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Issue 1,299 Thursday 13 January 2011 FREE


of highly mobile millionaires that down further on non-doms “to

BY JULIET SAMUEL would cost the UK economy more ensure they make a fair contribution
than it raised in tax receipts. to reducing the deficit”.
THE number of people registered as The Treasury said yesterday that But Deloitte director Nicole Roberts
non-doms in the UK dropped for the roughly 5,400 people have opted to said: “£162m is not that much in the
first time in five years in the 2008- pay the £30,000 charge instead of grand scheme of things. It kind of
2009 tax year, as the rich fled higher leaving, amounting to revenues of gets lost in the rounding.”
taxes and the credit crunch, figures £162m. Observers are particularly con-
show. Phil Berwick, a director at cerned about rules accompanying the
The data, obtained by a freedom of McGrigors law firm, said: “The spend- charge that make it harder to bring
information request, show that there ing power that has been lost to the UK money earned abroad into the coun-
were 139,000 people registered in the economy is surely going to be far in try.
UK as non-doms in 2008-2007, but by excess of the income gained by the Ernst & Young’s Andrew Tailby- Diamond’s BarCap is set to lay off hundreds of workers this week Picture: REUTERS
the next year that figure had fallen by Treasury.” Faulkes said: “There are onerous con-

BarCap to cut 200 UK

16,000, or 11.5 per cent. Since the General Election last year, ditions for bringing funds in even if
Experts say that the financial crisis the coalition has promised to crack it’s to invest in UK assets or business-
can only account for a small part of es.”
the fall, with the majority attributa- Chancellor George He also says that the drop is espe-

staff as revenues fall

ble to a raft of complex regulations, Osborne has seen the cially surprising because the rule
including a £30,000 annual charge changes should in fact have brought
for longstanding residents, that came
number of UK non-doms more non-doms onto the books and
into effect in April 2008. fall after he vowed to reduced the number present that the
Critics warned at the time that the make them pay more tax Treasury does not know about.
rule changes would lead to an exodus ALLISTER HEATH: P2
revenues slowing quarter-on-quarter,

despite being up overall on 2009. The
BY JULIET SAMUEL division made a loss of £182m in the

Daniels briefs colleagues as

BARCLAYS Capital will lay off two to third quarter, a dramatic fall from
three per cent of its workforce this pre-tax profits of £1.9bn in the previ-
week, with a third of the cuts to fall ous quarter.
on its London offices. The job cuts this week will mark
In all, 600 front and back office the end of a consultation period

row mounts over his bonus

staff will be given notice at the begun in December, a period man-
investment bank, with around 200 dated by UK law for any business
of those in the UK. The downsizing that intends to cut more than 100
will include several managing direc- jobs.
tors as well as junior staff. Chief executive Bob Diamond is
The bank had been expanding its also conducting a separate review of
create mischief. debate on this by the bank’s remuner- equities business over the last couple the whole bank, including BarCap,

Reports yesterday suggested that ation committee at the end of the of years, but the European division is the division he built and headed for
Daniels, who is shortly leaving the month,” they said. now thought to have reached an 14 years.
LLOYDS Banking Group chief execu- bank, will be awarded a bonus of Daniels waived his bonus last year appropriate size even as equities hir- There was speculation this week
tive Eric Daniels yesterday called sen- around £2m which will be comple- but he is not expected to want to do ing will continue in Asia. by analysts that Barclays might opt
ior colleagues together to warn them mented by a further £2m in shares the same this time around, causing 2010 was a difficult year for invest- to spin off its worst assets into a “bad
a storm was about to erupt about the that will have accrued to him as part potential embarrassment for the gov- ment banks, with many primary bank” as RBS did after the credit
potential size of his bonus. of a long-term incentive scheme. ernment. market activities such as floats put crunch.
Daniels told colleagues there was However, Lloyds sources suggested Deputy Prime Minister Nick Clegg off due to an uncertain economic cli- The idea was mooted by Rich Ricci
going to be “noise” about his possible the reports were speculative and that promised this week to do something mate. last year, currently the bank’s co-
bonus payments and he said that Daniels’ bonus payments were yet to about bonuses at the banks that were BarCap’s most recent results, for head of corporate and investment
somebody “out there” was trying to be determined. “There will be a partly owned by the taxpayer. the third quarter of last year, show banking.
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2 News CITYA.M. 13 JANUARY 2011

How a tax hike increased the deficit NEWS | IN BRIEF

Ponzi scheme man pleads guilty
A fraudster who conned more than 700
people out of a total of £14m yesterday
the UK collapsed by 16,000 in 2008-09, 2009-10 and will continue in the com- tion, so I’ve made a few guesstimates pleaded guilty to deceiving investors. He
the most recent year for which data is ing years as a result of the 50p tax rate, to work out the net cost of the tax spent the cash on holiday homes, a dia-
available, according to yesterday’s fig- the hike in capital gains tax, the extra raid. Being over-generous to the gov- mond ring and a set of City offices. Like
ures. This is a dramatic decline: an 11.6 national insurance contributions and ernment, it might be that half the the frauds of New York conman Bernie
per cent drop from 139,000 in 2007-08 the near-hysterical war on financiers missing non-doms are now full tax- Madoff, Terry Freeman’s scheme was
to 123,000. When in April 2008 Labour and myriad other attacks on wealth- payers. Let’s assume they are paying revealed when investors began to ask
– egged on by the Conservatives – creators and foreign investors that are an extra £15,000 in tax each. That for their money after the collapse of
introduced an annual levy of £30,000 now routine in this country. would make another £120m in tax, Lehman Brothers. Freeman had been
EDITOR’S LETTER for those who had claimed non-dom Not all of the decline in non-doms taking the total to £282m. Let’s then previously convicted in 1997 for finan-
status for seven years, pundits dis- can be blamed on higher taxes. Part of assume that the 8,000 missing non- cial crimes and, upon being freed after
ALLISTER HEATH missed the tax as too low to make a it will have been due to the recession. doms would have paid £50,000 each in four and a half years, changed his name
difference. City A.M. never bought this Some non-doms – those with relative- UK income tax, capital gains tax, VAT to disguise his past.
SLOWLY but surely, the real cost of the – unfortunately, we were right. ly modest foreign incomes – will have and stamp duty – the gross loss jumps
return to the politics of envy is becom- Non-doms are people who originat- decided that it simply wasn’t worth to £400m, which means that the Former Nomura VP sentenced
ing clear. Figures out last night con- ed overseas and pay UK tax on their paying £30,000 and will have opted Treasury is £118m worse off. The real Matthew Hinds, a former vice president
firmed yet again that crippling tax UK earnings but no tax on their for- instead to become regular taxpayers. loss is almost certainly much higher. of Nomura, has received a seven-year
hikes are driving people and econom- eign income. The original non-doms But many will have left – and many Once again, Arthur Laffer’s adage that prison sentence for frauds that cost
ic activity away from Britain. Rather were Greek shipping moguls who fled more who would otherwise have set- increases in tax rates can lead to a other businesses £50m. His accomplice,
than raising extra tax receipts to plug their socialist country to base them- tled here will have decided it was no reduction in tax receipts has come Ganendran Subramaniam, was given 11
Britain’s budget deficit, there is grow- selves (and their businesses) in longer worth it, especially given the true. In years to come, Britain’s short- years. The two men set up a scheme
ing evidence that the raids are actual- London. Until recently, the UK fought constant fears that the fee could be sighted stupidity will be used as a case that involved creating false documents
ly reducing the amount of money to attract such people; they pay a lot of hiked further. study in introductory economics to obtain mortgages that they used to
collected by the taxman, thus inflict- UK tax and are often employers or The Treasury told us 5,400 non- courses. In the meantime, the rest of buy London real estate. Hinds was
ing even greater debt on the rest of us. high spenders. Yesterday’s figures doms opted to pay the fee. This means us will have to pay even more tax to reported to police by his employer in
Our predicament is depressing almost actually underplay the true extent of that the taxman raised an extra plug the deficit. 2007, when Nomura was contacted by a
beyond words. the exodus: the departure of non- £162m. The Treasury wouldn’t or recipient of a false document on the
The number of non-doms living in doms is bound to have accelerated in couldn’t give us any more informa- Follow me on twitter: @allisterheath bank’s letterheaded paper.

7th Floor, Centurion House,

24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Fed: Economy
is recovering
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
US ECONOMY improved holiday season, compared

Lifestyle Editor Zoe Strimpel

Sports Editor Frank Dalleres BY JULIAN HARRIS to the previous year. RMT boss Bob Crow said talks with Secro had come to nothing Picture: REUTERS
Art Director Craig Gaymer And there was even positive news

DLR staff vote to strike

Pictures Alex Ridley AMERICA’S end of year economic for jobs growth. “Labour markets
uptick was confirmed by the Federal appeared to be firming somewhat, as
Commercial Reserve beige book last night. some modest hiring beyond replace-
Sales Director Jeremy Slattery The report, based on anecdotal ment was said to have occurred.”
Commercial Director Harry Owen accounts from businesses across the Retailers and manufacturers report-
Head of Distribution Nick Owen Fed’s regional branches, painted a ed the effects of rising global prices, yet
“positive, although still generally cau- competitive pressures prevented TRANSPORT of Serco Docklands, said he was disap-

Distribution helpline tious” picture. increases being passed onto con- pointed but hoped to defuse the
If you have any comments about the distribution BY MARION DAKERS
of City A.M. Please ring 0207 015 1230, or email “Economic activity continued to sumers. Upward pressure on wages protest: “Our aim is to resolve the cur- expand moderately from November was also reported as limited. “We take CANARY WHARF is set to endure rent issues before any action is taken
through December,” the report said. this as an encouraging report,” said another round of travel misery, after which disrupts our passengers.”
Editorial Statement “Conditions were generally said to Barclays Capital. ECONOMICS: P17 workers on the Docklands Light RMT general secretary Bob Crow
This newspaper adheres to the system of be better in manufacturing, retail, Railway (DLR) voted in favour of strike said Serco has shown “total disregard
self-regulation overseen by the Press Complaints and nonfinancial services sectors Despite Fed chairman action yesterday. for the idea of proper negotiation and
Commission. The PCC takes complaints about the than in financial services or real The RMT union said 162 staff from consultation”. The union has not set
editorial content of publications under the Editor’s Ben Bernanke’s fears,
estate.” operator Serco Docklands voted to a date for the walkout.
Code of Practice, a copy of which can be found at US manufacturing received a the US jobs market strike, with 36 voting against action The news came a day after
Printed by Newsfax International,
boost, as the beige book reported con- shows some signs of in a dispute over pensions, working Southeastern workers at Victoria and
Beam Reach 5 Business Park, tinued recovery in all districts. growth. hours and redundancies. Charing Cross stations voted to strike
Marsh Way, Rainham, Essex, RM13 8RS Retailers in all districts reported an David Stretch, managing director against station job cuts.


convertible bond of between £300m
and £400m.

Germany is backing proposals to give Nick Clegg and Vince Cable are France will urge Britain today to back STRENGTHEN YUAN expects to close an agreement with
new powers and lending capacity to demanding that London becomes deeper European integration in order US Treasury Secretary Tim Geithner the U.S. government on Friday, paving
the €440bn Eurozone rescue fund, the world’s most transparent finan- to save the euro, or face catastrophe has gone on the offensive over China's the way for share sales that could
even if that means increasing its cial centre, as the Lib Dems increase for its own economy if the currency attempts to devalue its currency. eventually enable the insurer to end
financial guarantees, according to the pressure to attach tough condi- fails. François Fillon, the Prime Ahead of next week’s visit to its status as a ward of the state.
people familiar with the issue in tions on pay disclosure to any peace Minister, told The Times that he is Washington by Hu Jintao, China's pres- Preparations for what could be the
Berlin and Brussels. Such a move deal with the banks. With defeat taking his message to David Cameron ident, Mr Geithner said the Eastern biggest stock offering in U.S. history
would be part of a package of meas- looming for the Liberal Democrats at talks in London that come after a country needs to strengthen the “sub- officially get under way on Thursday.
ures, including greater co-ordination in Thursday’s Oldham by-election, day of respite for the embattled cur- stantially undervalued” yuan because
of economic policymaking between Mr Clegg’s party is desperate. rency. “Europe finds itself at an his- it puts other countries at a competitive ORBAN VOWS TIGHTER SPENDING
the 17 eurozone members. toric turning point,” Fillon said. disadvantage. RULES
BUY-OUT GROUPS RETURN TO THE FRAY Hungarian Prime Minister Viktor
OBERTHUR MAKES BUY-OUT Private equity firms have rediscov- THE BEATLE’S HIDEAWAY, A SNIP AT DAVOS 2011: FIFTH OF ALL DELEGATES Orban, a skeptic of the European
APPROACH ered their Keynesian “animal spirits” LESS THAN £3M MUST BE WOMEN Union's authority to police members'
The prospect of Oberthur mounting in Europe, returning in force to deal- Ringo Starr’s 16-acre Aspen ranch is Political correctness has made it all budget policies, pledged to push for
a firm bid for rival De La Rue, the cri- making even though the credit crisis one of the headline acts leading the the way to the Swiss alpine peaks, it tighter spending rules and support
sis-hit British banknote printer, has is forcing them to use an unusually rebranding of Christie’s property seems. In a break from the norm that the euro as his government takes up
increased after it emerged that the low level of debt to finance their business. His Colorado estate is being will have many a Davos delegate look- the bloc's rotating presidency.
French secure technology company deals. The value of company buy-outs offered for £2.9 million through the ing forward to the apres-ski, the World “Without fiscal unity, the currency is
has approached private equity almost trebled in Europe from renamed Christie’s International Real Economic Forum (WEF) has stipulated vulnerable,” Mr. Orban said in an
groups to inject fresh capital. €18.3bn ($24bn) in 2009 to €49bn last Estate, a treasure trove of trophy that one-in-five delegates at the high- interview with The Wall Street
Oberthur has proposed issuing a year properties worth £1 million or more. profile conference should be female. Journal on Wednesday.
CITYA.M. 13 JANUARY 2011 News 3

Default retirement Crossrail chief

executive quits
age to end as state in surprise move
pension is delayed


THE chief executive of the £16bn

Crossrail project has resigned, just
months after the transport scheme’s
PENSIONS which they fear could lead to legal future was guaranteed in the compre-

BY KATIE HOPE uncertainty and a wave of employ- hensive spending review.

ment tribunals from disgruntled Rob Holden is to step down this
WORKERS will no longer be forced to employees. year, the group said yesterday.
retire at 65 under rules to stamp out CBI director general John Cridland Crossrail, one of Europe’s biggest
age discrimination published by the said the DRA was the “number one construction projects, will connect
government today in direct defiance employment regulatory issue for this Maidenhead in Berkshire with
of fierce lobbying from business year”, and is concerned its abolition Shenfield in Essex, passing through
groups to delay the measure. will result in “demeaning” perform- the West End and Canary Wharf,
The scrapping of the default retire- ance reviews to manage out older with a link to Heathrow Airport.
ment age (DRA), first proposed by the employees where their output has Holden said the company needed a
coalition government last July, will be deteriorated due to age. chief executive who can commit to
phased in from April and will mean Davey’s statement will coincide lead it right through the opening in
from October no person can be com- with the publication of the Pensions 2018. “I leave Crossrail confident that,
pulsorily retired just because they Bill outlining plans to raise the state with its funding firmly in place, a
have turned 65. pension age to 66 for everyone by 2020. robust delivery plan, clear gover-
The change, which will be unveiled The women’s pension age is already nance and a strong delivery team,
by business minister Ed Davey in a rising from 60 but after 2018, the male Crossrail is now well set to move for-
ministerial statement today, will not pension age will also begin to rise. ward to a successful launch,” Holden
require further legislation, dismaying Work and Pensions secretary Iain said in a statement.
employers groups such as the CBI and Duncan Smith will also today publish Crossrail said Holden would be
the EEF which have said they need plans to force all bosses to pay into a pen- leaving to “explore new opportuni-
more time to prepare for the change, sion for their workers for the first time. Crossrail chief executive Rob Holden is leaving just two years after joining the firm ties.”

EU plans package to
confront debt crisis
EUROZONE CRISIS The €440bn EFSF, which was cre- Feburary, with Spain and Italy

BY JULIET SAMUEL ated in the wake of the Greek both holding auctions today.
bailout, is already set to increase Spain’s sale in particular marks
THE Eurozone is preparing a “com- this year through several debt the start of a crunch period. It will
prehensive” package to confront its sales, but with Portugal on the auction €173bn’s worth of debt
sovereign debt crisis, as Spain pre- brink of a €50-€100bn rescue and this year and must keep its borrow-
pares for today’s first crucial bond investors turning wary eyes on ing costs down to avoid being sad-
sale of 2011, a year in which it must Spain, EU officials are worried that dled with unsustainable bills for
refinance a quarter of its debt. more action is needed. the future.
European Commission presi- German finance minister Meanwhile, Portugal held a suc-
dent Jose Manuel Borroso called Wolfgang Schaeuble said yesterday cessful auction of €1.25bn of long-
for Eurozone leaders to beef up the that the February meeting of the dated debt yesterday. Overall yields
region’s rescue facility yesterday, European Council would see a were down slightly to 6.7 per cent
with increased borrowing powers wide-ranging solution thrashed from 6.8 per cent in November.
thought to be on the agenda. out between leaders. Analysts suggested that the ECB
“The financing capacity must be “We can’t just solve the prob- could have been behind the drop,
reinforced and the scope of the lems over the short term -- if there but Kevin Dunning of the
activities of the European are short term problems -- but also Economist Intelligence Unit said:
Financial Stability Facililty (EFSF) over the mid-term,” he said. “ECB debt purchases will only be
should be widened,” Barroso told But Eurozone members will go able to delay, not prevent, Portugal
reporters. to the market for billions before applying for a euro area bailout.”

City responds to calls to make a

commitment to personal finance
ics and language to explain con- cial knowledge and money manage-
FINANCIAL cepts such as budgeting, tax and ment, plus a game specifically tar-
LITERACY CAMPAIGN mortgages, with electronic trophies geted to help 14-19 year olds.
awarded for completing each sec- NatWest runs a similar scheme,
BY ELIZABETH FOURNIER tion. called MoneySense, which com-
SINCE the launch of City A.M.’s Its developers are trying to get the bines online resources for cus-
Campaign for Financial Literacy yes- site accredited so that students that tomers with targeted lessons in UK
terday, the number of positive complete all the tutorials get credit schools. It has also been carrying
responses received from City firms towards a GCSE in Financial out research into young peoples’
that are already engaged in educa- Planning. attitudes to money, the results of
tion initiatives has been incredibly City A.M. also heard from Barclays, which will be out in March.
encouraging. which last year launched a Barclays Finally, this morning KPMG is
Financial planners Killik, for Money Skills campaign aimed at dis- launching its latest educational ini-
example, has been developing a advantaged 16-25 year olds. Again tiative, a fund to pay all tuition fees,
web-based tutorial known as Money based online, Money Skills offers plus a salary, to students that join its
in Mind. The site uses simple graph- downloadable guides to aid finan- degree scheme. GCSE DISMAY: P17
4 News CITYA.M. 13 JANUARY 2011

Npower to
sell power Mecom turns
to the Grid down merger

ENERGY company Npower plans to
step in to support the National Grid
during times of high energy demand
by using its customers to help power MEDIA Mecom has been conducting a

the network. BY DAVID HELLIER search for a new chief executive to
Around 50 industrial sites in the UK replace Montgomery after sharehold-
are already paid by the Grid to offer MECOM, the European regional news- ers pressed for his departure. The
their stand-by generators for national paper group, has turned down a search process has recently faltered,
use when the network is stressed, takeover approach from Trinity leading some to suggest that
most recently during the snow in Mirror, publisher of the Mirror titles. Montgomery wants to stay.
December, which led to record energy The approach, which came in a One candidate, who has had con-
usage and put a strain on services. telephone call from Trinity chairman versations with the group’s recruit-
But Npower hopes to pay customers Sir Ian Gibson a few weeks ago, ment consultants, told CityA.M: “This
who have back-up generators to add according to Sky News, was rejected has been the weirdest process. I
up to 600 megawatts to the network, by his opposite number at Mecom. would describe it as shambolic. I just
the equivalent of a medium-sized No announcements were made to did not get a good vibe about it.”
power station. the London Stock Exchange, with
“The National Grid is hoping to sup- both companies believing there was ANALYSIS l Moneysupermarket
ply more energy from renewable nothing of substance to report. p
sources like wind, which is unpre- A merger between the two compa- 88 85.00
12 Jan
dictable, especially in periods of high nies might have brought together by
demand. The nature of the grid, espe- Mecom chief executive David 84
cially as overall demand increases, Montgomery who used to head
makes it important for companies like Trinity Mirror.
us to step in,” Npower industrial and However, Montgomery has been
commercial market director David fighting a rearguard action at
Cockshott told City A.M. Mecom, with a group of shareholders 76
The National Grid declined to com- who own around 40 per cent of the
ment yesterday. Sir Ian Gibson of Trinity Mirror (left) and David Montgomery of Mecom Picture: REX group’s shares wanting him to quit. 18 Oct 5 Nov 25 Nov 15 Dec 7 Jan

Russian miner
plans LSE float


RUSSIAN coal and iron ore miner

OAO Koks said yesterday it plans to
float in London raising £400m to

expand its operations.
The Siberian based firm, which is

World deals controlled by Boris Zubitsky and his

family, plans to offer shares and glob-
al depositary receipts in the business
Fly from Heathrow in Moscow and London.
The firm said in 2009 it made a
profit of 4.6bn roubles (£96m) on
New York from £
315 sales of 27bn roubles. It added: “The
proposed IPO represents the next log-
ical step in Koks Group’s develop-
Chicago from £
345 ment. It will enable us to increase the
level of self-sufficiency in obtaining
key raw materials.”

Atlanta from £
Los Angeles from £
397 Morgan Stanley
San Francisco from £
405 fund raises $1bn
Vancouver from £

Return fares, incl taxes MORGAN Stanley Investment
Management, the asset management
unit of Morgan Stanley (MS), said its
More offers on first dedicated corporate mezzanine
fund has closed with $956m (£607m)
in capital from investors, in the

largest such launch in a year.

The fund, Morgan Stanley Credit
Fares quoted are for return flights from Heathrow, including taxes and charges, which are subject to change. Fares to New York
and Atlanta are for non-stop flights. Fares to the other featured destinations are via Detroit or Minneapolis. Book by 25/01/11.
Partners, or MS Credit, invests prima-
Travel periods vary. Fares are subject to availability. Credit card surcharge will apply. Specific booking conditions and the General rily in fixed income securities issued
Conditions of Transportation of KLM and AIR FRANCE apply. Prices correct at 04/01/11. by middle-market companies in con-
junction with leveraged buyouts, debt
refinancings, acquisitions and recapi-
To date, the fund has invested more
than $160m in five portfolio compa-
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The Capitalist
6 CITYA.M. 13 JANUARY 2011

DO AS WE Simmons &
SAY, NOT AS has retained
its top spot
WE DO, SAYS as the
EDITORS at the Daily Mirror could barely
contain their excitement at the coming of law firm
bonus season yesterday, splashing their And now, City slickers can go one better
front page on the beleaguered chief execu- in the City in showing off their provocatively plush
tive of RBS, Stephen Hester under the head- means of transport. For the modest sum of
line “Do the right thing: give up your £5,750, The Capitalist hears that one lucky
obscene £3m bonus”. fund manager can get her hands on the
“The Mirror calls on Mr Hester and all Trinity Mirror boss Sly Bailey received total compensation of £1.7m in 2009 number plate (see above): “F11ND M”
the other fatcat bankers to do the right (Geddit?). What better way to mark bonus
thing... start living in the real world – like law firms named in Stonewall’s workplace to Stonewall didn’t mention the fact that season than to roll up with this tasty label
the rest of us,” read the piece. equality index, which lists the top 100 gay- one part of the firm’s practice is affection- slapped on your Aston Martin? Get in
The Capitalist wondered if this “us” friendly employers in the UK. Simmons & ately referred to as “the pink floor”. Or per- touch at
includes Sly Bailey, chief executive of Simmons retained its top spot among the haps the fact sadly counted against them.
Trinity Mirror? Her most recent bonus in legal community for the second year run-
2009 amounted to a tidy £698,000, for total ning, with Pinsent Masons, Hogan Lovells, TALL AND TANNED . . .
compensation of £1.7m, including
£248,000 for her pension. That’s a jump of
Baker MacKenzie and Herbert Smith also
recognised in the top 50.
DITCH THE TRAVELCARD THE gloomy weather, banker-bashing and
“I’LL be taking the bus,” BBC business looming bailouts in Europe seem to be get-
£700,000 on the equivalent pay-outs the Herbies, which jumped from number 56 supremo Robert Peston posted on Twitter ting a lot of the City down this month, so
year before. to joint fiftieth in this year’s list, hosted a this week, on his way to Westminster to much so that bankers are looking for pas-
And this is despite revenues shrinking 12 ceremony at its offices to honour the report on the live grilling of Barclays chief tures new. Until now, received wisdom has
per cent to £763m and pre-tax profit plung- Stonewall index last night, after the gay Bob Diamond by a pack of MPs. “Will Bob told us that they’ll go to Hong Kong,
ing 40 per cent to £73m over the period. It’s rights lobbying group surveyed over 9,000 Diamond be taking the bus?” Peston asked, Singapore or maybe New York. But now a
no wonder Bailey isn’t keen to take a leaf lesbian, gay and bisexual employees across always first to spot the burning question of headhunter tells me that hordes are look-
out her flagship paper and up sticks to “the legal Britain. the moment. An hour or two later, we had ing to flee to Brazil after this year’s bonus
real world”. But I’ve heard that the list could raise the answer. round. “Anyone with a little pidgin
eyebrows at another City firm, which It seems that Diamond, who said during Portuguese vocabulary” is clamouring for a
prides itself on its diversity programme the Q&A that the time for bankers’ finance job near the sunny beaches and
THINK PINK and will be disappointed to have been remorse is over, was shuttled back and exotic cocktails of Rio de Janeiro, we hear.
THE Capitalist tips her hat today to the City looked over. Perhaps its official submission forth in a black cab. Time to invest in that language course.
CITYA.M. 13 JANUARY 2011 News 7

Filtrona to name new chief exec
Speciality plastic and fibre products
supplier Filtrona is set to unveil high pro-
file accountant Colin Day as its new
chief executive today.
The FTSE 250-listed company will
announce the appointment of Day, cur-
rently finance director at Reckitt
Benckiser, alongside its trading update,
according to Sky News.
Reckitt announced last October that Day
would be leaving the company, and he is
due to finish at the end of March.
Day has been an executive director and SUNDAY 23 JANUARY 2011
chief financial officer at Reckitt
Benckiser for the past decade. His prior
experience includes senior finance roles
indigO2 at The O2
at Aegis, ABB and De La Rue. He is cur- – 0844 844 0002
rently a non-executive director of WPP - 0871 230 1097 | – 0871 424 4444
The worst Australian floods for a decades have wreaked devastation and closed vital coal mines Picture: GETTY and AMEC.

Coal prices to Goodbye bottled

soar as floods water, hello T6!
reach a peak

BY JULIAN HARRIS The floods are the worst experi-
enced in Australian for a century.
TRADERS expect coal prices to rise Floods are expected to peak today,
further after the devastating floods as thousands of people are evacuat-
in Australia saw prices jump $10 ed.
(£6.40) a tonne earlier in the week. Australia is the world’s second
Both thermal and coking coal largest thermal coal exporter after
prices have risen sharply this year Indonesia, a key supplier to the coal-
due to the impact of the Australian hungry Pacific Rim.
floods, energy consultancy Wood And almost two thirds of global
Mackenzie said yesterday. exports of coking or metallurgical
Australian coal is used abundantly coal, which is used for steel making,
to produce electricity and in steel comes from Australia.
making throughout Asia. US coal is a possible replacement,
Markets in steelmaking coal yet logistical problems with
paused yesterday, but analysts are American ports and rail capacity are
predicting prices will jump to record thwarting efforts to take advantage
highs when trading resumes. of the booming prices and demand.
Thermal coal prices could reach or “The market’s had to take a
exceed 2008’s record $197 (£126) a breather but there’s no doubt as to
tonne free-on-board to Newcastle its direction with all the bottlenecks
port, when floods also caused a price around the world,” one major
spike, Wood Mackenzie said. European trader said.
Yesterday a February loading “The Queensland coal crisis is bad
South African cargo traded at $129 a news for steelmakers worldwide,
tonne, and another cargo on the DES especially for those without supply
ARA index traded at $132 a tonne. contracts in place,” said Moody’s.
Coal mining and exports have “The current metallurgical coal
ground to a halt in Queensland state price spikes could nearly double the
and Brisbane, with mines closing cost of producing a ton of steel,” the
and transport facing severe obstruc- ratings agency added.
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stockpiles below market expectations. signs the improving economy was
THREAT TO WORLD ECONOMY: P10 spurring demand for fuel.
8 Focus on Henderson takeover CITYA.M. 13 JANUARY 2011

Formica repeats his New Star trick

AND so Henderson does it again, That doesn’t mean more AUM agement fees will be lower than
picking up a once-great rival on the won’t be lost, however, even if man- Henderson is predicting (Numis
cheap (or so it says). There’s no agers representing 84 per cent of reckons £28m against management
doubt that this deal will enhance funds are making the move to the expectations of £43m).
earnings, although we think man- combined group. Henderson knows That would mean total net oper-
agement’s expectations are some- this only too well: following the ating profit after tax would be in
what over-optimistic. New Star acquisition, it lost around the region of £48m, not the £59m
Whether Andrew Formica has got 20 per cent of that firm’s AUM. to £70m range being pencilled in
himself a steal or simply paid fair Analysts at Numis think the currently.
value depends on whether enlarged group will lose 10 per cent Nor does this deal solve the peren-
Gartmore continues to shed assets. of AUM from mutual funds and seg- nial problem of fund firms relying
It’s true that assets under manage- regated mandates, and 20 per cent too heavily on star managers, leav-
ment (AUM) have held up pretty from alternatives. That would take ing shareholders in the combined
well considering the devastating AUM to £14.9bn, says Numis, which firm thinking carefully about eggs
blow dealt by the departure of is still not a disaster when one con- and baskets.
Guillaume Rambourg and then siders that City whispers had the
Roger Guy; they stood at £16.5bn at figure at £13bn at the tail-end of
the end of 2010, down from £19.9bn
at the end of Gartmore’s first half.
Still, it does mean annual man-
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CITYA.M. 13 JANUARY 2011 Focus on Henderson takeover 9

Henderson ties up
Gartmore takeover
M&A having worked closely with the plummeting share prices and

BY RICHARD PARTINGTON Gartmore team since November, a investors withdrawing funds.
source close to the deal said. Its outflows in the fourth quarter
Gartmore’s troubles began with the depar- SHARES in Anglo-Australian fund However, Henderson is said to be con- were £4.8bn, of which £3.1bn related
ture of influential fund manager Guillaume manager Henderson were up 9.26 per fident the remaining fund managers to the European large cap team for-
Rambourg in April last year. cent yesterday, after it announced it will join as the two firms integrate. merly run by Guy and Rambourg.
would buy troubled rival Gartmore. Some analysts have approached the The company’s share price dropped
The deal sees shareholders receive news with caution, warning investors by more than half from its initial 2009
two Henderson shares for every three could continue to redeem their assets flotation price over the course of last
Gartmore shares, valuing the compa- in a continuation of the troubles suf- year to as low as 88.5p per share last
ny at £335m. fered by Gartmore. week.
Around 63 per cent of Gartmore David McCann, analyst at Numis Yesterday’s takeover news saw
shareholders have so far approved the said: “The management assumption Gartmore shares lift to 103p per share.
deal, after the boards of both compa- [AUM] will stay where they are is And sources close to the deal
nies unanimously recommended a extremely aggressive. believe any risk of contagion follow-
Henderson chief takeover. “There is a whole raft of reasons ing the departure of Guy and
executive Andrew A significant number of Gartmore’s why money will continue to [walk out] Rambourg has now passed.
Formica said fund managers have been locked into the door. People don’t like uncertain- Chief executive of Henderson
the Gartmore the deal, representing 84 per cent of ty, particularly when its people han- Andrew Formica said: “The acquisi-
acquisition was the company’s assets under manage- dling their money.” tion of Gartmore is a great opportuni-
a “great ment (AUM). However, McCann rated Henderson ty for Henderson.
opportunity”. The combined team will now hold shares “hold” due to the potential lift “Gartmore has a highly complemen-
around £78bn AUM, making it one of in share price from the takeover. tary strategy and stable of products to
Picture: Micha the largest UK retail asset managers. Gartmore’s woes started after the that of Henderson. Its recent travails
Theiner/ CITY Roger Guy took over Rambourg’s assets, Three key Gartmore fund managers departure of influential fund man- should not overshadow the fact that
A.M though he departed in November last year, remain in talks over joining agers Guillaume Rambourg and Roger Gartmore is one of the best known
leading to the loss of £3.1bn assets. Henderson, despite its takeover team Guy last year, which contributed to managers in UK fund management.”


New Star lessons

● January 2011 shares fall.
Henderson purchases Gartmore in a UBS
share deal worth £335m. Both firms see ● May 2010

need to be heeded
a share price lift. Gartmore says it had seen more than
£1bn of withdrawals from the funds it
● November 2010 oversees in the wake of Rambourg's sus-
Gartmore says Roger Guy is set to retire pension.
from day-to-day management, and that INVESTMENT bank UBS led the
chief investment officer Dominic Rossi ● April 2010 talks for Henderson as sole corpo-
will resign to join another manager. Rambourg returns to Gartmore as ana- rate broker, sponsor and joint lead
arranger and joint bookrunner.
Gartmore appoints Goldman Sachs to lyst, share price leaps.

M&A employees might view this as positive Simon Warshaw head of invest-
THE TAKEOVER of Gartmore by as, they might have viewed them- carry out a strategic review. Shares in ment banking at UBS, led the deal
Henderson isn’t the first time it has selves on a sinking ship. the fund manager shed a fifth of their ● March 2010 as lead financial adviser. Warshaw
rescued a struggling rival. “Henderson have got a track record value. Gartmore suspends Rambourg as it car- has spent 24 years at UBS, and
Two years ago Henderson pur- for doing these deals… ultimately ries out an internal investigation for helped found the bank’s media sec-
chased the stricken New Star fund, that was successful but there was ● July 2010 breach of internal procedures by direct- tor group. He has featured on the
which led to 25 per cent of assets quite a long teething period.” Gartmore star manager Guillaume ing dealers to use favoured brokers. Guardian’s Media 100 list for his role
being withdrawn amid the takeover However, sources close to Rambourg quits to focus on FSA probe, Shares fall by 11 per cent. in Lord Carter’s Digital Britain
as portfolio managers departed. Henderson believe the Gartmore deal leading to further falls in share price. report. Ondra partners, the boutique
Some analysts fear Henderson should not suffer the same pitfalls. ● December 2009 set up in the wake of Lehman’s col-
could find itself in the same situation As a worse case scenario the compa- ● June 2010 Gartmore lists on the market for 220p lapse also acted for Henderson, with
with the Gartmore takeover. ny predicts 20 per cent of its assets UK financial regulator FSA says it will per share, shares sink to 212p on its mar- Michael Tory and Stewart Bennett
Shore Capital analyst Danielle will disappear as a result of the deal, launch its own probe into Rambourg, ket debut. as part of the team. Goldman Sachs
James said: “People don’t necessarily some five per cent less than at the advised Gartmore.
like the cultural change. Gartmore time of New Star.
10 News CITYA.M. 13 JANUARY 2011

Bankers vs politicians: The war isn’t over yet

now to mention at dinner parties that lor know that no responsible govern- awkward for the Conservatives. They be politically febrile. It will be some
you work in the City? ment can be in permanent war with don’t want a new bonus tax, but it had time before peace really comes, and it
There are many different sides the most profitable – and highest tax- a 97 per cent public approval rating is politically safe for politicians to talk
claiming victory, but it is undoubtedly paying – part of the economy. The and would fill a big fiscal hole. The up financial services once again.
true that most of the government chancellor crowed at the Conservative Conservatives are fundamentally free- But even then, the threat to London
wants peace to break out. Party conference that he has intro- market, but politics dictates they must as a financial centre will be far from
Certain members of the left might duced the first permanent banking boast about introducing pay controls over. Many policies damaging its com-
want a permanent war against levy. He thundered in parliament this in private companies, and tell banks petitiveness have been introduced,
VIEW FROM CITY HALL bankers, since they are such a useful week that London now has the most how much to lend. and in Brussels, where most financial
political enemy – just as Hugo Chavez stringent bonus regime in the world. It was politicians forcing banks to services regulation comes from, they
ANTHONY BROWNE has a permanent war with the
Venezuelan middle classes. With a
Aren’t the bank bashers satisfied?
The government thinks not – it
lend to causes that were morally wor-
thy but not creditworthy that led to
are unlikely to know that the war is
over. Brussels’ grip over London’s

AN we all breathe a huge sigh of politically-motivated war, no punish- wants to reach a settlement with the subprime crisis, and sparked the financial services will probably prove
relief? Has peace broken out ment is enough, because the politics banks, whereby it holds back on any banking implosion. The government to be the most profound legacy of this
between bankers and politi- won’t change. Whatever pound of new bonus clampdown, in return for must ensure the cure isn’t worse than crisis, and the one that causes most
cians? Has the government caved flesh is given, the insatiable cry would banks increasing lending to small the disease. problems in the long run.
in to the masters of the universe – or go up “we need more blood”. companies. Despite the peace moves, the com- • Anthony Browne is an adviser to the Mayor
brought them to heal? And is it safe But the Prime Minister and chancel- These are strange times indeed, and ing weeks of bonus season are going to of London.

World Forum:
face big risks

ECONOMICS Public debt in countries such as the

BY ALISON LOCK US, Ireland, Belgium and Italy is now
more than 90 per cent of GDP, a level
WORLD governments have been at which it puts a one per cent drag
drained of resources after the finan- on growth.
cial crisis and are poorly-equipped to Ageing populations, as much a
handle 21st-century global risks, a threat to China and Brazil as devel-
new study reported yesterday. oped countries, will push states far
Governments are less able to tackle further into debt. Age-related liabili-
emerging global risks such as short- ties are estimated to average 440 per
ages of natural resources, an ageing cent of GDP in developed countries –
world population and fragile states or ten times the average cost of the
dominated by illegal activity. But the financial crisis.
macroeconomic trends that precipi- Shortages of vital resources such as
tated the credit crunch are still in evi- food, water and oil will push price
dence, the World Economic Forum volatility on key commodities to new
Global Risks 2011 report said. highs, said John Drzik, chief executive
Huge fiscal imbalances between of consultancy Oliver Wyman.
indebted developed states and debt- “We are experiencing a new age of
free developing economies leave commodity price volatility and many
countries vulnerable to excessive and commodities are at all-time price
destabilising capital flows, asset price highs,” he said.
collapses and volatile currencies. Volatility has risen dramatically
These risks are “coming together in since 2005 and is set to continue as
a particularly dangerous cocktail,” supplies of corn, wheat, oil and met-
said World Economic Forum manag- als struggle to meet demand. But
ing director Robert Greenhill. Drzik also blamed financial markets
Most advanced countries are run- for the problem. “Financial specula-
ning a fiscally unsustainable position, tors will be an unpredictable source
Daniel Hofman, group chief econo- of demand, creating even more
mist at Zurich Financial Services, said. volatility in prices,” he said.


● OVERARCHING RISKS exacerbates poverty, while illicit trade
Growing economic disparity both was estimated to be an $1.3 trillion
between and within countries is making (£835bn) industry in 2009.
it harder for governments to tackle
crises, while global governance struc- ● NATURAL RESOURCES
tures are failing to manage disparate A growing world population is putting
national interests. unsustainable pressure on resources.
Demand for food, water and energy is
● MACROECONOMIC IMBALANCES predicted to rise by 30-50 per cent by
Weaknesses left in the global economy 2030. Shortages may increase commodi-
from the financial crisis, such as high lev- ty price volatility and could spark social
els of developed country debt, are creat- unrest, political instability and environ-
ing unsustainable imbalances such as mental damage.
currency and inflationary pressures
between countries. ● FIVE RISKS TO WATCH
The report tips cyber-security; demo-
● ILLEGAL ECONOMIES graphic challenges from ageing popula-
Fragile states supporting illicit trade, tions; resource security; a backlash
organised crime and corruption pose a against globalisation and renewed threat
particular risk to global stability. The from weapons of mass destruction as
deterioration in countries such as five areas that may have severe and
Afghanistan undermines rule of law and under-appreciated consequences.
CITYA.M. 13 JANUARY 2011 News 11

UK Mail blames poor weather KING’S TREASURE

conditions for profit warning

ies were delivered before Christmas, The broker cuts its earnings fore-

BY HARRY BANKS the weather meant that we incurred casts by up to 5.3 per cent for the years
additional cost in our network to hold 2011-13, and reduces its dividend per
SHARES in UK Mail dropped more and deliver consignments,” said UK share estimates by up to 4.7 per cent
than nine per cent yesterday after the Mail. for the same period.
delivery firm warned on its full-year In a note, broker Investec said: Investec, however, repeats its “buy”
profits, prompting Investec to cut its “Whilst many of the issues faced in rating, saying that: “UK Mail has a
earnings and dividend forecasts and the third-quarter are one-off in strong UK market position and is
its target price to 400p from 420p. nature, we have chosen to take a managed well operationally,” and “it
“Whilst we were able to manage slightly more cautious approach to remains in a strong financial posi-
our operations such that over 99 per our expectations for the following tion”. The shares closed 4.27 per cent
cent of our Christmas parcel deliver- financial years as well.” down at 317p.

THE King’s Speech has topped the box office in the UK and Ireland, taking £3.5m in its
first three days of release. Picturehouse Cinemas said the movie was the most sold-out
film it has screened in “many years”. The film, which stars Colin Firth (pictured) and
Helena Bonham-Carter, is leading the nominations for this month’s Golden Globe
Awards, with seven nods in key categories, including best film drama.

Earnings up at
price website
32 per cent respectively ahead of the

BY HARRY BANKS second half last year,” said the com-
pany. The group said it had cash bal-
BRITISH price comparison website ances of £36.5m and was debt free at said yester- the end of the year.
day it expected full-year core earn- Shares in
ings to be at the upper end of closed 10.86 per cent up on the
expectations after trading improved results at 85p.
across all its sectors. In a note, Numis Securities said: “We
The site, which offers services such believe that
as travel, insurance and money, said remains attractive to investors on a
trading in the fourth quarter had con- number of levels.”
tinued to be strong boosted by its
advertising campaign fronted by ANALYSIS l Moneysupermarket
comedian Omid Djalili and Labour p
politician Lord Prescott. 88 85.00
It now expects full-year revenues to 12 Jan
be in the region of £149m and adjust- 84
ed Ebitda to be at the upper end of
market expectations at around £41m.
“Trading improved throughout the 80
course of the second half of the year
in all of the group’s verticals with UK 76
internet revenues and adjusted
Ebitda approximately 13 per cent and 18 Oct 5 Nov 25 Nov 15 Dec 7 Jan

Promethean’s positive outlook

lifts stock for education tech firm
per cent to 71.25p yesterday, before

closing 4.18 per cent up at 68.5p.
INTERACTIVE education technology The shares have shed 43 per cent
firm Promethean World said yester- since the company reported slower
day it expected revenue for the full- growth in the third quarter on 28
year to be towards the top end of the October.
market view. Promethean is best known for its
The company also said it expected interactive whiteboard technology,
to increase the exceptional charge which is widely used in schools, and
related to restructuring to be taken in has won several tenders from educa-
the fourth quarter of 2010. tion authorities to supply the white-
Promethean shares climbed by 8.4 boards to classrooms across Europe.
12 News CITYA.M. 13 JANUARY 2011



Until now, it was assumed that tablet computers Cheap, relatively unsophisticated and ultra-portable Steve Jobs’ runaway success is likely to continue Steve Ballmer needs to come up with a way of
would be snapped up by consumers. But Deloitte netbooks will continue to eat away at the domi- into 2011, although he will not get the smartphone replacing desktop PC software revenues, as newer
says a quarter of sales will be corporate. nance of the desktop PC. and tablet market to himself. devices grab market share.

Firms to buy
10m tablet
PCs this year
be replaced more often.

Meanwhile, combined global sales
of smartphones, netbooks and tablets
AROUND a quarter of tablet comput- will overtake annual PC sales of 400m
ers, such as Apple’s smash-hit iPad, for the first time in 2011, Deloitte pre-
will be bought by businesses this year, dicts. “2011 will mark the tipping
according to Deloitte. point as the growth of applications for
The “big four” accountancy giant non-PC items outstrips traditional
says firms will snap up tablet devices sales and consumers embrace a wider
for their employees instead of buying variety of devices,” said O’Donoghue.
more costly PCs. The demise of the desktop PC is bad
“We predict that companies in the news for software giant Microsoft,
retail, healthcare and manufacturing which derives around 62 per cent of
sectors will buy more than 10m its revenues from sales of Windows
tablets for their staff,” said Peter and Office.
O’Donoghue, head of Deloitte’s tech- Microsoft – which has a virtual
nology practice. monopoly when it comes to operat-
O’Donoghue added the devices ing system software for the desktop
were attractive because of their ease PC – can’t expect the same kind of
of use and longer battery-life dominance on new devices, Deloitte
However, he said firms could be hit said, with tough competition from
by hidden costs, as tablets – which are the likes of Apple and Google.
less robust than PCs – would need to THE BEST SLIMLINE LAPTOPS: P24


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“I don’t own an iPad – I don’t know what they offer me
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lar is a lovely piece of kit. But it doesn’t have a stan-
dard interface to use Windows products or even a
keyboard, so it’s no good for work.”
“I have an iPad, but it’s purely for personal use. It seems
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14 News CITYA.M. 13 JANUARY 2011

Airbus seals $15bn

BAA said its costs
were spilt between
having to pay for
accommodation for

Indian plane order

passengers and lost
airport charges
from airlines

Picture: PA

expansion into emerging markets as

traditional markets falter.
AIRBUS basked in the world’s biggest It also gets an early blow in for
commercial plane order yesterday, Airbus in the annual battle with US
with shares in parent EADS lifted by rival Boeing for sales supremacy.
news of its $15.6bn (£9.9bn), 180-air- Airbus has so far reported 388 net
craft deal with Indian airline IndiGo. plane orders up to the end of
The agreed purchase underlines November, or 440 before adjusting
India’s development as a major avia- for cancellations. It delivered 461
tion market and provides a welcome planes in that period.
boost to EADS chief executive Louis EADS shares closed up 2.1 per cent
Gallois, who has been pushing to €20.20 in Paris trading yesterday.

Airport snow
chaos costs
BAA £24m
per cent was caused by lost revenue

BY MARION DAKERS from cancelled flights.
British Airways, Heathrow’s largest
AIPORTS operator BAA said yesterday airline by number of flights, said last
its handling of the heavy snowfall in week it had lost £50m throughout
December will cost the firm at least the eight days of snow-stricken servic-
£24m in lost revenues and added costs. es.
This figure could rise as airlines Passenger numbers at BAA’s six UK
including Virgin Atlantic, Lufthansa airports were down 10.9 per cent to
and BMI pressure the company to com- 7.2m in December compared to last
pensate them for cancelled flights and year, which the firm said was almost
widespread disruption, mainly at entirely due to the weather.
Heathrow. Its annual passenger figures fell 2.8
“Anyone who says we don’t have the per cent to 103.9m, as industrial
financial incentives to do the right action and volcanic ash disruption
thing for passengers can see the led to more cancelled flights.
extraordinarily painful cost to us,” said Shares in BAA’s parent firm,
BAA chief executive Colin Matthews. Spanish-based Ferrovial, closed three
He declined to comment on Virgin per cent up at €7.95 (£6.61).
withholding its airport fees until at
least March because of BAA’s perform- ANALYSIS l Ferrovial
ance during the snow storms. €
Matthews forfeited his bonus and 8.4 7.89
12 Jan
set up an enquiry into BAA’s handling
of the travel chaos at the end of 8
December, which is due to report in
March. 7.6
BAA said around 40 per cent of its
£24m hit came from supporting 7.2
stranded customers, with most of the
money spent on emergency accommo-
dation. Most of the other 60 18 Oct 5 Nov 25 Nov 15 Dec 6 Jan

ANALYSIS l How the snow hit BAA

from cancelled flights

extra costs, mostly £10m
from looking after withheld fees from
stranded passengers Virgin Atlantic £10m
on extra snow

CITYA.M. 13 JANUARY 2011 News 15

Barratt sales
Barratt chief execu-
tive Mark Clare NEWS | IN BRIEF
said house sales
during autumn
were disappointing Fenner rises on positive forecast
Polymer manufacturer Fenner’s stock
closed 9.02 per cent up yesterday fol-

hurt by lack lowing a positive trading statement

from the company, which makes convey-
or belts. The shares closed at 386.7p, up
from 354.7p the previous day, as the
company reported an increase in first-
quarter profitability and forecast further


progress in the second quarter. The
firm’s chairman, Colin Cooke, is due to
step down in March this year.

EU gives approval to Sanofi bid

French drugmaker Sanofi-Aventis won

European Union regulatory approval yes-
PROPERTY constraint on market growth in the terday for its hostile $18.5bn (£11.7bn)

BY MARION DAKERS near term,” the company said. We are expecting a much better six months ahead, takeover bid for US biotech firm

However, Barratt said its operating Genzyme, saying the deal would not
HOUSEBUILDER Barratt Develop- profit had seen significant improve-
with more points of sale and improved margins. Barratt isn’t reduce competition in Europe. Sanofi has
ments said sales fell 4.4 per cent in ment, with operating margins massively out of step with other property firms. offered $69 a share – or $18.5bn – to
the last six months of the year, a loss increasing to five per cent compared acquire Genzyme, but the price has been
the company pinned partly on the to 2.4 per cent a year ago. rejected by Genzyme chief executive
lack of mortgage lending. The company has shifted focus LUCIAN COOK | SAVILLS Henri Termeer as too low.

Chief executive Mark Clare said towards building houses rather than
house sales during autumn were dis- flats and increased its land bank in Uniq figures up despite snow
appointing, as potential customers the south east, which has helped Barratt is right to be cautious, as we continue to see Convenience food maker Uniq has

were also deterred by the govern- push the average selling price up six a lower transaction market. Its efforts with Hitachi to pro- announced that its Christmas trading
ment’s spending review and later by per cent to £176,000. vide mortgages will help access more markets. was close to expectations despite bad
the icy weather. It also announced a tie-in with weather. It also said that talks were con-
“It is important we get ourselves Hitachi Capital to offer mortgages for tinuing over a restructuring of its pension
going as fast as we can with those parents helping their children to RACHAEL WARING | PANMURE GORDON scheme and a new banking facility. The

sales in the next selling season,” Clare raise deposits for their first homes. company is in discussions with the pen-
said yesterday. Barratt hopes to open 110 new sites sions regulator and its main trustee over
“Mortgage lending remains at in the first half of 2011, but warned We are factoring in no volume growth in the next its proposed deficit-for-equity swap. Uniq

unusually low levels and we view this that volume growth will likely be lim- had a pension deficit of £436m at the
restricted availability of mortgage ited, due in part to difficult condi- half, with improvement in profitability driven by continued end of March 2009, and was under
finance as continuing to be the key tions for buyers. improvement in net margins from new land. threat of being wound down.

Asda to sell 47 Credit Suisse lights LIGHT POOL EXPLAINED

of Netto UK Q. WHO IS LIGHT POOL AIMED AT? launched a platform Q&A

up equity markets
called PSX last

shops to rivals A. Light Pool is aimed at long-term

investors who want to post visi-
ble trade queries without falling
October, but this priori-
tises large block trades, so favours
high-frequency traders over those
prey to opportunistic traders that looking for a long-term investment.
can operate on the traditional


ASDA, owned by Wal-Mart, has agreed CREDIT Suisse is testing an innovative
affected by opportunistic high-fre-
quency traders. The investment bank Q. WHO CAN TRADE ON LIGHT
POOL? A. Light Pool has been beta-testing
among selected clients since 20
to sell 47 of the stores it plans to buy
from Netto UK to rivals including
Morrisons and Iceland in order to win
Light Pool trading platform in the US,
and wants to create a new market for
long-term institutional investors
has been developing the platform for
close to a year, and is optimistic that
it will attract a large amount of liq-
A. Anybody will be able to trade on
Light Pool, but every client will
be scored by a formula and can be
December using just one stock –
General Electric. It will be rolled out
across all stocks by the end of March
regulatory clearance for the deal. when it launches fully in March. uidity once it’s rolled out across all forced to leave. This would happen if this year.
Asda has already lined up buyers The platform offers an alternative stocks. a statistical analysis of a client’s
for 25 of the stores, the Office of Fair
Trading (OFT) said yesterday. The OFT
to both traditional exchanges and to
dark pools, where large trades can be
“Clients want to be able to interact
with similar-minded long-term
trades showed that markets were
consistently moving in its favour in Q. WHERE
said Asda had to do this before it
would clear the Netto deal.
executed anonymously.
Credit Suisse is responding to
investors,” Credit Suisse’s director of
advanced execution services, Dmitri
the short term after a trade.
A. The US has 13 official stock
exchanges, three electronic
Danish conglomerate A.P. Moller-
Maersk agreed last May to sell the
demand from its institutional cus-
tomers to be able to trade on a market
Galinov, told City A.M.
Credit Suisse already runs the Q. ISAVAILABLE
communications networks, and
more than 40 dark pools. The
British arm of its Netto discount food
stores to Asda for £778m.
where they can post a visible buy-sell
query without being negatively
biggest dark pool in the US, known as
Crossfinder. A. Not specifically aimed at long-
term investors. Nasdaq OMX
largest, Cross Finder, is also operat-
ed by Credit Suisse.

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16 Consumer News CITYA.M. 13 JANUARY 2011

SuperGroup in Xmas boom N Brown upbeat despite

tioned the rising costs in an interim growth would have approached 100
hit from snowy weather

trading statement. per cent had it not been for disrup-
BY HARRY BANKS Retail sales in the final two months tion caused by December’ s snow.

SHARES in SuperGroup, the firm of last year rose by 94 per cent to SuperGroup was launched in 1985 RETAIL would be delivered on time.”
behind the Superdry fashion brand, £51.7m against a year earlier, while and has 59 stores under its Superdry It said there was also a backlog of
jumped more than 19 per cent yester- wholesale sales increased by 78 per and Cult brands, as well as 69 conces- MAIL order clothing firm N Brown mail to clear as a result of those
day after the company reported its cent to £13.4m. sions. The company listed on the saw like-for-like sales lifted by just 1.2 weather conditions, with catalogues
best ever Christmas trading. Chief executive Julian Dunkerton stock exchange last March. per cent over Christmas as the poor and statements delayed in the last
For the nine weeks to 2 January, said: “This performance demon- Altium analyst Philip Dorgan said weather took its toll. four weeks. Online sales increased by
total sales almost doubled to £65.1m strates the strength of our brand and the performance had restored faith Total group revenue increased by 26 per cent to account for 47 per cent
from a year ago. the loyalty of our customers. As a in the business after the “total cock- 4.6 per cent in the 19 weeks to 8 of group sales.
The company said it had managed result of negotiations with our sup- up” at its interims: “These sales num- January and Brown says trading was The Marisota and Jacamo brands.
to counter the impact of rising cotton pliers and selected price increases, we bers should go some way to encouraging from late October to performed well the firm said.
prices and its profit margins would have largely mitigated the rise in cot- reassuring the market that the bub- mid-December “but the extreme Chief executive Alan White said
not be affected this year. ton prices and there will be no impact ble has not burst yet,” he said. weather conditions eventually affect- despite the weather wiping off up to
Last month, Supergroup shares to our 2011 gross margins.” The shares closed 226p higher at ed customers who were concerned £3m in sales the company was well
slumped after the company men- Dunkerton said its overall sales 1,390p yesterday. whether their Christmas orders placed to make up the ground.

Greggs in
Sainsbury’s boost from
sees record mince pies
festive sales

GREGGS, the high street bakery, sold
eight million mince pies over the
Christmas period – up 16 per cent on
the previous year.
had helped to boost sales, with free The group, which has almost 1,500

range turkey sales up 30 per cent and shops, said shoppers who were kept
smoked salmon up 10 per cent. indoors by the snow hit the high
J SAINSBURY reported its best ever Meanwhile, the 700,000 sq ft of streets to do last-minute shopping.
Christmas sales as customers new shop space opened over the peri- Sainsbury’s chief executive Justin King is upbeat for 2011 Picture: Micha Theiner/ CITY A.M For the five weeks to 8 January total
splashed out on more expensive od also contributed to the sales lift. sales rose 3.5 per cent.
ranges over the festive period. King added: “This was our 24th SAINSBURY’S SALES | WHAT HAS FLOWN OFF THE SHELVES Same-store sales rose 0.6 per cent,
The supermarket group, which this quarter of like-for-like sales growth. the company said.
month overtook Asda as the second We are well placed to make contin- Greggs also reported a 26 per cent
largest supermarket in the four week ued good progress in 2011.” Taste the increase in sales of coffee over
run-up to Christmas, said in a trading The retailer said sales of its non- Difference Christmas.
statement yesterday that like-for like food goods were rising three times prosecco Chief executive Ken McMeikan
sales for the 14 weeks to 8 January faster than food sales. Sainsbury’s said: “I am very pleased with both our
were up 3.6 per cent. Clothing ranges showed good sales up Winter record Christmas week sales and our
Sales were up 5.4 per cent includ- growth, with lingerie and clothing 1,708% Cookbook new shop opening programme, par-
ing fuel purchases, with 900,000 new accessories in particular performing ticularly considering how difficult
customers shopping at the supermar- well, with sales up more than 45 per nearly 100,000 the trading conditions on high streets
ket every week over the period. cent on last year. copies sold were in the run-up to Christmas.”
Sainsbury’s said it had thrived Home and electrical goods are also He said Greggs would meet expec-
despite dire weather with 12,000 rising, Sainsbury’s said. tations for the full-year despite the
tonnes of salt used to make its stores snow.
accessible even in the worst condi- ANALYSIS l Sainsbury Norfolk Black In the coming year it expects to
tions in the lead up to Christmas. p 382.00 Woodland free open another 80 stores creating up to
Chief executive Justin King said: 390 12 Jan range turkeys 700 jobs.
“You just have to get on with it and McMeikan added: “I can’t speak
provide the best for customers. There 380 sales up 30% highly enough about our people both
is no doubt the snow had an impact, for the smooth handling of our
but if you lie back and become a vic- 370 Taste the expansion programme and for the
tim to the snow, then you’re not Difference Oak remarkable dedication that they have
doing what we’re here to do. Some 360
Shrek 4 shown.”
[retailers] did better than others.” DVDs smoked salmon In recent months the company has
He said the £1bn relaunch of the
18 Nov
177,000 copies sold sales up 10% seen sales helped by its breakfast
chain’s Taste the Difference range 11 Oct 29 Oct 8 Dec 30 Dec deals.

Restaurant Group lifts profit target as Hobbs bags £14m of new

it targets new openings to fuel growth investment from backer 3i
“Turnover for the final part of The company has had a difficult ment buy-outs of the chain.


November and the first four weeks of year after the volcanic ash crisis hit The retailer has also appointed
December was impacted by the sales in the 40 restaurants it owns in FASHION retailer Hobbs has received Loraine Woodhouse, the former
RESTAURANT Group has forecast full- unusually harsh weather conditions airports. The World Cup also took its a new £14m investment from 3i, its finance director of Capital Shopping
year profit just ahead of market esti- experienced throughout the UK, toll as football fans ate in pubs rather majority shareholder, and appointed Centres, as finance director.
mates as better-than-expected trading although since then trading has been than restaurants, to watch the games. former Maximuscle chairman Iain Nicky Dulieu, Hobbs’ chief execu-
at its new sites offset the impact of very strong,” the company said. Restaurant Group, which is target- MacRitchie as its new chair. tive, said that the fresh funding will
heavy snowfall in the UK. Northern Europe’s big freeze ing 22 to 27 new openings in 2011, The retailer said that total sales provide capital for the development
The company, which owns the wreaked havoc and disrupted busi- said it expected tough economic con- since February 2010 have increased by of its trio of brands – Hobbs, NW3 and
Garfunkel’s and Frankie & Benny’s nesses after extreme weather condi- ditions to continue. 12 per cent. Limited Edition. Since the launch of
chains, said revenue for the 53 weeks tions across the continent forced Analysts on average expect the The move will also see former Asda its autumn-winter collections Hobbs
to 2 January was seven per cent ahead people to stay indoors especially dur- company to post a pre-tax profit of executive Tony Campbell step down has sold more than 60,000 coats
of 2009, while like-for-like sales fell ing the important Christmas trading £55.2m, on revenue of £465.1m for from Hobbs after eight years, during across 68 styles and 30,000 boots in 60
one per cent. season. the year to 31 December. which time he oversaw two manage- styles, the retailer said.
CITYA.M. 13 JANUARY 2011 Economics 17

US budget gap narrows

Industry growth in Eurozone to $80bn for December

EUROZONE ECONOMY “The industrial sector will have economy remains extremely positive
BY JULIAN HARRIS made a decent contribution to as official figures showed a 3.6 per
Eurozone GDP growth in the fourth cent uptick in GDP growth for 2010.

INDUSTRIAL production rose across quarter of 2010,” said Howard Archer The boom represents the sharpest US ECONOMY A Treasury official said there were
the Eurozone in November, it was of IHS Global Insight. annual growth rate since German a number of unusual factors that
announced yesterday, on a day of In France, industrial production reunification. THE United States posted an $80bn affected the deficit comparison with
good economic data for the single jumped 2.3 per cent after strike The rapid recovery follows the pre- (£50.7bn) budget deficit in December, the prior year. For example, the
currency area. action affected October’s results. vious year’s slump, when the German slightly smaller than economists had department pulled some spending
Production increased by 1.2 per Meanwhile, there were also month- economy contracted by 4.7 per cent. expected, Treasury Department data intended for January 2010 into
cent on the previous month, a far ly gains in Italy (1.1 per cent) and And the upturn may have been showed yesterday. December 2009 to work around the
greater jump than had been expected Spain (1.2 per cent). even sharper if not for harsh winter The December deficit was narrow- timing of the New Years Day holiday
by economists. Germany experienced a surprise conditions towards the end of the er than December 2009’s gap of which created a three-day weekend.
The annual rate of production fall, dropping 0.7 per cent on the pre- year. Growth in the fourth quarter $91bn. The government has now Receipts rose to $237bn in the lat-
growth rose from 7.1 per cent to 7.4 vious month, although 11.4 per cent probably slowed to around 0.6 per posted a budget deficit for 27 straight est month, up from $219bn a year ear-
per cent, as the euro area looks to year on year. cent, compared to the third quarter, months, the longest streak on record, lier. Outlays rose to $317bn from
recover. And the outlook for the German according to ING’s Carsten Brzeski. the Treasury Department said. $310bn in December 2009.

Credibility risk
Rising export CITY A.M. | SHADOW MPC
“The recovery is still on track, despite the effects of December’s
places pressure
markets give winter freeze. With inflation set to hit four per cent in the com-
ing months, rates must be normalied before it is too late.”
“Raise by 0.5 per cent. A rate hike last summer would have boost-
ed sterling, capping inflation expectations and discouraging pass-
on BoE’s King

morale boost

through of input cost and tax increases – thus tempering inflation.”
BALLOONING global prices and stub-
bornly above-target inflation in the
GEORGE BUCKLEY | DEUTSCHE BANK UK are piling pressure on the Bank of
“Mixed economic news means it is too early to raise rates, but England’s rate setting committee to
the ongoing recovery and higher than expected inflation means tighten its monetary policy.
that further policy easing would be inappropriate.” The Monetary Policy Committee
(MPC) makes its latest announcement

UK ECONOMY continues to thrive. on interest rates at lunchtime today.

BY JULIAN HARRIS “The growth in export volumes “Inflation will soon have to be taken seriously, tackled first The MPC is expected to hold rates
was broadly based,” said Simon Hayes through ‘open mouth’ operations and then, around the summer, by at the historically low 0.5 per cent, yet
BRITISH exports rose by 4.1 per cent of Barclays Capital. raising rates and withdrawing part of the emergency stimulus.” expectations are beginning to rise of
(£0.9bn) in November, official data “Buoyant export growth was rate increases in coming months.
showed yesterday, as a separate sur- reported for basic materials and both Overnight index swap (OIS) rates
vey revealed buoyant confidence finished manufactured and semi- VICKY REDWOOD | CAPITAL ECONOMICS now point to a rates rise in the third
among exporting companies. manufactured goods,” he added. “The continued rise in inflation is almost all due to temporary quarter of this year, and an increase
Overall the UK’s trade deficit The consistently high level of factors, so there’s no need for a panic rate hike. I’d keep rates to two per cent by the end of 2012,
edged upwards to £4.1bn, but only imports could also be interpreted as a and QE unchanged, but keep a close eye on pay growth.” Capital Economics reported.
because of rocketing oil prices and sign of domestic demand holding British consumer price index (CPI)
erratic items, the Office for National strong, some analysts said. TREVOR WILLIAMS | LLOYDS TSB inflation is forecast to hit four per
Statistics (ONS) said. And confidence among exporters “Rate should be held. Rising inflation is due to relative prices (VAT,, cent in the first quarter of this year,
Excluding these elements, exports for this year’s prospects remains commodities) that will drop out; the real story is that the UK according to ING bank, double the
rose by 3.4 per cent on the previous extremely high, according to a survey economy is weakening and further loosening might be required.” Bank’s two per cent target.
month, while imports increased just conducted by Travelex. Last week global food prices hit a
0.3 per cent. Well over half – 65 per cent – of record high, according to the United
Exports beyond the EU were slight- respondents expected their export HOWARD ARCHER | IHS GLOBAL INSIGHT Nations, while petrol prices in the UK
ly down in the three months to activity to increase in 2011, the sur- “Inflation and rising expectations are a concern, so a rate hike are approaching £1.30 a gallon.
November compared to the three pre- vey said. may be needed soon to protect BoE credibility. But I would not Despite worldwide prices pressures,
vious months, but still up on the And 59 per cent expressed confi- act yet given growth headwinds and the recent VAT rise.” inflation in the UK is considerably
same time in 2009. dence in current economic condi- higher at 3.3 per cent than the cur-
“Exporters must reinforce their tions, while three quarters “clearly JAMIE DANNHAUSER | LOMBARD STREET RESEARCH rent Eurozone average of 2.2 per cent.
efforts to move into fast-growing rejected” any chance of a double dip “Manufacturing is booming, but snow disruption has made it The MPC should respond by imme-
emerging economies such as India recession. unclear how the rest of the economy is faring. Some withdrawal diately nudging rates upward, former
and China,” said David Kern of the However, importers are concerned of stimulus will be needed this year but that time is not yet here.” senior Treasury official Sir Steve
British Chambers of Commerce, com- about the impact of this month’s VAT Robson said this week.
menting on the figures. hike, said David Sear of Travelex. Failure to act endangers the Bank’s
Goods and services exported to One respondent to the survey com- GRAEME LEACH | IOD credibility by arousing suspicions
Germany increased by 10 per cent mented: “Tax hikes suppress business “Maintain the status quo for another month in order to assess that inflation is being allowed to rise
over the same period, according to motivation, because the more money the impact of the VAT rise. But the latest money supply figures to erode the value of the govern-
Goodwin, as the German economy you make, the more tax you pay.” suggest that there is a growing case for more QE.” ment’s debts, Robson said.

Concern for workforce quality after new NEWS | IN BRIEF

Yuan to be traded freely in US
league tables show low school standards
pay growth, is bad news for UK house-
Americans will soon be able to freely holds,” said Vocalink boss Marion King.
trade the Chinese yuan, after a bank
owned by the Chinese state announced it Tax hikes worry small businesses
would be allowed for the first time. And While severe winter weather had a nega-
the move is just one step towards full tive impact on business last month, the
freeing up of controls on the currency, increases in fuel duty and VAT pose a

EDUCATION An estimated 216 state comprehen- While over half of students achieve according to a spokesman from the Bank stronger threat to small British compa-
BY JULIAN HARRIS sive schools are failing to meet the at least C grades in just English and of China. nies, according to a snap poll by the
new government’s target, and face mathematics, far fewer, 16 per cent, Federation of Small Businesses released
BUSINESS leaders expressed concern the risk of closure. pass the wider measure. Real wages down across sectors yesterday. Around 39 per cent said that
at the standard of education yester- The new measures show how many “The coalition government has Pay growth remained below inflation in the rise in fuel duty will have a significant
day, as figures revealed that one in six pupils are gaining at least a C grade made a strong start in its education both the commercial and government impact on their business.
students failed to meet new “English in GCSE English, mathematics, sci- reform agenda with a welcome sectors last month, a survey revealed
baccalaureate” standards. ence, history or geography, and one emphasis on teaching standards, the today. Pay in December increased by just Green shoots for Japan recovery
“This is very worrying and under- foreign language. extension of autonomy, and improv- 1.1 per cent in both sectors, combined to Economic conditions improved in Japan
lines the continuing need for radical The inclusion of a foreign language ing attainment in the basics,” said the same time in 2009, according to the last month, according to the Economic
reform in education,” said Miles is an initiative by education secretary Templeman. VocaLink index. “Eleven months of elevat- Watchers Survey released yesterday.
Templeman of the Institute of Michael Gove, as he hopes to spark a “Today’s figures illustrate the scale ed inflation and another VAT hike, com- However, a measure of bank lending
Directors. revival in language learning. of the challenge,” he added. bined with a sharp drop-off in take home dropped by 2.1 per cent year-on-year.
18 News CITYA.M. 13 JANUARY 2011

Corporate sales boost Sodexo Cliffs pays £2.64bn for

“While the economic climate the public sector in Europe and
Consolidated Thompson

causes us to continue to be cautious, Britain,” he said.
BY HARRY BANKS we reaffirm our objectives for the Sodexo manages canteens and
FRENCH caterer Sodexo kept its 2011 current fiscal year and the medium facilities for office workers, armed pointing to the proximity of the two

goals for higher sales and profits, term,” chief executive Michel Landel forces, schools and prisons, and pro- companies’ Quebec operations.
despite North American unemploy- said. vides vouchers for meals and gifts. CLIFFS Natural Resources has agreed Cliffs will pay C$17.25 a share for
ment, a struggling public sector in Landel said that Sodexo had seen a to buy Canada’s Consolidated Consolidated Thompson, which has
Europe, and rising food prices that “slight uptick” in food prices and ANALYSIS l Sodexo 52.22 Thompson Iron Mines for C$4.07bn about 236m shares outstanding.
make the economic climate chal- was budgeting food inflation of € 12 Jan (£2.64bn), aiming to expand its capac- Consolidated’s largest shareholder
lenging. around three per cent this year, 53 ity to feed Asia’s appetite for iron ore. has accepted the offer.
The world’s second-biggest cater- expecting to pass “some of it” to its The Cleveland, Ohio-based iron ore The price represents a 29 per cent
ing services company after Britain’s clients. 51 and coal miner said it wants to be premium on Consolidated’s close on
Compass Group posted a 10.5 per He said that the pipeline for new able to cater to booming markets like the Toronto Stock Exchange. The deal
cent rise in fiscal first-quarter sales contracts was “very strong” in China and India that are undergoing price, including assumed debt, comes
yesterday. healthcare in North America but rapid urbanisation. to C$4.9bn, Cliffs said.
Sodexo benefitted from improving that the public sector was still strug- “It was just a matter of time as to The deal could expand Cliffs’ pro-
demand from corporate clients in gling in Europe. 47 when Cliffs would step in to buy jected 2011 North American ore sales
Europe and North America, and “We are seeing continued soft- Consolidated Thompson,” said by more than a quarter to about
buoyant emerging markets. ness in education and healthcare in 18 Oct 5 Nov 25 Nov 15 Dec 4 Jan Stonecap Securities analyst Gary Hon, 34.5m tons.


ANALYSIS l British Airways
ANALYSIS l Mitie Group
p 233.30
12 Jan
12 Jan

$2.16bn sale
300 240
12 Jan 1,200

280 220

of Nan Shan
260 200 1,120

18 Oct 16 Nov 6 Dec 24 Dec 18 Oct 16 Nov 6 Dec 24 Dec 18 Oct 16 Nov 6 Dec 24 Dec


Citi rates the airline a “buy” with a target RBS reiterates its “buy” rating on the out- S&P Equity Research rates the drinks
price of £3.75, but marks it high risk ahead sourcer with the view it will deliver double maker “buy” and has upped its target price

Taiwan stock exchange. of the launch of its new post-merger hold- digit organic sales growth again this year. to £13.50 from £12.10 on expectations of
BY HARRY BANKS “Ruen Chen offers strong opera- ing company, International Consolidated The company is pursuing European expan- good first-half results out next month and
AMERICAN International Group (AIG) tional and funding capabilities and Airlines Group, on 24 January. The broker sion plans more aggressively now, and a more sales growth over the coming half.
has accepted a $2.16bn (£1.38bn) cash possesses a clear ability to satisfy the
offer for its Taiwan Nan Shan Life strict criteria that governed AIG’s bid says BA’s risks look manageable, while cost recent contract win supports views that it First-half forecasts – to January 2011 – are
unit from a group led by local con- review process,” said Robert synergies and growing demand for first can secure more deals in coming months. for 5.6 per cent EBIT growth and 2.6 per
glomerate Ruentex, marking the Benmosche, AIG president and chief class travel will benefit the group. RBS’s target price is set at £2.70. cent organic revenue growth.
beginning of the end of a drawn-out executive.
political process. AIG had a deal worth $2.15bn last
AIG has been trying to sell the unit year blocked by the regulator, citing To appear in Best of the Brokers email your research to
for 15 months as part of its plans to concerns about the previous bidders’

Sky Deutschland rises on subs growth

pay back the US government for its industry experience. That forced AIG
$180bn bailout, but regulatory issues to put the asset back on sale and
have dogged the sale process and may prompted Benmosche to personally
still delay it further. visit the regulators in December to
The buyer group, called Ruen Chen discuss the sale.
Investment and comprising Ruentex But there are still worries that
Industries and shoemaker Pou Chen, Ruentex, a major player in the hyper- 2010, the company said net customer to the increase.

signed a deal yesterday for the 97.57 market business in China and additions rose to 131,000, compared The Munich-based company has
per cent of Nan Shan that is for sale, Taiwan, may not meet all of the five LOSS-MAKING pay-TV broadcaster Sky with 39,000 in the year-earlier period, said it needs around 3m customers to
Ruentex said in a statement to the criteria the regulator has laid down. Deutschland reported a big jump in pushing up the total number of sub- break even.
Ruentex chairman Samuel Yin has subscriber growth in Germany, send- scribers to 2.653m. Its shares surged 27.1 per cent to
AIG president and owned and run insurance and asset ing its shares to a one-year high. It made no change to its forecast close at €2.35, after reaching a one-
management businesses in the past, The company, in which News for a core loss in 2011. year high earlier in trading.
chief executive Robert but has since sold them at a profit. Corporation owns a 49.9 per cent Chief executive Brian Sullivan, who The company also said News Corp
Benmosche said the The regulator, seeking a long-term stake, has suffered from sluggish took the helm at the company in fully backstopped an increase of gross
bidder satisfied AIG’s stable owner, in general does not growth because of Germans’ reluc- April 2010, said yesterday that a bet- proceeds from financing measures to
strict criteria approve of buying assets just for tance to pay for premium TV content. ter understanding by customers of €400m (£332m), up from a minimum
resale. During the last three months of Sky Deutschland’s products had led of €340m announced last August.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

Macquarie Bank International and of South Africa, and head of African Eurozone markets.
SocialGO Access Bank UK, and is chief executive equities.
SocialGO, the AIM-listed developer and of Finance Pronto. Threadneedle
provider of software for social network build- He was formerly a managing director Rabobank Asset manager Threadneedle has
ing, has appointed Alex Halliday as its new at AMP, and is a qualified accountant The Dutch-headquartered bank has appointed Matthew Cobon as a fixed
chief executive. and lawyer. appointed Richard McGuire as a senior income fund manager in its developed
At 25 years old, Halliday is the youngest fixed income strategist in its global government and currency team, which
chief executive of an AIM company. The com- Renaissance Capital financial markets group in London. He is led by Quentin Fitzsimmons.
pany has also made Dominic Wheatley execu- Renaissance Capital has hired a new will join from RBC Capital Markets,
tive chairman of its board, and Ian chief executive, Clifford Sacks, to run its where he led the Eurozone and UK rates Harris Williams & Co
Livingstone has taken on a non-executive African operations. Before starting at strategy team for six years, prior to In yesterday’s paper City A.M. reported
director role. Renaissance Capital in early 2010, which he was a lead analyst at Dun & on the appointment of Julien Darmon
Sacks worked for 12 years at Merrill Bradstreet. as managing director at Harris Williams
Lynch, becoming co-chief executive of Richard will report to Jan Lambregts, & Co. Though the company was
Monetise director and chairman of the firm’s the bank’s Africa operation in 2006. who is global head of financial markets described as a US law firm in the arti-
Tim Wade has been appointed to the audit committee. Wade holds independ- He will continue his current role for research, and will lead a small fixed cle, it is actually a mid-market invest-
board of Monetise as non-executive ent non-exec roles on the boards of Renaissance Capital as chief executive income strategy team focused on the ment firm.

To appear in CITYMOVES please email your career

updates and pictures to
Wealth Management

The fees you need to watch out for

With interest rates
so low, investors
need to be trained
to spot extra costs



T A TIME when interest rates are low
and many asset classes are strug-
gling to post a positive return, fees
can have a significant effect on your
long-term investment returns. Current esti-
mates from the Financial Services
Authority put the total expense ratio (TER)
incurred by investors at around 3 per cent
per year. This means that your investments
need to make at least 3 per cent before your
wealth starts growing.
There are a number of different fees that
can be charged to clients and the most
common are listed below. Every fee a client
pays reduces longer-term account perform-
ance. In the current environment it seems
unusual that banks do not provide com-
plete transparency regarding all fees and
charges. Here’s what you need to ask every
time you think about purchasing a finan-
cial product to make sure you aren’t being

MANAGEMENT FEES Is that a transaction to make sure you understand how it is cal- sional investors typically do not pay front- RETROCESSION AND REBATES FEES
This is the most common fee charged by fee on the horizon? culated. loaded fees. They can be anything from 0.5- These are very common in the financial
banks and hedge funds and it is levied in l Questions to ask: What is the benchmark 5 per cent of the initial investment and are industry. Essentially, an investment manag-
return for providing investment decisions. Picture: GETTY (absolute or relative)? Is any underperfor- often then rebated back to the manager er can invest a portion of their clients’
Costs vary dramatically, however, and tend mance from year one carried over to year that made the investment – known as retro- account into a fund. The fund charges the
to depend on the expected return and the two? Is the performance fee charged on net cessions. client a 1.5 per cent management fee per
exclusivity of what you are investing in. or gross account performance? l Questions to ask: Will my account be annum, of which 0.5 per cent would then
l Questions to ask: What does my man- invested into funds that incur front-loaded be rebated to the investment manager.
agement fee charge include? Does the fee STRUCTURED PRODUCT FEES fees? Are there any additional administra- Retrocessions can occur from any transac-
also include administrative charges? Is the Fees on these products are not always trans- tive fees or performance fees? Will any tion as well as from investments into hedge
charge net or gross of costs? parent and typically consist of a 2-3 per cent retrocessions received be rebated back to funds, mutual funds and structured prod-
upfront fee with an annual management my account? Are there any penalties if I ucts. Some investment managers may use
CUSTODY AND ADMINISTRATIVE FEES fee in the region of 1 per cent. A structured redeem from a fund? these fees to increase the revenue they gen-
This is a separate fee that includes safe cus- product can often be replicated directly via erate from a client’s account over and above
tody of the assets, reporting, statements, purchasing the underlying constituents TRANSACTION FEES the management fee.
tax reporting, transfers and any other non- rather than buying the branded product. If Every time a trade is completed in l Questions to ask: Do you receive any
investment activity that takes place on the you can’t get an answer to the below, you your account it costs you. Charges vary from retrocessions or rebates? Are these dis-
account. ought to choose a different investment 0.05 per cent to 0.5 per cent – this will usual- closed to the client and/or rebated back to
l Questions to ask: What is the charge? manager who is more transparent. ly be on top of the bid-ask spread and will the client’s account?
What is included within the custody and l Questions to ask: What is the bank’s depend on the size of an account, the fre- Clients deserve full transparency when it
administrative fee? underlying fee? What is the set-up cost? If I quency of trading and the underlying secu- comes to the fees and charges associated
try to sell the product half way through its rity. with financial products, which seem to be
PERFORMANCE FEES life are there any penalties? l Questions to ask: Does the investment becoming ever more and perhaps unneces-
These are also widely spread and are usual- manager add any additional commission sarily complex.
ly calculated as a percentage of any outper- FUND FEES (FRONT-LOADED FEES) onto any trade in any client account or Hassium Asset Management is an independent
formance over a benchmark. But you need These are retail investor-related and profes- receive any retrocessions? global wealth manager.



Hot water and heating bills are £140 a year A third of Brits feel they cannot afford to put A fifth of people will forgo an overseas holi- Almost nine in ten savings accounts that
more for offline customers than for online money aside each month, according to day this year to save money, while half of were available six years ago are now paying
customers, according to new figures from research by the Skipton building society. Even those who do go will economise by avoiding interest rates of 0.5 per cent of less, accord- The average household energy more worryingly, almost a quarter of people purchases such as travel insurance, accord- ing to research by Which? Money. That
bill is £1,239 per year, but that drops to claim to have no savings at all, and over half ing to research from the AA. Mark Huggins, implies that savers who have not switched
£1,010 for online customers. Of that, the of people are saving less than £100 per director of the AA’s financial services, point- their accounts are likely to be seeing the real
average cost of hot water and heating is month. Unsurprisingly, Londoners are among ed out that family holidays are often the first value of their savings diminish. The research
£756 a year on a standard tariff, relative to the most effective savers, putting away an major victim of families’ spending cuts. He calculated that British savers are missing out
£616 a year for online energy customers. average of £214 per month but those in the warned against travelling without travel on £12bn a year as a result of the low rates,
Only 13 per cent of customers are on online North East also manage to save £200 each insurance, saying: “An accident or illness that or an average of £322 per year for every
energy plans, suggesting that there are con- month. Those in the South East save the least lands you in a European hospital could easily saver with a cash Isa or a savings account.
siderable savings to be had. putting aside only £134 a month. cost you £2,000 or more”. The best accounts offer 2.9 per cent per year.
20 Wealth Management | Markets CITYA.M. 13 JANUARY 2011


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 Group 330 4 340 250 Colt Telecom 138 -1.25 139.25 109 John Wood Group 571.50 -10 581.50 293 Royal Bank of Scot 41.25 1 58 31.25
3i Infrastructure 118.75 -1 125.25 101 Compass Group 567.50 -8.50 594 425 Johnson Matthey 2045 15 2100 1446 RSA Insurance Grp 134 2 136.50 114.75
A.B. Foods 1131 -5 1182 859.50 Cookson Group 650 -24.50 687.50 367.50 Jupiter Fund Man 309.50 -4.50 314 180.25 SABMiller 2208.50 -35.50 2306 1650
Aberdeen Asset.Man. 217.50 -2.25 219.75 112.75 Croda International 1625 83 1625 751 Kazakhmys 1671 59 1671 965 Sage Group 282.25 0 289 222
Admiral Group 1525 -11 1693 1114 Daily Mail & Gen 582 -6.50 590 432.50 Kenmare Res. 32.75 2.25 35 9.25 Sainsbury (J) 382 -8.50 395 313
Aegis Group 140.50 -1.75 145.50 103.50 DAVIS SERVICE 438.75 -2.50 441.25 360.25 Kesa Electricals 160 -0.75 174 99.25 Schroders 1922 4 1922 1116
Afren 159.25 5.75 159.25 79 De La Rue 805 -10 1005 549.50 Kingfisher 261.75 -1.25 267 198.50 Schroders NV 1508 0 1508 929.50
African Barrick Gold 588.50 10.50 670 503 Debenhams 70.25 -0.50 79 53 Ladbrokes 129.25 0.75 162.75 122.75 Scot.& Sth. Energy 1215 4 1258 1010
Aggreko 1514 5 1685 882 Derwent London 1563 -1 1605 1208 Lancashire 580 3 647 435 Scottish Mortgage 714.50 10.50 714.50 475
Alliance Trust 378 1.50 378 293.50 Diageo 1212 -24 1236 1000 Land Securities 707 15 707 545 SEGRO 301.50 7.25 341.25 250.25
Amec 1209 -17 1226 733.50 Dixons Retail 23.75 1 37.50 22.75 Legal & General 109 3 109 69.75 Serco Group 565 1 651 494.25
Amlin 380.50 -12.50 433 366.75 Domino’s Pizza 559 -6 586 309.25 Lloyds Banking Grp 67.75 1.50 77.50 46.50
Severn Trent 1447 -14 1499 1086
Anglo American 3396.50 113 3407 2254 Drax Group 380 0 437.75 326.25 Logica 134.50 -0.50 148 101.75
Shaftesbury 452 1.50 460 349.25
Antofagasta 1571 39 1634 761 DS Smith 223.75 6 223.75 104 London Stock Ex. 891.50 -14.50 906 544
Aquarius Platinum 346.75 8.25 458 227 Dunelm 488.25 -8.75 550 325.25 Lonmin 1860 1 2113 1355 Shire 1646 24 1646 1220
ARM Holdings 496.75 -0.75 497.50 187 easyJet 460.75 -4.25 496.50 348.50 Man Group 302.50 -6.25 314.50 202 SIG 136.25 0 137.75 90.75
Ashmore Group 342.50 -1.50 383.75 218 Edin.Inv.Tst. 460.50 -2.75 467.25 364 Marks & Spencer 372.50 -0.50 427.50 323.50 Smith & Nephew 680.50 10.50 712 537.50
Ashtead Group 170 -6.25 177 77 Electrocomponents 271.75 -7 279.50 174.75 Meggitt 380 -1 381 251.50 Smiths Group 1285 -9 1301 995.50
AstraZeneca 3014 14 3385 2732 Enquest 149.75 1.50 149.75 89.25 Melrose 325.50 -1 326.50 162 Soco International 348.50 -12.50 484.25 292
Autonomy 1550 0 1975 1271 Essar Energy 556 -4 589.50 383 Mercantile Inv Tst 1114 14 1114 828 Spectris 1294 -5 1335 735
Aveva Group 1635 3 1663 1007 Eurasian Nat Res 1125 47 1266 818 Michael Page 517.50 -1 565.50 346.50 Spirax-Sarco 2025 62 2025 1240
Aviva 421.25 12.75 423.50 294.25 Euromoney Inst. 703 -2 727 453.75 Micro Focus 398 2 546.50 276 Spirent 146.50 -0.50 160.25 102.75
AZ Electronic Materials SA (WI)300 -6 310 249 Experian Group 780.50 -6 819 572 Millennium & Cop. 590.50 -4 594.50 368.50 Sports Direct 169.50 -5 174.75 92.25
Babcock International 574.50 -15.50 635 492.75 Fenner 386.75 32 386.75 173.75 Misys 333 -2.75 343 201.50 St James’s Place 281.25 2.50 292 204.25
BAE Systems 345.50 5.50 388.75 294.75 Ferrexpo 426.75 13.75 426.75 197 Mitchells & Butlers 352 -4 361 265.50 Stagecoach Group 215.25 -3.75 224 160.75
Balfour Beatty 327 7.75 327 229.75 FirstGroup 400.75 -5.50 415 336 Mitie Group 233.25 3.25 241 188.75 Standard Chartered 1744.50 42.50 1950 1351.75
Barclays 302.50 10.50 383.25 255.25 For.&Col.Inv.Tst 316.25 0.25 316.25 251.50 Mondi 520.50 8 557.50 338.25 Standard Life 220.75 3.25 236 173
Barratt Development 93 -2 139.25 70 Fresnillo 1533 -26 1682 669.50 Monks Inv.tst. 359.50 -0.25 363 271 Supergroup 1390 226 1638 535
BBA Aviation 227 -1 228 158 G4S 268 2 283.50 237.75 Morgan Crucible 274.25 2.50 274.25 159.75 TalkTalk 165.25 0.25 168.25 108.50
Bellway 664 -3.50 809 511 Genesis E.m.f. 555 2 568 399 Morrison (Wm) 269.50 -3.50 306.25 257.50 Talvivaara Mining 597.50 2.50 620 342.50
Berkeley Grp Hldgs 941.50 -8 949.50 742 GKN 231 -6.25 237 102 Murray Int.Tst 951 0 966 736.50 Tate & Lyle 542 -4 546 388.75
Betfair Group 925 7 1550 882 GlaxoSmithKline 1229 4.50 1318.50 1095 National Express 255.75 -3 259.50 195.50 Taylor Wimpey 33 -0.25 44 22.25
BG Group 1320 -14 1337.50 984 Great Portland Est. 356.25 0.25 369.25 279 National Grid 539 -12.50 596.25 484.25 Telecity Group 444 -20.75 532.50 360
BHP Billiton 2550 31 2616 1684.50 Greene King 467.25 9.25 491.50 376.25 Next 2053 3 2344 1817 Templeton Emrg. 672.50 4.50 689.50 471.50
BlackRock Mining 815 12.50 815 492 Halfords Group 420 -8.25 550 372.75 Northumbrian Water 325.25 0.25 361.50 252.75 Tesco 423.75 -1.75 454.50 377.50
BlueCrest AllBlue 172 0 174.50 156.25 Halma 346.75 -5.25 366.50 223 Ocado Group 190 7.50 200 123.50 Thomas Cook Group 200.25 1 272 171.75
Booker Group 58.25 -0.75 60.50 38.75 Hammerson 434.75 4 434.75 336.25 Old Mutual 130.75 4 145.25 97.25
Travis Perkins 1114 20 1114 664.50
BP 504 4 655.50 303 Hargreaves Lansdown 558 9.50 599 276.50 PartyGaming 212 2 334.50 205
Brit Insurance 1053 3 1053 728 Hays 128.50 -2.25 133.50 88.50 Pearson 984.50 -3 1051 855 TUI Travel 263 6.50 308.50 190
British Airways 303.50 3 305 184.25 Henderson Group 151 12.75 151.75 112.75 Pennon Group 646.50 -0.50 650 483 Tullett Prebon 409.50 -7.25 420.50 262
British Amer.Tob 2411 -19 2521 1959 Heritage Oil 463.50 -4.50 581 296.75 Persimmon 432 -8.25 507.50 336.50 Tullow Oil 1380 11 1380 991.50
British Empire Tst 503.50 -8.50 512 396.50 Hikma 877.50 4 877.50 516 Petrofac 1658 -27 1685 876.50 UK Commercial Prop 82 1 85 72.75
British Land 532.50 7 537 418.25 Hiscox 384 2.75 399 323 Petropavlovsk 1081 16 1365 852 Ultra Electronics 1736 28 1895 1265
Britvic 465.50 -6.25 518 404.50 Hochschild Mining 586 11.50 658 234 Phoenix Group Hldgs 630 6 758 557.50 Unilever 1901 -2 1997 1688
Brown (N.) Group 307.50 -3.25 310.75 206.50 Home Retail Group 206 3.25 295 188.50 Premier Farnell 289.50 -4.75 304.50 174 United Utilities 580 -8.50 628.50 488.25
BSkyB 737.50 -2 746.50 524.50 Homeserve 441.25 3.25 487.50 326.25 Premier Oil 2022 16 2025 1017 Utd Business Media 688.50 -12.50 712 409.75
BT Group 188.25 -2.50 190.75 110 HSBC Holdings 715 26.25 719.50 596.25 Provident Financial 903 7.50 974 728.50 Vedanta 2514 103 2934 1839
Bunzl 770 -0.50 777 616.50 Hunting 781 -20.50 801.50 439.50 Prudential 697.50 8.50 697.50 487.50 Victrex 1480 44 1522 806
Burberry Group 1118 -24 1156 581 ICAP 548 -0.50 548.50 294 PZ Cussons 401.75 -2.25 409 234.75 Vodafone Group 171 -2.75 176.75 129.50
C&W Comms 49 0 63.75 44.25 IG Group 523.50 3.50 553 362.50 QinetiQ Group 134.75 0.75 163 96.75 Weir Group 1802 1 1861 735.50
C&W Worlwide 71 1.75 100 60.50 Imagination Tech 391.50 8 441.75 215 Randgold Res 5175 -50 6655 4209 Wellstream Holdings 785 0 793.50 436
Cairn Energy 449.75 -5.50 493.25 318.25 IMI 910.50 -18 948 530.50 RDS ‘A’ 2140 6.50 2162 1624 Whitbread 1884 8 1887 1266
Caledonia Inv. 1905 11 1928 1512 Imperial Tobacco 1941 -27 2154 1753 RDS ‘B’ 2134.50 -3.50 2159.50 1554 William Hill 172.50 0 216.50 155.50
Capita Group 687 -0.50 826 635.50 Inchcape 381 -9 391 237 Reckitt Benckiser 3456 -22 3655 3037 Witan Inv Trust 522 5 522 410
Capital & Counties 145.50 0 157 100 Informa 437.50 -2 448 304.50 Reed Elsevier 542.50 -4.50 563 460.50 WOLSELEY 2194 15 2194 1223
Capital Shop Centre 379.50 -2.25 424.75 301 Inmarsat 664.50 2.50 821 606.50 Regus 99.75 3.50 120 66 WPP Group 775 -4 798 572.50
Carillion 380 0.50 387.50 273 InterContinental Htl 1326 0 1329 887 Renishaw 1305 -37 1342 565.50 Xstrata 1535 25 1535 845.75
Carnival 3137 9 3153 2037 Intermediate Cap.Grp 355.75 8 355.75 240.50 Rentokil Initial 99 1.50 138.50 87.75
Catlin Group 370.75 2.25 393 320 International Pers Fin 364.50 3.75 386.50 183.25 Resolution 243 0.50 334.75 211.25
Centamin Egypt 170 -3 197 106.75 International Power 413.50 -6.75 448.50 284.50 Rexam 356 5 356 276.50 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 327.50 -5.75 346 264 Intertek Group 1837 -38 2000 1150 Rightmove 799.50 -2 812 500.50
Charter 820 14 853.50 567 Invensys 362.75 -1.50 364.25 230.25 Rio Tinto 4542.50 96.50 4584 2812
Chemring Group 3194 -4 3663 2598 Investec 534 7 562 417.75 RIT Capital Partners 1264 0 1264 971.50
Close Brothers 885 -3.50 888.50 664 ITV 72.75 -0.50 74.25 48.25 Rolls-Royce Group 664.50 -0.50 665 473.50
COBHAM 228 5.25 276 192.25 Jardine Lloyd 622.50 5 631 459 Rotork 1830 -20 1895 1214

London hits 31-month closing Wall St gets boost

high as Portuguese fears fade from banking stocks
added 13.7 per cent and 9.3 per cent ereign debt situation today and debt finance ministers would beef up the

THELONDON after the two announced a merger.

Mining stocks tracked firmer met-
fears could be waning. That said,
investors are likely to want to see THENEW YORK European Union’s rescue fund.
“Europe has kept people from

als prices, with Kazakhmys and
Vedanta Resources, up 3.7 per cent
and 4.3 per cent respectively, also
helped as Deutsche Bank upgraded
affirmative action from the EU first
and this means we are still some way
from being able to draw a line
through this issue just yet.
REPORT becoming more bullish than they
would be otherwise, and the demand
in the auction sets a positive tone
going forward,” said Bill Stone, chief

RITAIN’S top share index hit a the pair to “buy”. Retailers weighed on the downside S stocks ended solidly higher investment strategist at PNC Wealth
31-month closing high yester- Analysts said improved market senti- after J Sainsbury, down 2.2 per cent yesterday after European debt Management in Philadelphia.
day, boosted by banks after a ment was also underpinned by hopes on valuation grounds, issued a trad- fears eased and sparked a broad The overseas auction fed risk
successful bond sale in Portugal that the European Union will ing update. advance, led by banks and com- appetite and contributed to a drop in
eased investor concerns over Europe’s increase its fund for helping member Tesco shed 0.4 per cent ahead of its modity-related shares. US Treasuries and municipal bonds.
sovereign debt crisis, and as miners nations out with their debt problems. trading statement yesterday, with Investors expect further flows into Agricultural stocks rallied after a
tracked metals prices higher. “If we can get an absolute commit- traders citing pressure from equities on speculation the economy US government report said US stock-
The FTSE 100 ended up 36.69 ment from the ECB that it and Sainsbury on its non-food business. will strengthen. About seven stocks piles of corn and soybeans would be
points, or 0.6 per cent, at 6,050.72, its European states are prepared to “The creation of a sizeable non- rose for every three that fell on the drawn down to surprisingly low lev-
highest close since early June 2008, extend the size of the European food business is increasing the desti- New York Stock Exchange. els, lifting food prices and agricultur-
finishing in positive territory for the bailout fund, that would remove an nation attraction of Sainsbury’s Sectors typically helped by rising al shares.
second day in a row. awful lot of the doubts markets have largest stores and this appears to be inflation, including agricultural and The Dow Jones industrial average
Banks added the most points to the still got about the solvency of achieved mostly at a cost to Tesco,” energy, were strong. Seed company was up 83.48 points, or 0.72 per cent,
blue chip index, as risk appetites European banks,” Jim Wood-Smith, broker Jefferies International said in Monsanto rose 3.3 per cent to $74.92 at 11,755.36. The Standard & Poor’s
returned to the market after Portugal head of research at Williams de Broe, a note. while Exxon Mobil gained 1.2 per cent 500 Index was up 11.47 points, or 0.90
sold €1.249bn (£1.04bn) in two bond said. Also Vodafone dropped 1.6 per to $76.58. per cent, at 1,285.95. The Nasdaq
maturities to strong demand, taking “If we can get past that, we’ve then cent, after the stock was downgraded Banks were led by JPMorgan Chase Composite Index was up 20.50 points,
some pressure off the indebted coun- got a global situation where corpo- to “equal weight” from “overweight” & Co, which rose 2.5 per cent to or 0.75 per cent, at 2,737.33.
try to seek a bailout. rate profitability is extremely good, in a bearish note on the European $44.71 after its chief executive said JPMorgan is expected to report its
Heavyweight HSBC led the sector monetary policy is exceptionally telecoms sector by Barclays. the bank could increase its dividend quarterly results on Friday. Intel,
higher, up 3.8 per cent. loose and it’s going to stay exception- once the Federal Reserve gives its another Dow component, is sched-
“Obviously the Portuguese bond ally loose, and that’s a scenario which ANALYSIS l FTSE 6,050.72 approval. uled to report after the market closes
12 Jan
auction being successful helped to would support significantly higher 6,100 Eric Marshall, director of research today.
keep the market in the positive today, global growth than is currently at Hodges Capital Management in The S&P is almost nine per cent
but we're not seeing a lot of flows expected.” Dallas, Texas, said that money leaving higher since the start of December, in
going through,” Martin Dobson, head But City Index market strategist 5,900 the bond market “is slowly coming part on bets that earnings would be
of trading at Westhouse Securities, Joshua Raymond said a successful back into equities. This is really about strong.
said. Spanish bond auction today was cru- the first time in three years we've While early results have suggested
Insurers Legal and General and cial for continued confidence. 5,700 seen outflows out of bond funds.” that optimism was justified, some
Aviva gained 2.8 and 3.1 per cent “This has been a notable step in the A healthy bond auction in Portugal analysts say it may be hard for equi-
respectively, while mid-cap fund man- right direction for a calming of drove investors into riskier assets. ties to rise much further given recent
agers Gartmore and Henderson nerves concerning the European sov- Investors were hopeful Eurozone gains.
18 Oct 5 Nov 25 Nov 15 Dec 7 Jan
CITYA.M. 13 JANUARY 2011 Wealth Management | Tax Planning 21

Make sure you aren’t

paying too much: get
your tax return right
With real incomes falling, be sure not months. This makes efficient tax
planning all the more important.
to hand the state more cash than you CLAWING BACK YOUR CASH
There is some advice that is always
need to, writes Donata Huggins worth being reminded of at this
time of year: check that you are clas-
sified under the correct tax code

T’S THAT time of year again. sit down and fill out our tax return. (visit if you
We all try to pretend it’s not Many say the misery of the process haven’t) and don’t forget to get the
happening, but the reminder stems from a sense that we are pay- form in before the deadline (31
adverts have been slapped ing too much. And that feeling will January). We’ve also decided to list
across the tube billboards for weeks no doubt be stronger this year since below some of the allowances and
now. So, at some point over the next real average take-home pay has fall- relief offers that you may not have
three weeks, we are going to have to en 3.2 per cent in the last 12 realised you were entitled to. And this little piggy’s pennies didn’t leave home Picture: GETTY

Making contributions to your employer's pension Not all business expenses are tax deductible, but you Married couples and civil partners who own assets If you rent a room you can opt into a scheme that
scheme can be made from your gross pay before tax. can claim back certain expenses– this can include a jointly can claim a double allowance of £20,200. lets you collect up to £4,250 in rent per year tax-
The great news is that this includes any voluntary con- proportion of your lighting, heating, water and even free if the lodger lives in your home.
tributions you make. council tax bills if you work at home. CHILDREN’S SAVINGS
You can prevent your child being taxed on their LANDLORD’S GREEN RELIEF:
TAX-FREE SEASON TICKET LOANS SELF-EMPLOYED CAR COSTS: savings by completing a simple R85 form on their If you rent out a property, you can claim up to
Remember, season ticket loans from your employer While sadly you can’t claim back the taxes on buying a behalf. These can be found on the HM Revenue & £1,500 for insulation, draught proofing and
are tax-free. car, you can claim back the running costs. Customs website. installing a hot water system in the year of installa-
If you have recently switched to a greener company It is possible to carry forward losses from one year CGT is not charged on the sale of shares or units REDUCE CAPITAL GAINS TAX ON BUY-TO-LET:
car, bear in mind that these are now taxed at a lower and offset them against profits from the next. Even if held in an individual savings account (Isa). But If your rental home has been your own home in the
rate than the gas-guzzling variety. Also, if you use a this doesn’t save you any money in the long run, it remember, you will be taxed at 10 per cent on divi- past, you could qualify for tax relief on the last
pool car through work, this is also eligible for relief. could keep your cash flow situation healthy. dends earned. three years of ownership.


● Eurasian Natural Resources – 4.36 per cent ● GKN – 2.61 per cent

iners and banks drove the
FTSE up to 6,051 yesterday as
Boosted thanks to a favourable referendum in Kazakhstan Engineer GKN dropped hardest yesterday
a successful debt issue in ● Vedanta Resources – 4.27 per cent ● National Grid – 2.27 per cent
Portugal reassured investors. The mining company was up after an upgrade from Deutsche Bank National Grid is suffering from power outages
Vedanta and Eurasian Natural ● HSBC - 3.82 per cent ● J Sainsbury – 2.15 per cent
Resources both benefitted from ana- Banks did well as Portugal’s successful auction soothed nerves J Sainsbury saw gains reversed after a bout of profit taking
lyst upgrades by Deutsche Bank. A ref- ● Kazakhmys – 3.66 per cent ● Burberry Group – 2.10 per cent
erendum in Kazakhstan on the
president’s rule also helped. National Like Eurasian Natural Resources, this Kazakh miner did well Burberry fell back yesterday as the fashion house became less fashionable
Grid, GKN and J Sainsbury all ● Barclays – 3.63 per cent ● Intertek Group – 2.03 per cent
dropped back. Like HSBC, Barclays was boosted by optimism about the Eurozone The laboratories group fell back yesterday after big gains on Tuesday
22 Wealth Management | Funds CITYA.M. 13 JANUARY 2011

Young, hopeful
and about to
start boosting
growth rates
China’s demographic Vietnamese equities are “are now selective-
ly very cheap on an absolute, historical and
dividend is over but relative basis”.
Snowball notes that investors have been
discouraged by high inflation, a weak cur-
others are emerging, rency and a trade deficit. But he argues that
structural trade deficits in countries build-
says Daniel Knowles ing modern industrial economies are per-
haps inevitable and largely the result of
productive imports. And inflation figures

OR MUCH of the last two decades, the are magnified by the high weighting of
Chinese economy has astonished food in the Vietnamese CPI basket.
investors and worried politicians. Eventually, Vietnam’s young and well
Growth of an average of 9.3 per cent educated population, as well as its compar-
has been driven by an astonishing bout of ative export competitiveness (manufactur-
domestic investment. But it has also been ing wages are half equivalents in China)
helped on by an immense “demographic should keep growth strong, while the
dividend”, engineered by the country’s one Vietnamese government’s need to attract
child policy. investors will lead to further opening up of
But with inflation now creeping into the the economy to outsiders.
Chinese economy, and some speculation
that the cheap labour might be running MIDDLE CLASS CONSUMPTION
out, the next decade might not be quite so But if the instability of Vietnam is too
buoyant. So where else can investors look? much to bear, India is also much better
Immediately south of China seems wise. placed demographically than China. Tarun
While China’s population is fast aging, its Ghulati, the CEO of UTI International,
neighbours Vietnam, India and Indonesia which manages the UTI India fund, argues
all have fantastically young workforces. that not only is India’s population young, it
By one estimate, some 70 per cent of is also ambitious.
Vietnamese will be of working age by 2018 Ghulati points out that “the high
while 65 per cent of Indonesians will be. propensity to consume among the young
Similarly, by 2020, the average Indian will population and the growing number of
be 29 years old – compared to 37 in China. wealthy individuals will ensure that India
That youthfulness ought to increase sav- continues to show strong growth over the
ings rates, helping governments to build next decade.” As America grapples with the
infrastructure and drive up growth rates. prospect of rebalancing away from import
Vietnam is a particularly interesting dependence, China’s export strength may Street traders in 2007 designed to attract foreign funds, and The emergence of huge, new economies
prospect. Investor confidence has suffered become a weakness, while India’s domestic Danang, Vietnam: a it is currently engaged in an anti-corrup- outside of the developed world is clearly
recently, not least thanks to an unfortunate driven growth shouldn’t. market on the way up tion battle. going to continue. Undoubtedly, China will
default last month by the state owned ship- Increasing middle-class consumption According to Dhananjay Phadnis, man- keep growing. But with a multitude of
builder Vinashin. But over the long term, ought to drive growth in Indonesia too. ager of Fidelity’s Indonesia Fund, further other large countries experiencing the
there are a lot of reasons to be optimistic Since the resignation of the strong man Picture: ROBERT reform, especially of infrastructure, could magical combination of a demographic
about Vietnam. President Suharto in 1999, Indonesian poli- HARDING raise growth from its current level of dividend and a helpful government, the
According to Kevin Snowball, chief exec- tics has been getting progressively more sta- around 6 per cent per annum to a rate clos- next big investment story is less likely to be
utive of PXP Vietnam Asset Management, ble and investor friendly. The Indonesian er to 8 or 9 per cent – which ought to China than it is one of its neighbours.
which manages two Vietnam based funds, government passed an investment law in appeal to many investors. Investors would do well to consider that.

Top Five Indian Funds 10/12/07
10/12/10 Portfolio Portfolio Management
% Change Size (£m) Domicile Manager Group
First State Indian Subcontinent A 45.51 249.48 UK David Gait First State Investments Ltd NEW MERGER ARBITRAGE FUND NEW FRONTIER MARKETS FUND
Aberdeen Global Indian Equity A2 45.09 2,744.68 Luxembourg Management Team Aberdeen Asset Managers Limited(Lux) PineBridge investments has launched a new Schroders has launched a Luxembourg-domi-
First State Indian Subcontinent I Acc 43.2 158.83 Ireland David Gait First State Investments (Hong Kong) Ltd
merger arbitrage fund designed to profit ciled frontiers market equity fund for Alan
from investing in publicly announced merger Conway and Rami Sidani. The Sicav struc-
PineBridge India Equity Y 38.39 316.5 Ireland Peter Soo PineBridge Investments Ireland Ltd and acquisition transactions. The UCITS III tured ISF frontier markets equity fund will
UTI India 1986 Shares 33.23 N/S Mauritius V Srivatsa UTI International Ltd compliant fund is managed by Lan Cai, who be benchmarked against the MSCI frontiers
has 15 years of experience in investing in market index, which is weighted 60 per cent
Indonesian Funds equities and derivatives. Ms Cai has managed towards the Middle East. The fund is to
FF - Indonesia A USD 94.35 711.54 Dhananjay Phadnis Fidelity (FIL (Luxem PineBridge’s merger arbitrage strategy for invest heavily in Kuwait and Qatar, as well as
bourg) S.A.) institutional clients since 2002, generating other countries such as Nigeria, Argentina
Allianz RCM Indonesia A USD 17.75 104.88 Luxembourg Ho Yin Pong Allianz Global Investors Lux positive performance for eight years. It is and Pakistan. It is to be dollar denominated
also relatively uncorrelated with equity and with plans to launch a euro version in the
Vietnamese UK listed trusts Latest Disc Latest Nav % Change Portfolio Domicile Portfolio Management bond markets and is not very volatile. future.
Size (£m) Manager Manager Group
JSM Indochina ORD N/A 0.35 62.14 51.57 Cayman Islands JSM Capital Indochina Ltd Aberdeen Asset Management is to unveil a Invesco Perpetual will be launching a new
Vinaland ORD -34.04 1.41 -14.48 452.66 Cayman Islands VinaCapital Investment version of its Global Latin America fund to be Asian equity income fund on 7 March of this
Management Ltd domiciled in the UK. A version of the fund year. The fund aims to generate both income
Vietnam Enterprise Invmts N/A 2.28 -49.31 244.48 Cayman Islands Management Dragon Capital domiciled in Luxembourg already exists. and also long term capital growth by invest-
Devan Kaloo, head of global emerging mar- ing in shares in Asia and Australasia, exclud-
Ltd Redeemable Team Management LLC
kets at Aberdeen, will be taking charge of the ing Japan. The fund will be managed by
Vietnam Growth Ltd Ordinary N/A N/A N/A 1.23 Cayman Islands Michael Dragon Capital fund, which plans to pick Latin American Stuart Parks and Tim Dickson and is an addi-
Lippold Management LLC stocks according to strict quality criteria. tion to Invesco Perpetual’s existing Asian
Vietnam Dragon Ltd Ordinary N/A N/A N/A 1.23 Bermuda Michael Dragon Capital Over the last three years, the fund has gener- equity franchise. The fund management team
Lippold Management LLC
ated 4.28 per cent, narrowly underperform- will target a dividend yield of 120 per cent of
ing its benchmark of 4.42 per cent. the MSCI AC Asia Pacific ex-Japan index.
Lifestyle HOTTEST NEW 23

A double dose VEXED IN THE CITY


of danger for The awful stress

elite Death Inc of too many
resolutions that
Only toughs need apply: the third in a gritty I can’t keep
series should please men, says Zoe Strimpel
DEAR VEXED: I am completely stressed
out. I made three New Year’s resolutions: to
diet, not to drink in January, and to work
SHADOW FORCE lent yarn with the right amount of real- harder. I’ve slipped on all of them already,
BY MATT LYNN life political darkness thrown in. Certainly particularly the diet. The more I try to be
Headline, £12.99 a good read. good, the harder it is. I feel like crying. Bob,
28, wealth management adviser

SUGAR ISLAND KNOW the feeling. And I can tell you
BY SANJIDA O’CONNELL exactly what you’re doing wrong. It’s mak-
John Murray, £17.99 ing New Year’s resolutions in the first place
IT doesn’t take a rocket scientist to figure – they just beg you to fail and failure isn’t a
out that a book called Shadow Force – the hhhhi helpful concept when it comes to self-improve-
first in a series that tracks a pack of merce- ment. What makes it work is a genuine desire
naries around the world – is not going to to improve – from this comes real will.
have much of a feminine touch. Well, Your goals, however, are normal and
journalist Matt Lynn has gone the full dis- COMPLETELY absorbing Island opens with healthy in themselves. But each one is a major
tance and got women out of the picture Emily Harris, a glamorous English actress, task. Pledging to fulfil three at once is not only
entirely. His cast of the characters at the wrapping up a performance of Romeo and too much to ask of anyone bar the most hard-
beginning reads like a who’s who of an Juliet somewhere near Boston. Harvard ened masochists, it’s also just too confusing.
angry teenage boy’s warfare fantasy. boys clap and weep in the front row. The brain works best when focussed – it’s well
There’s Steve, formerly of the SAS; Ollie, Having arrived in America in 1859, she known that when you are faced with a million
once of the Household Cavalry; David, of meets and falls in love with a southern things at work it can be hard to start on one.
the Irish Guards; Nick from the Territorial charmer, Charles Earl Brook. Shortly after Zone in on the booze for January. Relieving
Army, and so on. There’s a weapons glos- they’re married, though, Emily discovers a yourself of the pressure to transform your
sary at the end, too. Well, fair enough. The terrible secret: the Brooks are slave owners body and your career while you give your liver
kinds of men who will be reading this and Emily must travel to the deep south side of the generational and domestic Somali piracy fuels a break (no small task) will make you happier
book won’t be sinking their teeth into it where Charles keeps 700 slaves – many of sagas for which she is known. Instead, two the gripping and more efficient. I suspect that you’ll start
for its nuance – or for the now-popular whom she befriends. As the civil war strangers meet on a train, and end up hav- Shadow Force. feeling better and sleeping better, and your
genre of the female warrior (thank you, breaks out, Emily’s world becomes more ing an affair. The novel starts with the work will naturally improve. Giving up booze
Lisbeth Salander). This is 100 per cent men and more dangerous and she realises that affair already in the past and receding fast does wonders for creativity.
doing, what Lynn seems to insist, is her burgeoning friendship with the slaves – like a town passed at speed by the very In February, tackle your
“man’s work”. could cost her everything. The opening locomotive the dalliance began on. diet. Once the pounds
And perhaps it is. There’s an an under- image of Capulets and Montagues gains in Divided into two parts, we first hear the have started to fall
cover operation; a top secret unit, and pos- searing meaning as the story progresses. A story of Paul, who – after meeting Cora, off, you set yourself
sibly a death sentence for all concerned. surprise delight that will please romantics who he remembers as “that girl in a challenge at work.
Why? Well, Somali-based pirates are with a conscience hugely. Cardiff” – abandons his wife and two kids This one-at-a-time
attacking ships off the coast of Africa, to support his pregnant 19 year old daugh- approach is key to
demanding millions in ransoms and push- ter Pia, moving into the dingy flat she the success of any
ing up the cost of shipping along this cru- THE LONDON TRAIN shares with her Polish boyfriend and his of your resolutions.
cial route. The elite “fighting men” from BY TESSA HADLEY sister. He is odd, unpredictable, selfish and And next New
Death Inc – the British government’s top- Cape £12.99 likeable all at once. Year’s, think twice
secret force – are called upon to destroy The second and shorter part of the book about making any
the pirates. Only once there, they realise hhhii (it’s more gripping, too) is a study of Cora. booze-addled
they’re the target of a deadly conspiracy Far from feeling just like “the girl from pledges. Got a
and their lives are the only thing that are Cardiff”, we learn the affair meant every- problem?
expendable about the mission. Lynn is thing to her and rocked her to the core. Email
being tipped as the next Andy McNab and HADLEY is a master of family relationship This is a mature, clever unravelling of a vexed@
there’s no doubt he can spin a good, vio- drama – her new novel, though, steps out- strangely-born relationship.


a bit more a bit more often grown. As it stands, the bulk of China’s and Italy just behind it. Nearly half the
Britons are still the world leaders in wine (in the £6-£7 per bottle imported wine comes from France. world’s wine comes from France, Italy
range). Imports are set to rise drastically – and Spain, and Italy is the world’s
drinking, says Zoe Strimpel As for spirits, vodka is king, between 2005 and 2009, Chinese biggest consumer of wine. That said,
stealing ground from Scotch consumption of wine rose by the European countries are producing
and cognac. UK consumption 103.37 per cent. at a negative rate of growth, in part

HE British taste for bacchanalia And guess what? We’re set to keep on of spirits soared by 6.1 per However, savvy growers due to harvests and changing weather.
is on the rise, according to a mas- glugging: the forecast shows our rate cent between 2005 and 2009 should look to Argentina – the Spirits – vodka and rum in particular
sive drink report announced yes- of consumption will grow by a fairly – we drank 8.43m cases of US is investing in a big way – are racing ahead, with 7.61 per cent
terday, conducted by IWSR moderate 2.9 percent by 2014. 2007 vodka in 2010, a growth of 20 in its wine industry, and growth from 2005-2010: world spirits
(International Wine and Spirit was a big turning point for us: it was per cent since 2005. Rum is investment is coming from consumption reached 2.7bn 9-litre
Research) in conjunction with Vinexpo, the first year we spent more than the coming up in the world thanks to Chile and Europe too. cases last year, and the market is set
the massive industry fair. French on wine. Last year, total sales huge marketing campaigns and Think that Europe’s to grow over the next four years. Asia
The UK remains the number one reached £8.642bn RSP (recommended our enduring love of cocktails. getting left behind? It Pacific dominates the spirits market,
importer of wine in the world – of selling price). Vive L’Angleterre. And what about China? The isn’t – yet. France is by a long way. Chin chin.
which our favourite is Australian – in We love our wine but we don’t want Chinese taste for wine is soaring and the biggest exporter
terms of value and volume. In 2010 we to spend too much on it: the average so is production. China is the seventh in the world, by vol- Vinexpo, the world’s biggest wine and
sank 147.12m 9 litre cases or, wait for bottle price is stable at £5.21 per bottle largest producer of wine in the world ume and value, with spirits industry fair, will be held this
it, 1.765bn bottles – We drank 5.5 per (nearly a pound less than the average in now (putting it above Chile and South 495m cases pro- year in Bordeaux between 19-13 June.
cent more wine in 2009 than in 2005. the US), though we are slowly spending Africa), though much of it is still home- duced per year
24 Lifestyle | Technology CITYA.M. 13 JANUARY 2011

The best slimline laptops NICK

The impulse to stay thin is not just for New Year dieters, writes Timothy Barber BOOTH

T last week’s Consumer Electronics Show ence of the iPad – but it’s worth remembering and more advanced, and can still create waves,
in Las Vegas – the event that’s become that for people who really want to do business as the reception at CES to Samsung’s newest, the

Apps that can

the mecca for the latest developments in while on the move, a flat touchscreen still 9 Series (below), proved.
technology, computers, gadgets, gizmos doesn’t beat a proper screen. Here are some of the best options out there for
and pretty much anything containing a Notebooks – as laptops are now fashionably those for whom an office and a desk are a mere
microchip – the tech world went tablet crazy, called – and their smaller siblings, netbooks, hindrance and who need a computer they can

aide a more
with scores of them launched. Such is the influ- have become lighter, thinner, more portable carry around as happily as a magazine.

working life
XPENSE forms are the bane of the City
trader’s life. Whether you’re claiming for
a business lunch or filing your tax return,
the fiddle factor costs you time and
Nine in ten City workers loses fifty pounds a
£867-£1,378 £589 £329 month through mislaid receipts (source: IT in
Context) with petrol receipts the most likely to
As the world fell in love with the iPad, Apple This tiny netbook shares a few of the qualities of At 3cm in thickness this may be chunkier than some on go missing.
relaunched its super-thin MacBook Air late last year to Nokia’s sturdy, reliable phones – it may not be so glam- this page, but it’s still a streamlined package, and at MyAccountantFriend is an iPhone app that
remind us what real, on-the-hoof computing power is. orous, but its battery lasts several hours and it’s hard just 2.39kg it’s hardly going to weigh you down – and minimises these tragedies. You take a photo of
your receipt and this is instantly uploaded to
It’s thinner still (1.7cm–0.3cm at its thinnest point), to imagine it going wrong. It’s light as a feather, and if nor is it too heavy on the bank account. The 11.6 inch the web site, from which your accounts are
faster, sleeker and comes in two versions – a 13.3 inch the price is something of a push for something with display is the business, and it can come with up to 8GB managed for you. It comes as part of an
model and a nifty 11 inch version. basic Windows functionality but little more (it’s a net- of memory, depending on your preferences. We rather accounting managed service that costs £60 a book, after all), it’s still one of the best out there. like the natty lid colours too. month, which makes financial sense if you’re cash rich and time poor.
If you’re worried about cutting your bills,
Halo is a godsend. Use it to manage everything
in your house (your CCTV, the locks to the
front door, your gas and electricity) from your
phone. If you’re off to Hong Kong for two
weeks, with Halo you can use your phone to
switch everything off while you’re in the
lounge at Gatwick. You can text a command to
open the door to your cleaner too, once you’ve
identified him or her on the CCTV picture on
your phone.
It works with all smart phones, but the
iPhone has the best tools. Maker Intamac is
creating an Android version too.
How can you make better use of all the
hours you spend on a train each week? You
could get your personal banking done with the
Orange Credit Card, an app from Mobinetic,
which lets you manage your finances on your
mobile. Or try Ascendo Money, which synchro-
nises your Windows PC with a Blackberry.
TOSHIBA PORTEGE R-700 SONY VAIO X SERIES SAMSUNG 9 SERIES Don’t spend hours dialling out and
£629 £1,429 TBC retrieving every tedious phone message on
your system. Use Hullomail to read them
Toshiba’s top-of-the-range ultra-mobile laptop claims a Is it a netbook or a notebook? Who cares? The almost The laptop that set the most tongues wagging at last instantly – it saves you having to listen to peo-
ple rambling on and taking hours to get to the
useful nine hours of battery life. It measures 1.6cm at absurdly thin Sony VPCX13C7E/X is just 13.9mm in week’s CES show in Las Vegas, this resembles some- point before blurting out their contact num-
its thinnest point, and weighs a handy 1.3kg, and “height”, with an 11-inch screen and well-designed key- thing from the recent Tron film. It’s 1.6cm in height, ber.
comes with up to 4GB of memory – twice that of the board. It’s sleek and smart and as light – 780g – as it is with a futuristic exterior made from Duralinium, used Once the train is in the station, don’t waste
MacBook Air. The tech includes a fingerprint reader, thin. All of which would be worthless if it didn’t run like in aircraft manufacture. The second generation Intel time fighting for a cab. Use to
sparing the need for passwords to access personal a beautifully-designed sports car, which it thankfully CoreTM i5 processor should ensure cutting edge per- find a where the taxis are and pre-book. The
system tells the cabbie where you are too.
files. does. Pricey but superb. formance. Expect it in the spring. Taxi!
Nick Booth, editor of

How to ensure you get the best value deal for your mobile phone
retentions department, where deals can be She suggests using If you want an iPhone, also think carefully.
struck. These days things are more complex., a website developed by tele- Yes, it’s chic and the apps are good, but
A few years ago when pay-as-you-go or 12- coms regulator Ofcom which can auto- there are other phones now that cost
month contracts were the norm, churn was matically – and rather cleverly – analyse £10-15 a month less and are as good.
massive in the mobile business and the phone your phone bills and search the UK’s avail- And if you don’t want to be stuck
companies desperate to hold on to customers. able tariffs to find which suits you. Then with the same phone for 24 months,
But with the advent of smart phones, things you can ask your provider to match the there is a way to change without
LIFE changed. With large up-front and monthly pay-
ments few are willing to pay out their contract,
best deal on the market. They usually will.
If you are tempted by money redemp-
breaking the bank. Buy the phone out-
right and get a long-term SIM-only
COACH so companies are less willing to bend over
backwards to keep you.
tion deals, think hard. It can be hard to
get the money back since the conditions
contract, then sell the phone six
months on – an old smart phone
But you can still save money. First, analyse can be onerous. And if you are offered a can get you £150 with a company

T’S ALMOST a cliché that when you are try- your usage. “If you use less than 150 minutes a TV or a Playstation with a phone, then do like Mazuma Mobile. Use
ing to negotiate your mobile phone bill down month and send fewer than 100 texts a month, the maths carefully as they often cost to find who will
you should threaten to leave the company, then pay as you go is almost certainly cheaper more than if you got a slightly cheaper pay the most for your phone.
and insist to be put through to the for you, ” says Archna Luthra of phone and paid for the gizmos separately. Jeremy Hazlehurst
CITYA.M. 13 JANUARY 2011 Lifestyle | TV& Games 25


6pm BBC News 6pm Eggheads 6pm London Tonight 6pm The Simpsons 6pm Monkey Life
6.30pm BBC London News 6.30pm Great British Railway 6.30pm ITV News 6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm The One Show Journeys 7pm Emmerdale 7pm Channel 4 News 7pm Five News at 7
7.30pm EastEnders: BBC News 7pm Live Snooker: The Masters: 7.30pm Can You Keep a 7.55pm 7.30pm Monkey Life: A lemur
8pm Human Planet: New series. The second quarter-final. Secret?: Tonight 8pm CHOICE Relocation, struggles to adapt to its new
Mankind’s ability to survive in 8pm CHOICE Michel Roux’s 8pm Emmerdale Relocation enclosure: Five News Update
extreme environments. Service: The hopefuls work at a 8.30pm CHOICE Coronation 8.55pm Jamie’s Fish Supper 8pm Ripped from the Cockpit:
9pm Come Fly with Me cafe and a curry house. Street 9pm Hugh’s Fish Fight BA Flight of Terror: Five News
9.30pm Not Going Out 9pm Men of Rock: New series. 9pm Kidnap and Ransom 9.55pm Jamie’s Fish Supper at 9
10pm BBC News Scientists who made notable 10pm ITV News at Ten 10pm Shameless 9pm FILM The Bone Collector:
10.25pm Regional News studies of the Scottish 10.30pm London News 11.10pm FILM Hot Shots! 1991. Thriller, starring Denzel MICHEL ROUX’S SERVICE
10.35pm Question Time landscape. 10.35pm Odd One In 12.45am 4Music: 4Play: British Washington and Angelina Jolie. BBC2, 8.00PM
11.35pm This Week: 10pm The Great Outdoors: 11.20pm Send in the Dogs Sea Power 1999. The chef and restaurateur takes his
12.20am BBC News 2.15am 10.30pm Newsnight: Weather 12.15am The Zone; ITV News 1am Live and Lost 1.25am 11.25pm Forensic Files eight trainees for a breakfast shift at
Sign Zone: Too Much Too Young: 11.20pm Snooker: The Masters: Headlines Orchestra United 2.20am Orchestra 11.55pm Cops in Crisis one of the oldest cafes in London, and
Panorama 2.45am Sign Zone: The opening two quarter-finals. 2.15am The Jeremy Kyle Show United 3.15am The Untold Great 12.15am SuperCasino they also work at a curry house.
Countryfile 3.40am Sign Zone: Turn 12.10am Snooker Extra 3.10am Can You Keep a Secret?: Fire of London 4.10am Brothers & 4am How Not to Decorate 4.45am
Back Time – The High Street 2.10am BBC News 3.55am-6am Tonight 3.35am-5.30am ITV Sisters 4.55am Countdown HouseBusters 5.10am Wildlife SOS
3.55am-6am BBC News Close Nightscreen 5.40am-6.05am Yo Gabba Gabba 5.35am-6am House Doctor


3.45am Life Unexpected

7pm Sky Sports News at 5.15pm Caribbean Twenty20 7pm Top Gear 8pm Great
4.25am-6am Switched HEALTH
Seven 7.30pm Premier League Cricket 7.15pm Live Dakar Movie Mistakes 2: The Sequel 7pm A Baby Story 8pm 10
World 8pm The Rugby Club Rally 7.45pm Freeride Spirit 9pm How Drugs Work: The
9pm Ringside 10pm Time of Show 8pm Live Caribbean effects of Ecstasy on the
HISTORY Years Younger 9pm Kids’
7pm Heir Hunters 8pm IRT Hospital 10pm Medics 11pm
Our Lives 11pm Carling Cup Twenty20 Cricket 11pm Dakar human body. 10pm EastEnders
Football Special 12am Ringside Rally 11.30pm-12.30am Poker Deadliest Roads 10pm Swamp Critical Condition 12am Kids’ CORONATION STREET
10.30pm Edinburgh Comedy People 11pm The True Story Hospital 1am Medics 2am ITV1, 8.30PM
1am Copa Del Rey Football Fest Live 11.30pm Family Guy Critical Condition 3am 10
3am Premier League World ESPN 12.15am How Drugs Work
12am IRT Deadliest Roads Peter vents his frustrations on Leanne,
7pm Goal! 7.30pm ESPN Kicks: 1am Oil Riggers 2am The Years Younger 4am Bringing leaving Nick to comfort her and John
3.30am-6am Live Women’s 1.15am Great Movie Mistakes
FA Cup 8pm Live Coppa Italia Nostradamus Effect 3am Home Baby 5am-6am A Baby heads to Joy’s to remove any
International Cricket 2: The Sequel 2.15am
10pm UFC Unleashed 11pm Decoding the Past 4am The Story incriminating evidence.
SKY SPORTS 2 Snowboarding World Cup Edinburgh Comedy Fest Live
3.15am Music, Money and Hip-
Solomon Treasures 5am-6am
6.55pm Live Copa Del Rey 11.30pm Rallycross 12.30am Barbarians
Football: Almeria v Deportivo Press Pass 1am Live NBA Hop Honeys 4.15am-5.15am 8pm House: The medic is
La Coruna (Kick-off 7.00pm). Basketball 3.30am NBA Action Sun, Sex and Suspicious DISCOVERY forced to accept that he needs
9pm Live Copa Del Rey 4am-6am AMA Supercross Parents 8pm How Do They Do It? help. 9pm FILM My Cousin
Football 11pm WWE: Late 8.30pm How It’s Made 9pm Vinny: Courtroom comedy,
Night – Raw 1am WWE: NXT LIVING E4 Sole Survivor 10pm Brace For starring Joe Pesci. 1992.
2am-3am Ringside 7pm Ghost Whisperer 8pm 7pm Hollyoaks 7.30pm Friends Impact 11pm Frontline Battle 11.20pm Ross Kemp on Gangs:
FILM Home Alone 2: Lost in 9pm The Big Bang Theory Machines with Mike Brewer The former EastEnders actor
SKY SPORTS 3 New York 1992. 10.20pm 9.30pm How I Met Your 12am Bear Grylls: Born Survivor visits Kingston, Jamaica.
6.30pm European Tour Golf Criminal Minds 12.20am CSI: Mother 10pm FILM Final 1am Deadliest Catch 2am Days 12.20am Road Wars 2.15am RELOCATION, RELOCATION
8.30pm Wonderful World of Crime Scene Investigation Destination 2 2003. 11.45pm That Shook the World 3am Ross Kemp on Gangs 3.05am CHANNEL4, 8.00PM
Golf 10pm European Tour Golf: 2.20am Nothing to Declare Scrubs 12.40am Dirty Sexy Treasure Quest 3.50am Mark Oops TV 3.30am The 4400 New series. Kirstie Allsopp and Phil
The Joburg Open. 12am- 2.50am Charmed 4.30am Money 1.35am Young, Sexy Williams on the Rails 4.40am 4.20am Don’t Forget the Lyrics Spencer visit Devon to help dog lovers
3.30am Live PGA Tour Golf: Four Weddings 5.20am-6am and Sporty 2.20am Young, X-Machines 5.30am-6am How 5.10am-6am Are You Smarter Carole and Alan Langman with a
The Sony Open. Maury Sexy and Hollywood Does That Work? Than a 10 Year Old? three-tiered property search.

Copyright Puzzle Press Ltd,


12 29 11 17 30 7 17 7 
30 14
11 27
Place the numbers from 1 to 9 in each empty cell so that each 39  
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 8 25
10 24 8
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 4 14
above or to the left of it. 40 16
You can only use the digits 1-9 39  
   and you must not use the
11 23
same digit twice in a block.
  The same digit may occur 28 
28 16
    more than once in a row or
column, but it must be in a
13 8
  separate block.
5 16 3
28 26
    24 10

1 Small portable timepiece (5) 2 Chopping tool (3)
Coherent (5)
Thaw (4)
Be preoccupied with
3 Food provider (7)
5 Woman’s sleeveless
undergarment (7)
Using only the letters in the Wordwheel, you have 6 Distributed or
   ten minutes to find as many words as possible,
T N 10
something (6)
Important timber weighted out
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters A 12
or shade tree (3)
Edict (6)
in carefully
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
A E 14 Foodstuff grown in
paddy-fields (4)
portions (9)
7 Brief (9)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
M E 15 Dreadful (7) 8 One who presides
17 Bellow (4) over a forum
QUICK CROSSWORD 2 9 8 5 9 9 6 18 Fleshy underground or debate (9)
3 6 5 4 2 7 3 1 SUDOKU          stems or roots (6) 11 Hawaiian garland
4 8 9 1 6 3 4 2 of flowers (3)
L O I R I R          19 Had a meal (3)
1 5 3 2 8 9 7 13 Canal (7)
7 9 3 7 6 2
         20 Cargo ship designed to
         carry crude oil in bulk (6) 14 Contagious viral
T I C K S S I N C E 7 6 4 3 2 9 5 8 1
         disease, a form
9 8 1
7 6 8
1 8 2
7 1 3 2
21 Metallic element,
symbol Pb (4) of measles (7)
4 3 2 5 1 8 9 6 The nine-letter word was         
23 Prescribed guides for 16 Known (3)
F S I U W E 1 5 7 2 1 4 5 3
conduct or action (5) 22 Rapid bustling
S T O I C B A N N S 5 9 9 3 8 7 1          commotion (3)
24 Breakfast rasher (5)
26 CITYA.M. 13 JANUARY 2011

Arsenal have
Campbell’s header ensured Blackpool did
the double over Liverpool

DJ puts King
Picture: PA

it all to do after
Kenny in a spin
Priskin stunner
LIVERPOOL 1 them to Emirates Stadium in a fort-
night’s time, when Wenger will
Priskin fired wide with a rasping

IPSWICH TOWN 1 hope last night’s wretched display effort from distance while 17-year-

will be rendered irrelevant. old Connor Wickham played the

“I think we had an off night,” role of battering ram with glee.
BLACKPOOL striker DJ Campbell’s sec-
ond-half strike ensured Kenny Dalglish
ARSENAL 0 conceded Wenger (below). “You
could see from the start, every sin-
After the break Arsenal pushed
forward with increasing despera-
is still searching for his first win in his gle pass was a problem. We rely a tion, but with diminishing compo-

second spell as Liverpool manager. lot on our sharp, crisp passing and sure.
After defeat in the FA Cup third BY JAMES GOLDMAN that was always a problem. The hosts squandered a number
round at Old Trafford on Sunday, ARSENAL manager Arsene Wenger “We were not sharp, not of promising situations on
Dalglish saw his side react positively in admitted his side were “poor in creative and looked vul- the break, but 11 min-
the early exchanges at Bloomfield every department” as they slid to nerable defensively. utes from the end
Road, with Fernando Torres scoring an embarrassing Carling Cup semi- “As a team we did- Priskin ran clear of
from a tight angle after three minutes. final first leg defeat at Portman n’t have the wanted Johan Djourou and
But the lead lasted just nine min- Road. performance. I beat Wojciech
utes when Gary Taylor-Fletcher bun- Championship strugglers would say in every Szczesny with a pre-
dled his way past Daniel Agger and Ipswich, thumped 7-0 in the FA Cup department we cise finish.
finished smartly beyond Pepe Reina. at Stamford Bridge on Sunday, war- were below our “I believe we will
Blackpool, who won 2-1 at Anfield ranted immense credit for holding usual level.” turn it around but
in October, sent a crowd of over an Arsenal side which contained Ipswich afforded we got a good warn-
16,000 into ecstacy 21 minutes from Cesc Fabregas, Andrey Arshavin Arsenal a near total ing tonight that we
time when Campbell, unmarked, and Theo Walcott. monopoly of possession have to produce a differ-
headed beyond Reina from six yards. Indeed, the Tractor Boys but the Gunners were ent performance,” added Ipswich matchwinner
Dalglish, whose side are four points deserved to take more than the one unable to fashion a chance of note Wenger. “We lost the game because Priskin had been without
off the bottom three, said: “The hard- goal lead Tamas Priskin’s superbly in a first-half which saw Ipswich we didn’t play as well as we can, a goal since November
er we try, the luckier we’ll get. We are taken 79th minute strike affords grow in stature the longer it went that will be the lesson.” Picture: PA
trying very hard to turn our luck. At
the moment the luck is against us.”

Tottenham’s plans to demolish Olympic Avram granted more

Stadium would save club cool £200m time by Hammers board
were taken into account. view, and that trends in the European

David Keirlie, the architect working game show that clubs are increasingly
BY FRANK DALLERES with Spurs on both projects, said of ditching grounds with tracks for foot-
TOTTENHAM hope to save around their plans for the east London venue: ball-specific stadia.
£200m by tearing down the Olympic “It’s not entirely demolition. We will Spurs, for whom Gareth Bale (left)
Stadium and building a new ground be using some of the undercroft but has shone this term, are also thought
in its place, if they see off West we’re not using much. We may be to be confident they represent a more
Ham in the battle to move to the taking some elements to Crystal financially viable proposition than
site after the London 2012 Games. Palace for its redevelopment.” West Ham, based on a greater demand
Spurs want to scrap the track at West Ham have pledged to keep for tickets and stronger revenues.
the Olympic venue and deliver an the track, earning them the offi- Significantly, the club also believes
athletics legacy by instead redevel- cial endorsement of UK its proposals for Crystal Palace, which
oping existing facilities at Athletics, and were quick- involve increasing the capacity to
Crystal Palace, taking the er to go public with 25,000 and building a warm-up track,

total cost of the project to the their plans. Yet Spurs make for a more tangible and sustain- FOOTBALL years within touching distance the for-
region of £250m. feel they have a com- able legacy than retaining the track in BY JAMES GOLDMAN mer Chelsea boss has been given more
A new purpose-built stadi- pelling case of their Stratford, where access may be time to turn the club’s fortunes
um next to their current own as the two restricted by regular football matches. WEST HAM manager Avram Grant has around.
home, White Hart Lane, Premier League David Lammy, the MP for been handed a stay of execution by the Grant’s squad is to be bolstered by
remains a possibility, rivals await a deci- Tottenham, last night said it would be club’s owners following Tuesday Manchester City’s left-back Wayne
and would cost sion from the “astonishing” if Spurs were allowed to night’s Carling Cup semi-final first leg Bridge, who passed a medical yester-
around £250m for Olympic Park demolish the Olympic Stadium, which win over Birmingham. day ahead of his loan move until the
the arena itself. But it Legacy Company on 28 has cost £496m of public money, after With the Hammers currently root- end of the season.
is understood the final bill January. just a month of use. ed to the bottom of the Premier Bridge, who was at Upton Park on
would come to nearer £450m It is understood Meanwhile, Tottenham yesterday League table, the Israeli’s future has Tuesday night, has made just three
once other costs, such as Tottenham believe retain- confirmed that midfielder David been a matter of intense speculation, Premier League appearances this sea-
developing transport links ing the track would mean Bentley has joined Birmingham on much to his own annoyance. son, while his six other outings have
and local infrastructure, supporters having a worse loan until the end of the season. But with a first Wembley date in 30 all come in the Europa League.
CITYA.M. 13 JANUARY 2011 27

Woakes promotion pays off
The League Cup is the one domes-
tic honour still missing from the
England seal Twenty20
Arsenal manager’s CV. He’s been a
loser at the semi-final stage before. record as decision to push
In 2004 debutant up the order
Arsenal went
onto claim the results in last ball win
Premier League
title, but an own
goal from Jose

Antonio Reyes
helped Boro to BY JAMES GOLDMAN
record a 3-1 ENGLAND debutant Chris Woakes
aggreage win admitted he was shocked to be thrust
and reach the into the role of emergency matchwin-
final in Cardiff. ner as his late flurry with the bat
ensured England secured a world
record eighth straight Twenty20 win
Paul Jewell off the last ball of the match.
was in charge Worcestershire bowler Woakes, 21,
of Wigan in came to the crease with England look-
2006 when a ing down the barrel in their attempts
last minute to surpass Australia’s total of 157 for
extra-time nine.
strike from Last man Ajmal Shahzad took
Jason Roberts three balls to scramble a single
sent Wigan to but, with the game seem-
their first ingly slipping away,
major domes- Woakes tied the scores
tic cup final. with a cut for two
before lofting a drive Woakes hit the winning
from the final ball to runs on his debut off the
Spurs hadn’t win the match. last ball of the match
beaten their “At first I was No11 Picture: PA
main rivals for on the sheet and did-
nine years in n’t expect to come in,”
any competi- revealed Woakes. “But I
tion before got my promotion. I England’s rearranged Graeme Swann’s furniture. but when Woakes hit that six off Tait,
Aaron Lennon don’t think the result reposnse began After Shahzad belatedly managed Swanny just doffed his cap to Andy
and Robbie was ever in doubt. brightly with Ian to get himself off strike, Woakes fin- and understood why the decision had
Keane helped “I’m delighted to make my Bell scoring 27 from ished the job with a calmness and been made. He’s a true all-rounder.
end that run debut for England and it’s good 17 balls and Kevin authority which belied his lack of “It means a lot. It’s a world record.
with a 5-1 win to keep the momentum going that Pietersen thumping 25 from experience. We always say we want to create histo-
in 2008. the boys have started over here.” 11 before attempting to hit left-arm Skipper Paul Collingwood was ry and in this form of the game eight
Australia reached a more than com- spinner Steve O’Keefe out of the delighted at breaking another record wins is something very special. It only
petitive total, largely on the back of Adelaide Oval, but succeeding only in on Australian soil and was suitably takes that one performance to take it
Shane Watson’s 59 from 31 balls. holing out to Dave Hussey. impressed by the performance of away from you.
Indeed, the hosts were 83 without loss Eoin Morgan steadied the ship with England’s latest matchwinner. “We nearly had it taken away from
at one stage before some tight bowl- a fluent 43, but a flurry of late wick- He said: “Andy [Flower] said he was us by Shane Watson. It’s a good effort,
ing from Twenty20 specialist Mike ets left England needing four off the a serious batter. Swanny was a little that. I can’t see too many teams com-
Yardy reined Australia in. last five balls once Watson had disappointed he was ahead of him, ing close to that in the future.”

Lawes and Croft could play Results

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ENGLAND manager Martin Johnson is chance of playing rugby by the end of Forwards: G Chuter (Leicester), D Cole
refusing to give up hope that injured the tournament,” he said. “Tom is (Leicester), T Croft (Leicester), L Deacon
forwards Courtney Lawes and Tom making good progress and it’s the (Leicester), P Doran-Jones (Gloucester), email
Croft will be able to play a part in the same with Courtney, so they’re both N Easter (Harlequins), H Fourie (Leeds),
Six Nations. week-to-week and hopefully they’ll D Hartley (Northampton), J Haskell
Northampton lock Lawes (right), be fitter sooner rather than later.
player of the series for the autumn “Courtney saw the specialist (Stade Francais), C Lawes
(Northampton), L Moody (Bath), T
internationals, was thought to be last night and, like in all these
facing three months on the sidelines things, straight after the injury Palmer (Stade Francais), T Payne
with knee ligament damage. they take an image and (Wasps), S Shaw (Wasps), A Sheridan Bellamy arrested over assault claim of the Gulf,” said Platini.
Leicester flanker Croft, mean- interpret that. I (Sale), S Thompson (Leeds), D Wilson FOOTBALL: Wales and Cardiff City strik-
while, is another long-term would love him to (Bath), J Worsley (Wasps) er Craig Bellamy has been arrested by South Africa thrash India in ODI
absentee having fractured be out for just Backs: D Armitage (London Irish), C police investigating an alleged assault in CRICKET: South Africa made a perfect
his shoulder late last year. six weeks, it Ashton (Northampton), M Banahan Cardiff city centre. Bellamy, 31, has been start to their one-day series with India,
Both are sure to miss may be 10 (Bath), D Care (Harlequins), M Cueto bailed pending further inquiries. winning by 135 runs in Durban. India
the start of the Six weeks but it were all out for 154, chasing 290 as
Nations at the very least, is probably (Sale), T Flood (Leicester), RFlutey Platini proposes Gulf World Cup Lonwabo Tsotsobe took 4-31.
but Johnson named going to be (London), B Foden (Northampton), S FOOTBALL: Uefa president Michel Platini
both in his 33-man elite eight or Hape (Bath), C Hodgson (Sale), J has called for the 2022 World Cup to be Robertson too strong for Hendry
squad for the tourna- nine weeks. Simpson (Wasps), D Strettle (Saracens), played across the whole of the Gulf. SNOOKER: World champion Neil
ment yesterday and These things M Tindall (Gloucester), J Wilkinson Qatar will host the 2022 tournament Robertson avoided a first-round Masters
intends to monitor their can change week (Toulon), B Youngs (Leicester) with Fifa boss Sepp Blatter keen to hold shock with a 6-3 win over six-times
progress closely in the hope by week.” it in winter. “I hope it will be a World Cup champion Stephen Hendry.