Economists forecast that
on the US economic outlook. Exchanges Volatility Index or VIX, a housing starts will slip to an annual
On Friday, an official said the measure of Wall Streets anxiety, slid pace of 650,000 units in May from ANALYSIS l S&P 500
European Union has reached agree- 5.82 per cent to end at 28.79 on Friday Aprils pace of 672,000 units. 1,250 1,091.60
ment with Greece on how to move after rising more than 20 per cent a Both the Producer Price Index and 11 Jun
forward with pension reform, while week ago. the Consumer Price Index for May are 1,200
Spains economy ministry said it has The three major US stock indexes expected from the US government.
not made and will not make a finished with gains for the week, with The overall PPI for May, also due on 1,150
request for economic aid from the the Dow Jones industrial average up Wednesday, is forecast to fall 0.5 per
1,100
EU. 2.8 per cent, the S&P 500 up 2.5 per cent, compared with a 0.1 per cent
Market sentiment has been cent and the Nasdaq Composite Index dip in April. Core PPI, excluding 1,050
plagued for weeks by worries that up 1.1 per cent. volatile food and energy prices, is
European debt problems, including I will be looking to see if the euro forecast to edge up 0.1 per cent in 1,000
those in Greece, Spain and Hungary, holds gains that we saw in the last May, after rising 0.2 per cent in April. 24 Mar 5 Apr 14 Apr 23 Apr 4 May 13 May 24 May 3 Jun
City Focus HOW TO FILL 27
YOUR POCKETS
| Law SEE MENS FASHION P30
Takeover panel
review is wise
and thoughtful
Protecting shareholder democracy is central
to recommendations, and quite right too
the second and third, the panel is demon-
strating that they are different points. The
commentators had combined an industri-
al policy issue with a shareholder control
issue.
HIGHER HURDLES
The second issue is one of public policy:
should there be higher hurdles to impor-
PHILIP BROKE tant British companies being taken over?
The Takeover Panels job is not to protect
CORPORATE PARTNER, WHITE & CASE
the British economy: that falls to govern-
T
HE consultation document issued by ment. The panels careful introduction to
the Takeover Panel shortly after the the consultation paper, setting out its role
panels censure of Kraft over its suc- in words that will be familiar to this news-
cessful hostile takeover of Cadbury, papers readers, should steer any responsi-
unusually does not contain changes to the bility for industrial policy to government,
Takeover Code recommended by the where it belongs. The Cadbury takeover majority (say 67 per cent or 75 per cent) by pushed into disclosing more about
panel. Rather, the Takeover Panel is seek- The third criticism of the Kraft takeover, was controversial. threshold for takeovers to be allowed and their future plans than they currently do
ing to provide a forum in which sugges- which the consultation paper is setting the withholding of voting rights for share- in practice? That change might allow
tions for possible changes may be out for debate, is that some shareholders holders who purchased shares after a some interest groups, such as employees,
debated, by setting out those suggestions who accepted the offer had purchased takeover bid was launched, will only to have a greater influence on the out-
for the reform of the Takeover Code put their shares after the takeover deal was undermine shareholder democracy come of a takeover. It is a proper subject
forward by commentators, plus a few announced. The commentators wanted to (majority rule) and shareholder equality for debate as to whether that would pro-
thoughts of its own. The panel is rightly exclude latecomers from affecting the out- (by distinguishing between good and duce better results in takeovers; the panel
trying to ensure that it remains at the cen- come of a takeover. That aim divided bad shareholders). noted that Cadbury had already decided
tre of any debate on the issues. shareholders into short-term and long- As the consultation paper gently shows, to close Somerdale long before the bid.
The angst expressed by certain politi- term shareholders, creating a false divide these suggestions would have much wider The major suggestions in the consulta-
cians and industrialists at the time of the between groups of shareholders. and probably undesirable consequences tion paper are there because the commen-
Kraft takeover centred around three key The divide is false because the commen- and require changes to UK and European tators raised them, not because the panel
issues: Krafts closure of Cadburys tators at the time were looking to long- law, fundamentally because they are recommends them. They would be a mis-
Somerdale factory in favour of one in term shareholders to protect a major inconsistent with the principles of share- take and would undermine shareholder
Poland, despite reassurances against this; British company while not expecting holder democracy. democracy in the UK market and the UKs
the ease with which a major British com- short-term shareholders to act on that The other ideas in the consultation long-earned reputation for fairness and
pany was taken over; and that some share- basis. Both groups have a single aim: to paper are thoughtful, if rather technical, predictability. If there is a need for greater
holders who eventually accepted Krafts achieve a favourable financial result for but largely would have little effect on the protection for major British companies,
bid had bought shares after the takeover their own investors, be they institutional result the commentators wanted. One par- that is a matter for industrial policy, not
process began. By criticising Kraft over the or retail. The suggestions of the commen- ticular suggestion merits further thought takeover mechanics, and should be debat-
first issue and separately consulting on tators, which include imposing a super- in the panels open forum: should bidders ed and legislated for accordingly.
T
IDJANE Thiam of the Pru may well worried that annual elections might be that annual re-election gives sharehold- being trigger happy where this right is
be grateful that the new Corporate accountability in too short a time frame ers who are, after all, the owners of the concerned.
Governance Code with its require- and did not recommend it in his Walker company a more direct voice into the This brings us to another part of the
ment for all directors of FTSE 350 Review, although he has subsequently key issues affecting the company and that, code the need for shareholder engage-
companies to be subject to annual re-elec- publicly stated he now regards it as a going forward, directors will ignore that ment. The code requires boards to speak
tion by shareholders only takes effect good thing. The view as to whether annu- shareholder voice at their peril. If ignoring regularly to shareholders and sharehold-
from 29 June this year. al re-election is likely to be an effective the concerns of shareholders means those ers to express their views to the board.
At the heart of the new code is a focus tool for ensuring better boardroom behav- shareholders voting against you, the feel- Properly done, the spectre of being voted
on the long-term success of a company. iour is typically split depending on which ing is that there is now a very real impetus off should not be a tangible threat. It is a
Yet with the new proposal, directors must camp you are in. Those who do not like to listen to what shareholders have to say. weapon in the armoury of dissatisfied
effectively justify their performance to the proposal typically companies and Boards could, of course, choose to over- shareholders, but the evidence would sug-
shareholders annually or face being voted directors point to the potentially desta- look this: as a comply or explain gest that speaking to shareholders regu-
out at the AGM. Does this raise the spec- bilising effect. Annual re-election, its requirement, a FTSE 350 board could larly means it is one that they do not
tre of short-termism? And how can this detractors say, can amount to little more explain why it thinks annual re-election need or want to deploy.
Lifestyle
28 CITYA.M. 14 JUNE 2010
| Travel
Jungles, sea
and history in
old Malaysia
A
100-mile ferry-ride across the South had heart failure.
China Sea is Langkawi, one of the Luckily I wasnt swimming the next day,
worlds most idyllic spots for sun- when our National Park guide Joseph,
bathing, swimming in crystal super-sexy jungle-man and ex-banker,
green waters framed by lush jungle, and pointed out several giant monitors float-
the total luxury of a world-class beach ing and clambering over the rocks. The
resort. Its gorgeous but probably quite South China Sea, as we saw that day, also
similar to retreats in Thailand, Indonesia, contains a delectable salad of squid, four-
the Caribbean, Costa Rica, Mauritius...you foot jellyfish, and something called sea
get the idea. cockroaches (little grey creatures whose
But I have flown across the world flesh Joseph describes as sweet and juicy).
albeit in the splendid, Champagne-washed In short, beautiful though this part of
comfort of Singapore Airlines bodacious, Malaysia is, it is no white-sand n palm
super-genteel flat-bed business class to go tree resort. Its for travellers after some-
somewhere that is distinctly, uniquely thing a little more authentic. Jungle, mon-
Malaysia. And now I am on a beach in keys, culture and fabulous food can be
outer Penang, one of Malaysias two found in abundance off the beaten path in
UNESCO heritage cities, and the heavens Malaysia. Our taster began with Kuching,
are gathering themselves together for a in the state of Sarawak on the island of
monumental storm. Its been 35 degrees Borneo, and then moved to Penang.
and 95 per cent humidity again, so Im
ready, along with the skies, for a big dump KUCHING
of precipitation. It was a bit of a shock going from 12 hours
Before the rain starts in earnest, in those in the lap of aero-luxury, waited on by a
last gusty minutes, I run past signs warn- brigade of beautiful flight attendants, to a Top: a boatman wild boars (which we saw mainly snuffling skilled handiwork, extraordinary hospi-
ing of giant jellyfish and dive, sweating, musty business hotel in the charmless, lingers in a Borneo near the toilets), numerous snakes and tality and dodgy sanitation, for yourself.
into the murky sea. Its like bath water, but industrial capital of Borneos biggest state, waterway; above: the countless species of birds and vegetation. As we were pressed for time, we com-
I cant see even my hands, so with the Sarawak (Borneo is the third largest island river in Kuching. Borneo is known for its enthusiastic leech- promised with a catch-all trip to the
thought of that jellyfish sign returning to in the world, and also includes Sabah in es, but we didnt see any. The proboscis Sarawak Cultural Village (www.
my mind, I decide to quit while Im ahead. Malaysia and Kalimantan in Indonesia). Pictures: GETTY, SXC, monkeys were deeply enthusiastic in their scv.com.my). It sounds dire, but its a very
Back on the beach, I stroll through the But Kuching, through which a majestic REUTERS courtship of our food; meanwhile our neat recreation of all the different long-
glowering clouds along the beach, attract- but murky river runs, stands out for two calm, knowledgeable guide (from special- houses and their tribes; each one
ed by a pretty cove at the end, where main reasons. One, it is the gateway to the ist operators Diethelm Travel, manned by a real tribesperson or per-
colourful local fishing boats cluster. splendours of Sarawak, which include www.diethelmtravel.com), pointed out sons. Some involve lovely dance perform-
But I dont make it. Because I suddenly orang-utans in their natural habitat we some brilliant green, poisonous snakes. ances, others feature women placidly
see a sight so terrifying, so extraordinary, saw them from a bit of a distance in the The mangroves are also home to an cooking delicious sugary treats over open
and so weird, that I stop in my tracks. trees of the Semenggok Rehabilitation impressive ecosystem look closely and flames. To cap off our tour was a highly
Creeping along the beach towards the Centre. Two, the food particularly the you can see whole communities of crabs, entertaining showcase of all the tradi-
water is a monster. Its low-slung creeping street (or hawker food) was some of the mud lobsters, fleas, insects, birds and tional long house dances, with troupes of
movement is unrecognisable, as is its six- best Ive ever had. other creatures burrowing busily. highly attractive, beautifully regaled
foot length and hefty girth, small head men and women performing dances that
and black colour. It heads straight into the BAKO LONGHOUSES were both entertaining and poignant.
water, has a bit of a swim, its little head Our first port of call was the Bako National Another of Sarawaks great attractions
poking out (maybe its just a weird dog, I Park, which we arrived at via a terrifically are its longhouses, dwellings in which FOOD
think), before sliding out and hesitantly fun motorised dinghy ride through the tribes live without much modern inter- Lunch on both days was a simple but
creeping back to where it came from. seething, pale blue chop, past cliffs that vention, surviving from traditional craft- utterly satisfying mixture of fragrant
Fresh with horror, I tell the tale to the rise eerily from the middle of the sea. work. Some Borneo longhouse tribes fresh white fish, plantain-style veggies,
first person I know back at the hotel, who There are 11 national parks in Sarawak have traditionally practised head hunt- morning glory (a weed-like green) and
happens to be Singaporean. Its a giant one of which features the largest cave ing in the Heart of Darkness sense, not rice wrapped in palm leaves. But for din-
monitor lizard Im told, practically still a chamber in the world (Gunung Mulu recruitment. But youre safe these days if ner, we had treats in store. The setting
dinosaur, and its related to the giant Park). But Bako one is the oldest and is you fancy a visit many tour operators was far from elegant: the Top Spot Food
komodo dragon of Indonesia. Oh, I say. If home to the rare proboscis monkey, long- offer overnight trips to longhouses where Court, a traditional Malay and
Id seen it while swimming Id surely have tailed macaques and silver leaf monkeys, you can witness the decorative costumes, Singaporean formation of stalls spread
CITYA.M. 14 JUNE 2010 MENS GROOMING 29
GOES UP A NOTCH
IN HEALTH
TOMORROW
TRAVEL NOTES
ZOE STRIMPEL
TO VENT? OR
JUST TO FLAP
2 Tim
4 3 Barber
1
Style
Counsel
How to fill C
AMERON and Clegg may be just about
succeeding in diverting attention away
from their differences, but as any sea-
soned politico will know, its in the fine
your pockets
details that things get interesting which is
also what a tailor would say. When the new
Prime Minister and his deputy appeared for
5 the first time at the door of Number 10 they
presented a picture of unity, but in one small
detail their suits told a different story.
This is all about vents the slits inserted
at the rear of a jacket to aid its hang. When
Nothing says style you choose a suit, you have the option of a
rear flap with a slit either side or a single
quite like a subtly 6
vent at the back. Cameron has chosen the
rear flap while Clegg has favoured the single
plush, richly crafted vent. It may seem like a minor detail, but as
with other tailoring decisions size of lapels,
wallet, believes number of buttons, turn-ups or not it can
say a lot about its wearer.
Timothy Barber The rear flap with two vents is the classic
English formal style and the look youd
expect to see in the City, so perhaps it is no
surprise that patrician Cameron has gone for
it. James Sleater of City tailoring outfit Cad
& the Dandy says this is the style hed gener-
ally recommend. It creases a lot less
7 because it breaks more easily when you
move or sit down, so its more practical and
hangs more smartly.
The single vent, while not exactly infra dig,
is certainly a bit more quirky according to
Sleater. Originally created for horse riding
so that the jacket can break over the saddle
its more popular in America than in this
country. It puts across a non-conformist
message, says Sleater, pointing out that in
the first TV debate Cleggs lighter blue suit
made him stand out from the more sombre-
ly-attired Cameron and Brown. Its a very
good example of how a suit can portray the
message youre trying to put across.
You have to be careful with single-vent
jackets sit the wrong way, put your hands
in your pockets or simply have too rotund a
physique, and the vents will part at the back
and your bum will be on show. The double
vent denotes safety and classic lines, but if
you want to trump your progressive attrib-
8 utes, even while appearing to conform and
you can pull it off the single vent could be a
goer.
SKY SPORTS 1 World of Golf 11pm WWE: Late LIVING E4 DISCOVERY HOME &
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QUICK CROSSWORD
SUDOKU KAKURO
35 39 9 14 43 19 29
27 10
6
16 9
Place the numbers from 1 to 9 in each empty cell so that each 12
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 16 38
37
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 30
above or to the left of it. 24
You can only use the digits 1-9 19 19
and you must not use the
11 37
28
same digit twice in a block. 15
The same digit may occur 16 22
13 29
more than once in a row or
column, but it must be in a
28
7 23
15
23 4
separate block.
8
20 34
10 13
ACROSS DOWN
1 Capital of 1 Senility (6)
WORDWHEEL N A
Bangladesh (5)
4 Hirsute (5)
2 Leave without
permission (7)
Using only the letters in the Wordwheel, you have 7 Pastoral (7) 3 Farewell remark (5)
ten minutes to nd as many words as possible,
N E 9 Item which prevents a 5 Joined by treaty or
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A ship from moving (6) agreement (6)
LAST ISSUES or more, all must contain the central letter and
letters can only be used once in every word. There
G E 10 Harsh, stern (6) 6 Brings up (6)
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$ $ , 7 $ 9 8 4 3 7 6 2 18 Goes out (5)
: $ / ( 6 * 2 2 6 ( 7 9 7 9 8 4 RATIONALE 22 Lustre (5)
Sport
32 CITYA.M. 14 JUNE 2010
RUGBY UNION
Tests, Johnsons record is inferior to regard and in that area with interna-
BRITISH Lions legend Sir Ian that of previous coaches Brian tional rugby, McGeechan said.
McGeechan has backed underfire Ashton and Andy Robinson, but Scot He hasnt had the best of luck at
England coach Martin Johnson, McGeechan, who took charge of times with injuries he had a lot of
insisting there should be no ques- Johnson in two of his three stints as injuries for the November interna-
tion about his future. Lions coach, believes the World Cup- tionals. I think it is a matter of know-
Johnson came under critiscism as winning captain has been unlucky ing which are his real starting core
England slumped to a 27-17 defeat to with injuries and should be backed players, which I think Martin will be
Australia in the first Test in Perth on by the Rugby Football Union. I dont trying to achieve now and in the
Saturday. think there should be any question November series.
WORLD CUP
BY JON COUCH broadcasters and other individuals and
it is something we are evaluating on an
WORLD CUP organising chief Danny ongoing basis.
Jordaan is considering calls to ban He added: We have tried to get some
vuvuzelas from the tournament follow- order with it. We have asked for no
ing complaints. vuvuzelas during national anthems or
The trumpet-like instruments have anyone is making an announcement.
constantly droned through every match I know it is a difficult question but
of this World Cup so far, drowning out we are trying to manage it as best we
singing and chanting from the fans. can.
Asked if it was a possibility that fans The vuvuzela is said to be based on
could be prevented from bringing the an African kudu horn instrument and
instruments into the stadiums, became popular at South African
Jordaan said: If there are grounds to events during the 1990s.
CITYA.M. 14 JUNE 2010 33
FOOTBALL
on top after
BY JON COUCH Goran Eriksson, trails in equal
ninth with a measly 1.2m by his 1 Fabio Capello (England) 8.8m
FABIO CAPELLO is alreay sitting on standards. 2 Marcello Lippi (Italy) 3m
top of the world in the high earn- Interestingly, Argentina boss
er stakes. Diego Maradona is only equal 13th
3 Joachim Low (Germany) 2.5m
The England manager heads the on the list with 800,000, along- 4 Lars Lagerback (Nigeria) 2m
5 Bert van Marwijk (Holland) 1.8m
Canadian win
list of the 32 World Cup bosses side Brazil counterpart Dunga and
with a salary of 8.8m almost the respective bosses of Japan and 6 Vicente del Bosque (Spain) 1.5m
three times more than that of the New Zealand. 7 Carlos Queiroz (Portugal) 1.35m
second-place manager, fellow But spare a thought for South 8 Carlos Parreira (S.Africa) 1.2m
Italian Marcello Lippi. Korean coach Kim Jong-Hun, wo 9 Sven G. Eriksson (I. Coast) 1.2m
Germanys Joachim Low comes props up the list with an annual 10 Pim Verbeek (Australia) 1.2m
in next with 2.5m, while the Ivory salary of 170,000.
SPORT | IN BRIEF
Sams the man at Queens Welcome win for Bjorn in Estoril
TENNIS: American Sam Querrey gave him- GOLF: Denmarks Thomas Bjorn shot a
self a pre-Wimbledon boost after beating closing round 68 to ease to victory in the
close friend and training partner Mardy Portuguese Open his first European Tour
Fish to win the Aegon Championship at success in four years.
Queens Club. Bjorn, 39, finished on 23-under-par in
The 6ft 6in Querrey, 28, used his big Estoril for a five-shot lead over playing
serve to full effect on the grass, coming partner Richard Green, of Australia.
through 7-6 (7-3), 7-5 against world No90 Englands Robert Rock was the highest-
Fish, conqueror of Andy Murray. placed Brit, finishing fourth on 14-under,
Its an honour, said the unseeded while Darren Clarkes best-of-the-day 66
Querrey, who claimed a fifth ATP Tour title saw him climb to sixth, two shots further
and first on grass. adrift.
All the greatest players in the world are It caps an incredible turn of form for
on this trophy. Its nice to be added to that Ryder Cup star Bjorn, who had just put an
list with them. end to a run of six successive missed cuts.
Results
WORLD CUP GROUP A GOLF
South Africa ..............(0) 1 Mexico.................................(0) 1
ESTORIL OPEN DE PORTUGAL (Penha Longa GC)FFinal rnd
Uruguay.........................(0) 0 France ..................................(0) 0
(Gbr & Irl unless stated, par 72): 265 Thomas Bjorn (Den) 67 65
GROUP B 65 68. 270 Richard Green (Aus) 67 69 64 70. 272 Mark F
Argentina......................(1) 1 Nigeria.................................(0) 0 Haastrup (Den) 67 68 70 67. 274 Robert Rock 68 67 68 71.
South Korea................(1) 2 Greece..................................(0) 0
MOTOR RACING
GROUP C
England...........................(1) 1 USA .........................................(1) 1 FIA FORMULA 1 CANADIAN GRAND PRIX (Montreal): 1 Lewis
Gerrard 4 Dempsey 40 Hamilton (Gbr) McLaren 1hr 33mins 53.456secs, 2 Jenson
Att: 44,026 Button (Gbr) McLaren 1:33:55.710, 3 Fernando Alonso (Spa)
Algeria ...........................(0) 0 Slovenia..............................(0) 1 Ferrari 1:34:02.670.
Att: 30,325 Koren 79 TENNIS
P W D L F A GD Pts
Slovenia 1 1 0 0 1 0 1 3 ATP AEGON CHSHIPS (London)FFinal: (7) Sam Querrey (USA)
England 1 0 1 0 1 1 0 1 bt Mardy Fish (USA) 7-6 (7-3) 7-5
USA 1 0 1 0 1 1 0 1 ATP GERRY WEBER OPEN (Halle, Germany)FFinal: (8) Lleyton
Algeria 1 0 0 1 0 1 -1 0
Hewitt (Aus) bt (1) Roger Federer (Swi) 3-6 7-6 (7-4) 6-4.
GROUP D
Germany .......................(2) 4 Australia ............................(0) 0 TODAYS DIARY
Podolski 8, Klose 27 World Cup Group E
Muller 68 Japan v Cameroon (3pm) ............................................................................................
Cacau 70 Att: 62,660 Holland v Denmark (12.30)..........................................................................................
Serbia .............................(0) 0 Ghana ...................................(0) 1 Group F
Att: 38,833 Gyan 84 (pen) Italy v Paraguay (7.30)..................................................................................................
A
S calamitous as Robert let slip in such a way. Jamie Carragher is a solid replace-
Greens mistake was on I think Fabio Capello will stick ment for King, he and John Terry
Saturday night, not playing with Robert Green for Friday. If not, showed against the USA that they
him for the second game hes effectively out of the tourna- are vulnerable to pace.
against Algeria on Friday night ment. Its a tough decision, but I wonder if Capello is taking a
would do more harm than good. thats why hes paid 8.8m, to make sneaky look at Michael Dawson with
You really have to feel sorry for those decisions. Friday in mind? Dawson has had a
Green. Mistakes like that dont hap- great season at Tottenham and is
pen too much in top-flight football, UNFATHOMABLE champing at the bit for a debut.
but the way he held his hands up, Looking back, Saturday nights was Gareth Barry looks to be ready
then kept his head to make that a strange game, not least for the for Friday and I expect him to come
crucial second half save, showed surprising decisions which Capello straight back into the side. I think
guts. made on the night. we missed Barry in that holding
Ive said all along that David Firstly, the decision to play role on Saturday and Capello, Im
James should be the first-choice Milner, who had been sick all week, sure, will be desperate to get that
keeper but I just feel that by not missing three training sessions and shirt on his back.
playing Robert Green against the clearly not fit,
Algerians you would be shattering was baffling
Im sorry, says
calamity keeper
ond group
WORLD CUP stage game
2010 a g a i n s t
BY JON COUCH Algeria on
Friday night.
ROBERT GREEN last night issued a G r e e n
humbling apology to England play- explained: I walked in at half- be prepared, be ready and be pre-
ers and supporters for his howler time, said sorry to the chaps and I pared just the same, wanting to
against the USA on Saturday night. apologise to however many million play. Im desperately keen to play, I
The West Ham keeper fumbled people at home as well. want to play every game I possibly
Clint Dempseys innocuous 25-yard But the important thing is you can. This is the biggest stage in the
shot to hand the USA a share of the are ready and I am willing to work world.
spoils in Rustenburg on Saturday mentally on it. It's not a problem. Green insists hes ready to undo
night. Ive done it before, Im 30 years old his mistake, adding: Ill be twice as
But he says the error will make and Ive learned to deal with these determined for this not to happen
him doubly determined to make things. again. Of course, this makes me
amends should coach Fabio The manager has to answer more determined to play next time
Capello stick with him for the sec- whether he will stick with me. Ill to right the wrong.
CITYA.M. 14 JUNE 2010 Sport | Football 35
Slick Germans
brates his goal,
Germanys second,
with team-mates.
Pictures: ACTION
IMAGES
show intent
Bastian Schweinsteiger was a booking
GERMANY 4 at best. Joachim Lows side made their
intentions known early, Klose denied
by Aussie keeper Mark Schwarzer GROUP D
TEAM PLD W D L F A PTS
AUSTRALIA 0 before Podolski rifled in the opening
on 27 minutes after another sweeping Germany 1 1 0 0 4 0 3
attacking move. Ghana 1 1 0 0 1 0 3
WORLD CUP 2010 Klose didnt have to wait long to net
his 11th goal in World Cup finals, head- Serbia 1 0 0 1 0 1 0
BY JON COUCH ing home Philipp Lahms cross before Australia 1 0 0 1 0 4 0
WHO was it who warned never to write star man Mesut Ozil missed a one-on-
off the Germans? one chance his invention deserved.
Despite the absence of the injured If the match wasnt yet ended as a
Michael Ballack, the three-time cham- contest, Cahills red card certainly did,
pions made light of their mediocre tag and the Germans exploited the extra
to give a real signal of intent in Durban space to great effect.
last night. Mueller rifled home a third off the
Lukas Podolski and Miroslav Klose post before Brazilian-born substitute
continued their remarkable scoring Cacau netted his first goal for his
records with a goal apiece before adopted country, tapping in from
Thomas Mueller and Cacau wrapped Ozils centre.
up the most impressive performance of For Australia, it was a long night, but
this World Cup so far. the Socceroos almost carved out a late
They were however, helped by the consolation they scarcely deserved
harsh 55th-minute sending off of substitute Nikita Rukavytsya volleying
Evertons Tim Cahill, whose tackle of straight at keeper Manuel Neuer.