PREMIUM
TICKETS
Issue 1,358 Wednesday 6 April 2011
HE’S BACK: RETURN OF THE
DOT.COM GODFATHER
TECHNOLOGY
s
BY RICHARD PARTINGTON
ONE of Wall Street’s biggest players in
the last dot.com bubble yesterday
returned with a bang to advise on the
biggest tech merger this year, as fears
mount over a fresh Silicon Valley crisis.
Former tech-banking heavyweight
Frank Quattrone has been catapulted
back into the limelight as adviser to
National Semiconductor on its $6.5bn
(£4bn) sale to Texas Instruments.
Advising the firm has put his bou-
tique investment bank Qatalyst
Partners in the big league, as the third
-largest player in technology merger
and acquisition activity so far this year.
Qatalyst has played a role in $10.3bn
worth of technology deals in 2011,
according to data provider Dealogic.
And just two of Wall Street’s banking
giants are placed higher – Goldman
Sachs and Morgan Stanley.
The boutique’s involvement repre-
sents one fifth of all deal activity in the
sector so far this year, as the volume of
mergers and acquisitions hits its high-
est level since 2007. In total, 1,500
deals have been proposed, at a com-
bined value of $59.3bn.
Yet the prince of Silicon Valley has
returned as storm clouds gather.
The high valuations being placed on
several technology firms have spooked
some analysts, who fear a new bubble
is emerging.
“Right now it looks like the money
is getting crazy big,” says principal ana-
lyst at Enderle Group Rob Enderle.
“There’s certainly a lot of money
being tossed around near the likes of
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Silicon Valley’s banker of choice Frank Quattrone (above) comes back with a bang to
advise National Semiconductor on its sale to Texas Instruments. Right: In the 1990s he
faced trial over alleged IPO kickbacks following the dot.com crash.
Facebook and Twitter, where their rev-
enues nowhere near stand up to valua-
tions.”
Quattrone helped to bring hundreds
of Silicon Valley’s fledgling firms public
in the 1990s, including Amazon.com
and Netscape.
But he all but disappeared from
investment banking after charges he
blocked an investigation into IPO kick-
backs following the dot.com crash.
He took time out to fight his case
through two trials, which were left
unresolved. He ultimately reached a
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UK SERVICE
SECTOR UP
MARCH SURGE
CONFIRMS GDP
REVIVAL P4-5
www.cityam.com FREE
Fed split as
QE2 set to
continue
s
US ECONOMY
BY JULIAN HARRIS
DIVISIONS within the US Federal
Reserve were exposed last night, with
the news that senior officials clashed
over the controversial second phase of
quantitative easing – dubbed QE2.
“A few participants indicated that
economic conditions might warrant a
move toward less-accommodative
monetary policy this year,” the March
minutes of the Federal Open Market
Committee (FOMC) said.
The minutes said that “a few” mem-
bers warned that the size of the Fed’s
balance sheet could lead to public
doubt over its tightening credibility,
and risk upward pressure on inflation
expectations.
Those unnamed members’ hawkish
views contrasted with those of “a few”
other members, who argued that
exceptionally loose policy could even
continue beyond 2011.
Yet despite signs of a split, “almost
all” participants felt that there was no
case for the Fed’s asset-purchasing pro-
deal with prosecutors. gramme to be curtailed.
Quattrone has since rebuilt his “The minutes suggest that the
reputation as Silicon Valley’s go-to majority of officials want to see QE2
banker, after he set up Qatalyst in through to the end,” said Paul Dales of
2008. Capital Economics.
Yet analysts have warned of a new Positive words on the US recovery,
dot.com bubble should companies plus the apparent commitment to
with high valuations and low rev- continue with QE2, saw US treasuries
enues go public. fall.
“The interest [in Facebook and Meanwhile, growth in the US serv-
Twitter] suggests IPOs could be phenom- ice sector slowed in March, according
enal, and if they peak and crash then to the ISM non-manufacturing survey
they could take a lot of things with released earlier in the day.
them,” Enderle said. UK SERVICES BOUNCE BACK: P4-5
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APOLLO VICTORIA THEATRE SW1V 1LG
 2 News
Clegg being too simplistic on interns
EDITOR’S LETTER
ALLISTER HEATH
SO Nick Clegg wants to discourage
unpaid internships, which he believes
entrench privilege. It is indeed desper-
ately important to make it easier for
children from poorer backgrounds to
get on in life. But Clegg’s broader argu-
ments are overly simplistic and could
actually end up reducing, rather than
increasing, opportunities.
It is much harder for poor young-
sters to work for free than it is for mid-
dle-class children. Some do it by taking
second, paid jobs in shops or restau-
rants at weekends and the evenings, or
by using some of their student loans.
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Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
Business Features Editor Marc Sidwell
Lifestyle Editor Zoe Strimpel
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WHAT THE OTHER PAPERS SAY THIS MORNING
KEY INVESTORS FLOCK TO GLENCORE
FLOTATION
Demand from key institutional
investors for shares in Glencore on its
flotation has been well above the
group’s expectations, particularly in
Asia and the Middle East, according
to bankers involved in the initial pub-
lic offering. The Swiss-based company
plans to allocate between 20 and 30
per cent of its IPO to so-called corner-
stone and anchor investors, which
commit themselves to buy ahead of
the launch of the flotation and usual-
ly are locked in for a certain period.
CAPITA FREEZES BASE PAY FOR SENIOR
EXECUTIVES
Capita, the public sector outsourcing
specialist, has played down any hopes
of generous pay rises for its 37,000
employees as it froze the base salaries
of its senior executives. But unions
dismissed as hollow the claim from
But internships can also help outsiders
proportionately more than wealthier
children, who would be more likely to
get good jobs anyway, even without
the benefit of the right internships.
They are the perfect opportunity for
bright, young people from impover-
ished backgrounds to impress and to
show that they have the drive, determi-
nation and other relevant skills to suc-
ceed. Because the application process
for internships tends to be less extreme
than that for actual jobs, the barriers to
entry that they face are lower in every
respect apart from the (admittedly cru-
cial) need for self-financing. In the vast
majority of situations, less attention is
paid to the background, university or
school of an intern applicant than of a
fully-fledged job applicant. Firms
aren’t scared of making a mistake with
interns – but they are much more wor-
ried about getting it wrong with real,
contracted staff.
Forcing firms to pay interns the
minimum wage would lead to a col-
lapse in the number of internships and
Commerzbank
to repay state
BANKING
▲
BY KATIE HOPE
GERMAN lender Commerzbank is
today expected to outline plans for a
capital increase of up to €10bn
(£8.7bn) in a long-awaited plan to
escape from the multi-billion euro
government bailout it received at the
height of the financial crisis.
Commerzbank, Germany’s second
largest bank, required an €18.2bn
bailout from the government in 2009.
The German government holds a
25 per cent stake in Commerzbank
via so-called “silent participation,” a
special form of non-voting capital.
Commerzbank’s management has
said it would like to free itself from
government influence as soon as pos-
sible.
Germany’s second-biggest lender
has said its repayment options
Capita that the management team
was “keen to lead by example and
demonstrate salary restraint through-
out the organisation”.
INVESTORS IN VALE VOTE FOR NEW
CHIEF
Shareholders of Vale, the world’s
biggest miner of iron ore, have voted
to replace its current chief executive,
Roger Agnelli, with a former director
of the company in a move seen as
aimed at increasing government con-
trol over one of Brazil’s key export sec-
tors. The company’s group of
controlling shareholders nominated
Murilo Ferreira as the new chief exec-
utive to replace Mr Agnelli.
LIVINGSOCIAL RAISES $400M FOR
EXPANSION
LivingSocial, the leading contender to
Groupon in the market for daily deals
on the internet, has raised an extra
$400m. The latest fundraising could
value the company at more than
$3bn, according to a formal filing.
hence opportunities. Experienced
workers would become relatively more
attractive. And if employers were com-
pelled to pay, they would become pick-
ier – it would become even harder for
outsiders to break in.
So what is the answer? First, don’t
force firms to pay interns. Second,
don’t exaggerate the role of intern-
ships: good grades in the right subject
at the right university, and learning the
right soft skills, are most important.
Third, raise money for scholarships to
pay for the work experience living costs
of 10,000 poor kids. Fourth, apprentice-
ships must go mainstream.
Ultimately, the dominant barriers to
social mobility are poor schools and a
culture of low expectations. That is
what politicians such as Clegg ought to
be focusing on.
IN PRAISE OF TALL BUILDINGS
If anybody hasn’t been around London
Bridge recently, I would recommend a
visit. The skyline has changed drastical-
ly with the emergence of the remark-
include raising capital, retaining
profits and using unneeded capital
reserves that are freed up as
Commerzbank reduces risky assets.
Commerzbank would need permis-
sion from its shareholders to proceed
with such a large share sale.
A vote on the repayment plan is
expected to take place at its share-
holder meeting scheduled for 18 May.
Commerzbank is believed to be flexi-
ble on how much it wants to raise
through the capital increase.
Commerzbank declined to com-
ment last night.
Commerz bank chief
executive Martin
Blessing has promised
the bank will repay
state support this year
PETROL PRICES AT RECORD HIGHS AS
HUHNE SAYS OIL MARKETS NEED
‘REALITY CHECK’
Petrol prices returned to record highs
yesterday, less than two weeks after
the Government pledged to alleviate
the pain of motorists and cut fuel
duty. Motoring organisations called
for a global meeting of energy minis-
ters to address a surge on internation-
al oil markets which took the sterling
price of crude to its highest ever level.
LONDON, THE FIRST CHOICE FOR
SECOND HOMES
One in four of Citi Private Bank’s rich-
est European clients is considering
moving abroad to escape high taxes,
the Citigroup subsidiary has found.
However, it said its richest clients, or
“ultra-high-net-worth individuals” —
those with $10m to invest — still
regarded London as a leading metro-
politan hub for the next ten years.
ably tall Shard, developed by Sellar.
Some people will hate it – but I love it.
Skyscrapers are sprouting up across
London, adding to the existing forest
in Canary Wharf and the Square Mile –
and transforming our city and its
office stock for the better. They include
the Pinnacle (or Bishopsgate Tower),
developed by Arab Investments and
due in 2013, subject to funding. The
Heron Tower at 110 Bishopsgate was
developed by Gerald Ronson’s Heron.
The Walkie Talkie (20 Fenchurch
Street) is being developed by Land
Securities and Canary Wharf and due
in 2014, as is the Cheesegrater (122
Leadenhall Street), from British Land
and Oxford Properties. I can’t wait.
Some dislike skyscrapers because
they are built for commercial use,
unlike St Paul’s Cathedral or the Palace
of Westminster. Rubbish. Tall build-
ings are a symbol of confidence, of
rebirth and of modernity – exactly
what Britain needs today.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
President Barack Obama’s budget talks with Republicans have hit an impasse.
Obama budget talks stall
US ECONOMY
▲
BY RICHARD PARTINGTON
BUDGET talks in the United States
have hit a stalemate after the White
House failed to reach an agreement
with the Republican-led House over
cuts.
Washington is now braced for a
shutdown in federal services – not
including armed forces and emer-
gency services – which could start next
week should lawmakers fail to reach a
deal by midnight on Friday.
VODAFONE CHALLENGES $2.5BN
INDIAN TAX BILL
Vodafone has raised concerns about
big ticket purchases of Indian compa-
nies, as it has gone to an Indian court
again over a $2.5bn (£1.5bn) tax bill.
The mobile phone giant has asked
India's top court to stop the Indian
government from demanding penalty
payments on the tax bill, which was
issued last October.
QATARIS $700M FORAY INTO BIGGEST
“DOWNTOWN DEVELOPMENT” IN
AMERICA
The Qatari government has made its
first foray into the US property mar-
ket by financing the $700m (£430m)
construction of CityCentreDC in
Washington. Qatari Diar Real Estate,
the property arm that has so far
focused on investments in London,
has emerged as the backer of the 10-
acre project.
CITYA.M. 6 APRIL 2011
NEWS | IN BRIEF
Former GSK chairman criticised
The former chairman of pharmaceutical
giant GlaxoSmithKline, Sir Richard
Sykes, has been heavily criticised for his
role in a controversial mining deal in the
Democratic Republic of Congo. The
chairman of the parliamentary group on
the great lakes region of Africa, Eric
Joyce, said Sir Richard had done his rep-
utation “immeasurable harm” in over-
seeing Eurasian Natural Resources
Corporation’s purchase of mining assets
in the country.
BA ups longhaul fuel surcharge
British Airways will raise its fuel sur-
charge on longhaul flights as the high
price of oil further squeezes European
consumers. BA will add £10 to the cost
of an economy flight and £20 to a pre-
mium ticket. The airline, which formed
the International Airlines Group when it
merged with Spain’s Iberia last year,
raised its surcharge two months ago
and had warned of further ticket eeprice
rises. BA chief financial officer Nick
Swift said: “As customers will know
from the price at the petrol pumps, the
cost of fuel has continued to rise signifi-
cantly over the past three months.”
Republicans want to push the dead-
line back a week and impose another
$12bn (£7.4bn) in cuts, yet Democrats
have called it unacceptable.
President Barack Obama met the
House speaker John Boehner yester-
day. He told a press conference he had
agreed to $33bn in cuts sought by the
Republicans, but that talks had stalled.
Opponents argue Obama’s plans
will do little to tackle the US deficit,
projected to hit $1.4 trillion this year.
Analysts said a shutdown appears
unlikely, as neither side benefits.
TRANSOCEAN EXECUTIVES TO DONATE
SAFETY BONUSES
Senior executives at Transocean said
they will donate their bonuses
received based on the rig-owner’s
safety performance last year to the
families of victims of the company’s
Deepwater Horizon explosion in the
Gulf. Five senior executives will
donate more than $250,000 to a fund
set up for the victims, the company
said.
LIONS GATE FINALISING NETFLIX
DEAL TO STREAM ALL SEASONS OF
“MAD MEN”
Lions Gate Entertainment, which pro-
duces the hit television series “Mad
Men”, is finalising a deal with Netflix
to stream all seven seasons of the crit-
ically-acclaimed show about a 1960s
advertising agency, according to peo-
ple close to the situation. The deal is
worth between $75m and $100m.
CITYA.M. 6 APRIL 2011 News 3

Clegg unveils drive

for social mobility
backgrounds, by 2014/15 and bringing

▲
POLITICS
BY JULIET SAMUEL
DEPUTY Prime Minister Nick Clegg
has promised to “open the doors of
opportunity” in a launch of policies
meant to improve social mobility.
They include setting up a commis-
sion to tackle the issue, increasing
access to pre-school education, spend-
ing £2.5bn on the pupil premium,
Clegg was forced to backtrack on his past practice of employing unpaid interns Picture: Micha Theiner/City A.M. extra money for those from deprived
professionals and high-profile speak-
ers into state schools to discuss their
career tracks.
Clegg said: “A fair society is an open
society where everybody is free to
flourish and where birth is never des-
tiny.” But he faced charges of hypocrisy
on the issue of unpaid internships,
which he benefited from himself.
Clegg said that he was wrong to have
employed an unpaid intern in the past.

Lisbon funds
running out “ WHAT COULD
BE SIMPLER THAN
as yields rise
Baa1, and said further actions could SPREADS?
”
▲

EUROZONE CRISIS
BY JULIET SAMUEL
PORTUGAL will go to the market for
€1bn (£873m) today in its second debt
sale in a week as the sovereign scram-
bles to avoid a bailout.
Following a second ratings agency
downgrade yesterday by Moody’s,
economists estimate that Lisbon has
€4.6bn of funds left, but needs to refi-
nance €9.2bn of debt and fund €5bn of
deficit spending between now and the
result of national elections in June.
That means the sovereign will need
to raise at least €10bn during a period
in which it has no government to
reign in spending and when yields are
already at record highs.
“What’s more, sharp and sustained
falls in market yields seem unlikely as
there is a significant risk that the gov-
ernment will fail to meet its budget
deficit goal,” says Capital Economics’
Emilie Gay.
Newedge’s Bill Blain yesterday
called the situation “pretty messy”.
Yields jumped yesterday after
Moody’s slapped a downgrade on
Lisbon’s debt, lowering it from A3 to
follow. The move follows a similar
downgrade from S&P last week, and
leaves the cost of Lisbon’s five-year
debt at ten per cent and ten-year at
8.75 per cent.
Moody’s cited growing political
uncertainty – Lisbon’s government
NOTHING.
collapsed after failing to pass an aus-
terity budget recently – and worse-
than-expected deficit figures for 2010
as reasons for the downgrade.
Portugal has a target of 4.6 per cent
of GDP for its deficit this year, but its
most recent release saw numbers for
2010 revised upwards to 8.6 per cent,
versus its 7.3 per cent target.
And the signs are that Lisbon’s
options are narrowing, as the
European Central Bank (ECB) is increas-
ingly reluctant to intervene in bond
markets to keep yields under control.
Although the ECB could wade in
during today’s sale, economists ulti-
mately see its bond-buying pro-
gramme as incompatible with a
widely anticipated rate rise, since the
latter will erode the value of sovereign
bonds and exacerbate the bank’s capi-
tal losses.

Rush for safety SEC plans end

sees gold surge to price swings
▲

MARKETS
PRICES of spot gold notched a record
high yesterday while Brent crude
ended above $122 a barrel, at a 2-1/2
year high, as Middle East unrest and
fears over Portugal fuelled a drive for
safety.
Brent crude prices rose as worries
about supply from oil-producing
countries in Africa and the Middle
East overshadowed China’s rate hike.
Brent futures settled up $1.16 at
$122.22 a barrel, while US crude
futures were down 32 cents at $108.15.
The oil price rise fed inflation fears,
supporting gold prices. Spot gold rose
to above $1,450 an ounce.
MARKETS
US securities regulators yesterday
unveiled a long-awaited plan
designed to protect the markets from
volatile price swings, following the 6
May “flash crash”.
The so-called “limit up-limit down”
proposal from the Securities and
Exchange Commission, would
require trades in US-listed stocks to be
executed within a range tied to recent
prices.
If approved, it would replace exist-
ing single-stock circuit breakers that
were implemented through a pilot
programme shortly after the flash
crash.
 4 News CITYA.M. 6 APRIL 2011

Lift in UK services sector confirms

dramatic bounce-back in growth...
UK ECONOMY its fastest rate for a year, while the data
SECTORAL BREAKDOWN OF SERVICES OUTPUT HOW IS THE SERVICE
▲

BY JULIAN HARRIS showed the first rise in work outstand-

GROWTH in the UK’s service sector

surged at its fastest rate for a year in
March, suggesting the economy has
sprung back from the reported con-
traction at the end of 2010.
The economy is now estimated to
have grown by up to 0.8 per cent in the
first three months of this year, accord-
ing to Markit, which compiled yester-
day’s service sector data.
At the end of 2010 the economy
stagnated, but the severe winter freeze
resulted in a 0.5 per cent contraction –
according to figures from the Office of
National Statistics.
Yet Britain’s largest sector hit an
index score of 57.1 in March, spiking
from the 52.6 reading the previous
month, Markit’s purchasing man-
agers’ index (PMI) showed.
ing since September 2007.
And firms in the sector increased
their number of staff in March, for the
first time in nine months.
Meanwhile, yesterday’s data were
mirrored in the Eurozone, where
strong services data contrasted with
a sluggish high street sales.
Retail sales across the single cur-
rency area fell 0.1 per cent in
February, compared to January -- an
annual rise of just 0.1 per cent.
Yet service sector activity jumped to
57.2 according to March’s PMI survey, a
three and a half year high.
The composite index, which meas-
ures services, manufacturing and con-
struction, reached 57.6 last month,
and has now signalled economic
expansion for 20 consecutive months.
However, there is a widening gap
SECTOR MEASURED?
18.8% 49.5%
Real Estate, Renting &
The purchasing managers’ index
(PMI) data does not include the
retail sector. In fact, high street
trade is not included in any of the
Financial Business Activities PMI surveys, conducted by Markit
and the Chartered Institute of
Services Purchasing and Supply (CIPS). “The
14.3% 6.2%
surveys originally began to fill a gap
in the Bank of England’s data,”
Markit’s chief economist told City
A.M. “The retail side was covered,
Transport, Storage & Hotels & but there was a need for in depth
Restaurants analysis of the UK’s services indus-
Communication try.” Financial services, including
insurance and pensions provision
and financial intermediation, con-
sist of almost a fifth (18.8 per cent)
ANALYSIS l Service Sector PMI of the private sector services. The

All figures above the no-change
rate of 50 indicate growth. The data
does not include the ailing UK retail
sector.
“Services activity growth surprised
well to the upside in March, and
points to the strongest expansion of
the sector since the economy was surg-
ing out of its recession early last year,”
said Markit economist Paul Smith.
Incoming new business jumped at
A Daimler Brand
11.2%
between the rallying core economies 65 PMI data provides prompt evidence
of the single currency area and the of the state of the economy as a
struggling periphery. “Output growth 60 whole, as well as a detailed break-
eased sharply in Ireland, Spain fell 55 down of the three main sectors –
back into a services-led contraction
and the downturn in Greek manufac- Other Personal 50
services, manufacturing and con-
struction. The data is now used to
turing continued,” the report said. 45 measure economic growth – or con-
“However, Germany and France saw
solid increases in new orders in both
Services 40
traction – in 26 countries and key
regions, including the Eurozone and
services and manufacturing.” 35 BRICS (Brazil, Russia, India and
BUT OECD WARNS ON UK CUTS: P17 2004 2005 2006 2007 2008 2009 2010 2011 China).

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CITYA.M. 6 APRIL 2011
...but retailers are
still feeling the heat
RETAIL
▲
BY JOHN DUNNE
MUSIC and DVD retailer HMV
plunged further into trouble yester-
day as it issued a third profit warn-
ing.
The embattled company saw its
shares tumble by up to nine per cent,
despite assurances that its credit
facilities were solid.
HMV warned that profit before tax
and exceptional items for the full-
year would be around £30m.
That is £8m down on what the
company estimated just a month
ago.
However, the music retailer said
its banking facilities “remain fully
available” and lenders continue to be
supportive.
It said lending tests would be held
on 2 July rather than 30 April to give
it more time to shore up its finances.
It said in a statement: “The group’s
banking facilities remain fully avail-
able, the group’s lenders continue to
be supportive and the group is main-
taining a regular and constructive
HMV’s chief executive Simon Fox saw the company’s shares drop again yesterday after a third profit warning
News 5
dialogue with them.” The company has been under
Last month, HMV said it expected intense pressure as consumers have
to fail tests set by its lenders if they moved to download music rather
took place in April. than buy CDs.
The company first admitted in The past week has seen a flood of
January that profits would be at the bad news from the UK high street,
lower end of expectations, guiding with off- licence Oddbins officially
investors then to expect £46m in entering administration and Dixons
profits before tax and exceptional issuing a surprise profit warning.
items. There were also disappointing
It further lowered expectations at updates from retail stalwarts
the beginning of March, saying prof- Mothercare and Laura Ashley, and all
its would not meet the market’s low- eyes will be on Marks & Spencer’s
est expectations, which were then sales figures this morning, which
£45m. analysts expect to fall by around six
Seymour Pierce analyst Kate per cent.
Calvert said: “The speed of deteriora-
tion in profitability of this business ANALYSIS l HMV
confirms that management’s strate- 30 p
gy is not arresting the very real struc-
tural pressures on the core retail 25
business from online. 12.25
“More radical action is needed, we 5 Apr
20
believe, in terms of store closures or
breaking up the business.”
Last month HMV put its 15
Waterstone’s chain of book stores up
for sale, having already decided in 10
January to shut 60 of its stores. 10 Jan 28 Jan 17 Feb 9 Mar 29 Mar
@ FOR MORE NEWS
www.cityam.com
6 News
Diamond says Pringles,
which it is buying from
P&G, will contribute to
sales of $1.8bn by 2012
$3.1bn
net 2010 sales for
$249m
Diamond’s 2010 net sales for
P&G snacks and culinary & retail nuts
pet care division
$321.4m
Diamond’s 2010 snack net
sales (combined figure for
Emerald, Pop Secret and
Kettle Crisps)
Diamond pays
P&G $1.5bn
for Pringles
▲
CONSUMER
BY RICHARD PARTINGTON
PROCTER & Gamble has agreed to sell
potato crisps brand Pringles to
Diamond Foods, in a deal worth
$1.5bn (£921.6m) in shares.
Offloading the 45-year-old brand,
known for its crisps sold in more than
140 countries, will mark the conglom-
erates departure from the food sector.
US-based Diamond Foods, which
owns a variety of snack brands includ-
ing Kettle chips, will triple the size of
its existing business with the pur-
chase.
Diamond will pay using 29.1m
shares of common stock and will take
on Pringles’ $850m of debt.
The deal is expected to be tied-up by
the end of this year, which will require
Diamond to pay about $100m to com-
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CITYA.M. 6 APRIL 2011
Diamond Food’s existing brands include Kettle
Brand crisps, Pop-Secret and Diamond nuts
plete the merger.
The California-based snack compa-
ny, which also owns Emerald nuts and
Pop Secret microwave popcorn, is pro-
jecting net sales of about $1.8bn by
2012.
The firm expects to see its sales
more than double in the US and UK by
adding Pringles to its stable.
The deal will also give Diamond a
foothold in the fragmented snack mar-
ket, currently dominated by PepsiCo’s
Frito-Lay snack business.
Janney Capital Markets analyst John
San Marco said: “It is still a fraction of
Frito-Lay’s snack business, literally
about one-tenth of the size.
“Aside from Frito-Lay, there are no
other real true global powerhouses.
Pringles is certainly in better strategic
hands as part of a dedicated snack
business.”
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8 News
Australian Treasurer Wayne Swan’s (left) decision will ASX boss Robert Elstone (left) and Atsushi Saito, head of
be eagerly awaited by Singapore exchange boss Magnus the Tokyo Stock Exchange, which owns a 4.9 per cent
Bocker (above), who would head up the new group stake in SGX, is happy for the deal to go ahead
Australia may
block SGX bid
for exchange
▲
EXCHANGES
BY ELIZABETH FOURNIER
THE Australian government has said it
intends to reject the Singapore
Exchange’s proposed $7.8bn (£4.8bn)
bid for Australia’s stock exchange, rais-
ing concerns that political challenges
could harm other exchange tie-ups.
The Singapore Exchange launched
its agreed takeover bid for Sydney-
based ASX last October, with a view to
ward off the threat from alternative
trading platforms and cut costs.
But Australian Treasurer Wayne
Swan said yesterday he would reject
the bid on advice from the Foreign
Investment Review Board (FIRB).
“FIRB informed SGX that I had seri-
ous concerns about the proposal and
that, subject to further consideration, I
intended to accept the unanimous
FIRB advice that the takeover would
not be in the national interest,” he said.
As well as approval from the FIRB,
the deal is subject to the Australian
government removing legislation that
prohibits any one party from owning
more than 10 per cent of ASX.
LSE to sell Italy Mid-April talks
unit for €30m set for NYSE bid
▲
EXCHANGES
THE London Stock Exchange, which
is currently seeking to buy the
owner of the Toronto Stock
Exchange, said yesterday it had sold
its non-core Italian unit Servizio
Titoli to Computershare.
The LSE said it would sell the unit
for an initial amount of €30m
(£26.2m).
Servizio Titoli provides sharehold-
er management services to listed
companies in Italy. The LSE’s pro-
posed C$3bn purchase of TMX
Group, which runs the Toronto
Stock Exchange, would create a
$7bn transatlantic exchange doing
$4 trillion in trading annually.
CITYA.M. 6 APRIL 2011
Though Swan said that a final deci-
sion had not been made, the markets’
response implied the market doubted
the deal could be saved. ASX shares
closed down 3.3 per cent, while SGX
shares closed 4.5 per cent higher.
Parties involved in ongoing
exchange mergers around the world
will be watching the deliberations
closely, with many also awaiting regu-
latory clearance of accepted bids.
London Stock Exchange’s bid to buy
Toronto Stock Exchange operator TMX
Group needs to overcome opposition
from Canadian banks and the home
government in Ontario.
ANALYSIS l ASX
39
AUD
38 33.70
5 Apr
37
36
35
34
Jan Feb Mar
▲
EXCHANGES
NYSE Euronext’s board of directors
plans to meet by 14 April to consid-
er Nasdaq OMX Group’s unsolicited
takeover bid, though no firm date
has been set, a person familiar with
the plan said yesterday.
On Friday, Nasdaq partnered with
US-based Intercontinental Exchange
to make an $11.3bn (£6.9bn) offer
for the Big Board parent, an attempt
to thwart a friendly $10.2bn
takeover offer from Germany’s
Deutsche Boerse. The counterbid
would bring together fierce US
rivals Nasdaq and NYSE and hand
the target company’s profitable
derivatives business to ICE.
© 2011 Herman Miller, Inc.

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 The Capitalist
10
COMING SOON TO AN
OLD PUB NEAR YOU... A
BRAND NEW WAITROSE
WAITROSE wants to grow – but
Britain seems strangely bereft of suit-
able sites for the grocer, which is
fighting a bitter convenience store
war with its bigger rivals. So a desper-
ate Waitrose has launched a highly
unorthodox appeal to landlords to
help it out.
All sites and all properties will be
considered, says the grocer – from
pubs to petrol stations – and if those
opportunities run dry, the business
will turn to developing brownfield
sites and arterial and out-of-town
locations. It’s radical stuff from the
green-logoed retailer.
“Sites urgently required for 2012,”
says Waitrose, in a property industry
magazine advertisement plea – the
second within a fortnight – asking
leaseholders to make contact with its
team of regional estate agents with
any suitable locations.
“We are looking at everything,”
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Book your Zoo tickets online at zsl.org
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in England & Wales: no 208728
said a spokesperson for Waitrose,
who said that while sites have been
secured for this year’s further 15
openings – including in Prince
Charles’s model village Poundbury in
Dorset – the business is “not yet sure
where we are with 2012 yet”.
It is astonishing that at the height
of a High Street crisis, which is seeing
a wave of shops go bust, that a retail-
er such as Waitrose is being forced to
hunt down old pubs to grow.
However, Tom Keys-Toyer, partner
in the Bristol office of King Sturge,
who oversaw the leases for the
planned Cardiff and Shrewsbury
shops, insists that “it is about making
sure every site is profitable and has
the right customer base,” he said.
So if you are desperate to get a local
Waitrose, you know what you have to
do. You just need to convince your
local publican to sell up to the chat-
tering classes’ favourite retailer.
VOTED LONDON’S BEST
TOURISM EXPERIENCE
Visit London Awards 2010
UNDERGROUND
CAMDEN TOWN
REGENT’S PARK
EDITED BY CITYA.M. 6 APRIL 2011
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist
Waitrose
urgently
needs sites
for the shops
planned for
2012, with all
locations and
all properties
considered
Waitrose’s Old
Brompton Road
store, which opened
RUNNING MACHINE
PASSERS-BY on the South Bank yester-
in January, is one of day morning stared in disbelief at the
the 23 convenience sight of a grown man running a full
shops the chain will marathon on a treadmill inside one
launch over 2011. of the capsules of the London Eye.
But the retailer That high-altitude human running
may soon be using machine was Noel Bresland, a senior
some less orthodox consulting manager at Deloitte, who
sites for its new has set himself the task of running
stores. 223 marathons over the next ten
years in aid of children’s charities
Children With Leukaemia and Bliss,
after his nephew Ethan died tragical-
ly just 223 days into his life.
Bresland, 35, is no stranger to
adventurous marathons, having com-
pleted one in the North Pole in 2004,
but his next feat – running the High-flier: Bresland’s Eyeathon
London marathon in 12 days’ time
dressed as Little Miss Naughty – is his Challenge, the Paris and Edinburgh
most outlandish yet. marathons and the Volcano triathlon
“We hope to break the world record in Lanzarote before they undertake
for the fastest book character catego- the Perthshire race. If they have any
ry, which is currently four hours and energy left, that is.
four minutes,” he told The Capitalist.
“It’s going to be challenging: the cos-
tume is very big and it weighs 20kg so
I’ll need to get used to that. I started
LIFE LESS ORDINARY
THE “adrenaline rush” that decided
practising today in the pod, actually.” the course of Risk Capital Partners
To support Bresland, please visit chairman Luke Johnson’s life came
http://223challenge.com. when the Dean of Oxford University
threatened to send him down if he
carried on having riotous parties in
HIGHLAND FLING his rooms in Magdalen College.
NOT to be outdone, Michael Savage, Undaunted, the 18-year-old Johnson
partner at Killik Capital, has rallied came up with the idea of switching
the investment fund’s troops to put the venue for his raucous parties to a
together a team of six to take part local nightclub, where he and his col-
in the Artemis Quadrathlon near league had the bright idea of charg-
Scotland’s Loch Tay on 9 July. ing guests on the door, while the club
The brokers will swim 1.3km, took the bar money.
kayak 11km, cycle 54km and “On the opening night, I arrived 20
run 25km over seven minutes early – and there was already
munros, all within a a queue,” he told an audience of
day – and Savage reck- young entrepreneurs at The Hospital
ons the quadrathlon Club. “In that split second, I knew
will be “the most
gruelling physical
that is what I wanted to do with my
life: I wanted to spend my career
test any of us have
undertaken”.
building companies as an owner.”
As good as his word, Johnson (pic-
So the other five tured left) famously went on to
team members – become the chairman of
Tim Shaw, Ben Superbrands, Giraffe Restaurants and
McKeown, Jer Channel 4, to name but a few of his
O’Mahony, Sam successful operations.
Younger and Just don’t remind him of his forays
Gordon Smith – are into diet software, restoring classic
taking no prisoners cars and reselling share registers.
with their training “I think it’s fair to say [those proj-
schedules, fitting in ects] were resounding flops,” he said.
feats such as the “But a life without risk-taking is a life
Three Peaks too boring to contemplate.”
CITYA.M. 6 APRIL 2011
Amlin Japan
losses set to
reach £150m
▲
INSURANCE
BY ALISON LOCK
CATASTROPHE insurer Amlin yester-
day said it expected to lose up to
£150m in claims from the twin earth-
quake and tsunami catastrophe to hit
Japan last month.
Amlin, a Lloyd’s managing agent,
said it estimated its Japan losses
would range from £80m to £150m
based on a $12-25bn (£7.4-15.5bn) loss
to the overall industry.
It was exposed to a £110m loss from
the earthquake that decimated
Christchurch in New Zealand in
February, while floods in Australia in
January would cause £15m of claims,
it said in an update on its first-quarter
catastrophes.
Its maximum loss already this year
could therefore hit £275m before any
claims from US hurricanes, which
start in about August, are added.
But underwriting director Simon
Beale said it was protected against
any further heavy losses this year.
“Amlin’s reinsurance programmes
provide increased levels of reinsur-
ance protection for any further catas-
trophe events during 2011,” he said.
The losses in Japan will be to its
marine insurance, commercial prop-
erty and reinsurance business lines.
But Beale said insurance premium
rates were showing signs of rising in
areas affected by the disasters, offer-
ing some hope that the losses could
be offset by higher income in future.
“Early market signs suggest
that...loss affected areas will see
strong rate increases,” he said.
Amlin’s shares closed up 0.75 per cent.
ANALYSIS l Amlin
420 p 389.60
5 Apr
400
380
10 Jan 28 Jan 17 Feb 9 Mar 29 Mar
News 11
Tokyo Electric
Power shares
at 60-year low
ENERGY
▲
SHARES in Tokyo Electric Power slid
Amlin expects losses between £80m and £150m from Japan’s disasters Picture: REUTERS 18 per cent to a 60-year low yesterday
on fears the firm won’t have enough
ANALYST VIEWS: ARE THESE LOSSES BETTER money to compensate victims of its
crippled nuclear plant and uncertain-
OR WORSE THAN EXPECTED? Interviews by Alison Lock
ty over the government’s ultimate
intentions for the utility.
Tokyo Electric, or TEPCO, is consid-
ering early compensation payments
SARAH LEWANDOWSKI | PEEL HUNT to victims of the disaster at its strick-
“
en Fukushima Daiichi nuclear plant,
executive vice-president Takashi
Amlin’s estimated loss of £110m for the second New Zealand earth- Fujimoto told a news conference.
quake is substantially below its £160m loss to the first earthquake in September.
”
The company is yet to determine
Losses from New Zealand and Japan are close to triggering its reinsurance pro- the extent of the damage from the 11
tection, and if estimates deteriorate they will be partly recoverable. March earthquake and tsunami that
knocked out a fifth of its power-pro-
ducing capacity. But Bank of America-
EAMONN FLANAGAN | SHORE CAPITAL Merrill Lynch estimated last week
“
TEPCO could face compensation
claims of more than $130bn (£80bn).
Overall these losses are broadly where we might have expected for TEPCO has so far offered 200m yen
Amlin, if not slightly lower. Crucially, the reinsurance programmes remain intact
”
(£1.5m) in “condolence money” to 10
and available, if required, for the 2011 hurricane season.
towns to aid people forced to evacuate
from near its stricken plant or affect-
ed by radiation leakages. This is sepa-
rate from any formal compensation.
NICK JOHNSON | NUMIS The price of insuring TEPCO debt
“
against default has spiked as more
investors bet the company will strug-
The upper-end estimated loss of £150m appears to be broadly in line gle to pay creditors.
with our expectations. Positive commentary on the outlook for premium rates is The share price plunge to 362 yen
”
likely to support its valuation, but we prefer Lancashire and Hiscox as the key win- comes as India yesterday banned all
ners post-Japan, based on their superior positioning for growth. food imports from Japan.
 12 News CITYA.M. 6 APRIL 2011

Relief for banks as

INVESTMENT BANKING FEES Q1 2011
Q1 2011 Q1 2010 Banks Fees (bn)
1 1 JP Morgan $1.39

3
3

4
BoA/Merrill Lynch

Morgan Stanley
$1.36

$1.21
2011 sees fees rise
4 2 Goldman $1.20

▲
BANKING
BY JULIET SAMUEL second to fourth on what the bank investment banks. The third largest
has admitted has been a “slow start” fee-payer was Citigroup, which paid
INVESTMENT banks have raked in to the year. Its fees income rose six $1.42bn to its rivals, mostly for equi-
5 6 Deutsche $1.02 their largest first-quarter fees pool per cent to $1.96bn, but it was over- ty transactions.
since 2007 with fees up eight per taken by Bank of America/Merrill Work on mergers and acquisitions
cent globally on last year, according Lynch and Morgan Stanley, both of (M&A) brought in the most cash,
6 9 BarCap $0.926 to Thomson Reuters data released which saw their fees revenues jump generating $7.06bn in fees in the
yesterday. by more than a quarter. first quarter of this year, up slightly
The UK and Ireland saw fees drop Another faller was Citigroup, from $6.84bn in the same period last
7 7 Credit Suisse $0.925 5.4 per cent, however, versus north
America, where fees income rose
where fees rose only five per cent to
$908m, dropping the bank to eighth
year. Morgan Stanley had the largest
“walletshare” in M&A, its traditional
13.4 per cent. place from fifth. strength, accounting for 6.8 per cent
Barclays Capital was the biggest Strikingly, the four biggest fee-pay- of earnings. The rise in fees will pro-
8 5 Citi $0.908 gainer among banks, with its fees ers include three firms bailed out by vide some relief for banks that
up 41.5 per cent to $925.8m, enough the US government, with Fannie saw business slow in the latter
to boost the bank three places Mae, Freddie Mac and AIG account- half of last year, particular-
9 8 UBS $0.677 further up the rankings to sixth ing for 22.3 per cent of all fees ly as bond trading
globally. that investment banks charged glob- dried up due to the
JP Morgan retained its position at ally. Eurozone sov-
10 12 Nomura $0.411 the top of the league, bringing in
$1.39bn, while Goldman fell from
Since 2009, the three institutions
have handed over $3.6bn in fees to
ereign debt
crisis.

Small firms see no effect from Merlin as

banks sign up to new lending code
▲

BANKING site launched by the British Bankers’ the effectiveness of the new
Association (BBA) and supported by code. The BBA is now
THE UK’s major lenders have gone Lloyds, Barclays, HSBC and RBS, embarking upon a
on the offensive to convince small promises to give small enterprises a roadshow to pro-
businesses that they are freeing up chance to appeal if they believe their mote the new
credit, signing up to a new lending request for credit has been unfairly website.
code and launching a website to help refused.
businesses access loans. The appeal will be judged by
But a survey of 500 small business- another individual at the bank
es released yesterday showed that 75 who has not previously been
per cent of respondents have seen no involved in the case, with for-
change in banks’ attitude since the mer CBI small business
government rolled out Project council chair Russel
Merlin, a deal between the banks Griggs appointed to
and the treasury in which they produce an
promised to increase credit available a n n u a l
for small firms by 15 per cent this report
year. o n
Just over 40 per cent of those
queried by Hotfrog, an international
small business directory site, said
they were most likely to use
personal savings to expand
their business.
A new lending
code and web-

NEWS |
IN BRIEF
Eaton sued for gender bias
Two New Jersey women filed a $150m
(£92m) lawsuit accusing their former employer
Eaton Corp of gender discrimination in pay and pro-
motions. Yesterday’s complaint, filed in the US district
court in Manhattan against Eaton and three male managers
contends that the century-old maker of industrial products pro-
motes a “culture of gender hostility”, especially in its electrical serv-
ices sector.

Louis Dreyfus weighs up listing or merger

Louis Dreyfus, one of the world’s top commodity firms, is considering a stock mar-
ket listing, a merger or bringing in a private investor to fund future projects.
Margarita Louis-Dreyfus is holding talks with the company’s minority shareholders, who
can demand that the group buy them out from next year, and said that Louis Dreyfus had to be
“prepared for all options”. Merger talks between Louis Dreyfus and smaller Singaporean rival Olam
International Ltd failed earlier this year. It has also been reported to have held merger talks with other
rivals, including Swiss-based Glencore International.
CITYA.M. 6 APRIL 2011 News 13

NEWS | IN BRIEF
Intesa board set to back capital hike
Intesa Sanpaolo’s boards were set yesterday to back a €5bn cash
injection as Bank of Italy head Mario Draghi said the coun-
try’s lenders’ response to his call for them to boost their
capital was “very encouraging”. Traditionally conser-
vative, Italian banks weathered the global finan-
cial crisis better than many European rivals.
Intesa Sanpaolo, Italy’s largest retail
bank, already enjoys a core Tier 1
ratio of 8.1 per cent, which
would increase by another
1.5 per centage points
once the hike is
approved.

NEWS |
IN BRIEF
Moncler seeks Italian IPO
Outerwear maker Moncler, known for its
trendy goose down jackets, is seeking an
initial public offering (IPO) on the Milan bourse, the
company said yesterday. Global coordinators are Intesa
Sanpaolo's Banca IMI, Morgan Stanley and Bank of
America Corp's Merrill Lynch, it said in a statement. Revenues
last year were €429m ($608.5m) and net income €52m, it said.
Earnings before interest, tax, depreciation and amortisation were
€102m. Marco De Benedetti, an executive with leading shareholder Carlyle
Group, said in a February newspaper interview that a listing could take place
by this summer.

Mercedes-Benz recalls M-Class over cruise control worries

Daimler’s Mercedes-Benz is undertaking a global recall of some of its older-model M-Class
sport utility vehicles for issues related to cruise control that may lead to a crash, Daimler and US
federal safety regulators said yesterday. A wide majority of the vehicles being recalled are model
year 2000-2002 M-Class SUVs, but there are a small number of 2000-2004 AMG performance vehicles
also involved. Some 136,751 vehicles will be recalled in the US and about 50,000 in Germany, said Mercedes-
Benz representatives in those two countries. Daimler representatives at its world headquarters in Germany did
not provide a global recall figure. No crashes or injuries have resulted from the issue, said Mercedes-Benz USA
spokesman Rob Moran.

EU proposes
Nomos leads the vote on pay
Russian IPO charge for investors
bank, was the last of the quartet to source close to the deal said previous
▲

RETAIL REGULATION
▲

BY HARRY BANKS announce a price range for its share market estimates of $700m remained
sale. the fund-raising target. COMPANY managers across Europe
THE charge of Russian companies The order book on sugar and pork Last week the IPO market was set may have to put their pay packets to a
looking to London to go public picked group Rusagro’s $300m listing is back when Omani based Renaissance shareholder vote and introduce a
up yesterday, as mid-size bank Nomos already fully subscribed ahead of a pulled the £1bn flotation of its oil quota for women executives under
confirmed plans to float 20 per pricing on Friday, a source close to services subsidiary Topaz Energy. proposals from the European
cent of its stock and several more the deal said. The banks took the decision on Commission announced yesterday.
issuers eyed talks with investors. Mobile phone retailer Euroset is the day they were supposed to be pric- The European Union’s executive
The easing of market volatili- seeking up to $1.52bn it said on on 1 ing the float after it became clear Commission published its proposals as
ty, which spiked last month April, while real estate developer that demand had been lower than it considered how to boost shareholder
on fears of a nuclear crisis in Etalon began roadshows for an up to expected. involvement in the running of compa-
Japan and unrest in the $650m float on Monday. nies in the EU’s 27 member states.
Arab world, has sparked Nomos, whose offering will While banks would not be the only
renewed interest in list- close with pricing on 19 April, said it MEET THE ADVISERS firms covered by any new law, rising
ings, with Russian would place ordinary shares at $32 to pay in London’s financial centre and
firms leading the $37, or $16.0 to $18.5 per global elsewhere has increased pressure to
charge. depositary receipt (GDR), in London widen last year’s EU rules that cut the
Nomos kicking and Moscow.
PATRICK FROWEIN amount of cash bankers can receive in
off the roadshow The initial public offering (IPO) will bonuses.
for its $700m largely comprise the sale of existing DEUTSCHE BANK In the EU document outlining the
(£430m) listing shares by 18.7 per cent shareholder reach of potential legislation, officials
means four Roman Korbacka, as well as the plac- said “a mismatch between perform-
Russian issuers ing of new shares worth around DEUTSCHE Bank’s advisory team to ance and executive directors’ remuner-
are now touring 5.5bn roubles ($195m). Nomos is being led from Frankfurt by ation has... come to light” and they
investors, seeking The bank’s other major sharehold- managing director in equity capital proposed a mandatory disclosure of pay
to raise a com- ers, Russian businessman Alexander markets Foruhar Madjessi, the bank’s as well as a shareholder vote on pay.
bined total of just Nesis’ (pictured left) IST group and global head of diversified industrials. The EU proposal, which is now open
over $3bn -- more Czech PPF Group, controlled by Czech Patrick Frowein worked from London for public comment and could change
than half the tycoon Petr Kellner, do not plan to on the proposed dual listing. Frowein before becoming law, also considers
$5.5bn raised by reduce their stakes in the bank dur- joined Deutsche Bank in 2006 from gender quotas to boost the number of
Russian firms in ing the IPO. UBS, where he took on various roles, women on management boards and
the whole of At present, PPF Group holds 28.24 including as executive director in limits on the number of jobs for non-
2010. The compa- per cent in NOMOS-Bank, while IST UBS’ industrials team. He started his executive directors.
ny, Russia’s group holds 18.66 per cent. career at Deutsche Bank as head of EU officials estimate that roughly
eighth The bank said the offering would European capital goods. one in 10 seats on supervisory boards
biggest value it at $2.8bn to $3.2bn, while a are occupied by women.
CITYA.M. 6 APRIL 2011
Equinox delays
Lundin decision
to consider deal
▲
MINING
EQUINOX extended its $4.8bn
(£2.9bn) bid for Lundin Mining, and
postponed a vote on the deal by two
weeks yesterday, as it awaited a for-
mal $6.5bn takeover offer from
China’s Minmetals Resources.
Minmetals, China’s biggest metals
trading firm, unveiled plans to
launch a C$7 a share bid for
Canadian firm Equinox on Monday,
chasing its copper assets in Zambia
and Saudi Arabia.
Equinox said it was considering
the proposal and would update
investors on it “in the coming days”.
Equinox postponed a shareholder
vote on the Lundin deal to 26 April
to give investors time to consider the
board’s and any other recommenda-
tions on Minmetals’ share offer and
the Lundin deal before they have to
vote. Minmetals, which already has
a 4.2 per cent stake in Equinox, said
it would only go ahead with the
offer if Equinox dropped its bid for
Lundin.
Satyam and PwC
settle US fraud case
REGULATION
▲
BY HARRY BANKS
SATYAM Computer Services and its
former auditor PwC agreed to pay a
combined $17.5m (£10.7m) to settle
US probes into an accounting fraud
that in 2009 became India’s biggest
corporate scandal.
Satyam, an outsourcing company
now known as Mahindra Satyam, will
pay $10m to settle US Securities and
Exchange Commission (SEC) charges
it fraudulently inflated revenue,
 

!
income and cash balances by more
than $1bn over five years.
Separately, India-based affiliates of
PwC agreed to pay $7.5m in record
settlements of related charges by the
SEC and the Public Company
Accounting Oversight Board (PCAOB).
The SEC called its $6m accord with
NEWS | IN BRIEF
Mouchel chief executive Richard Cuthbert has been with the firm since 2002
Water under the bridge for Costain
Costain, the construction firm that
walked away from Mouchel’s
stonewalling after four months, has
plenty to be getting on with.
The firm has a forward order
book worth £2.4bn, including a con-
tract to build the first major road to
cross the River Thames in 20 years.
While Mouchel seems to have
slipped through the net for now
(Costain has reserved the right to
wade in again under the rules of
the City Code), analysts expect the
firm to instead move its attention to
picking out smaller acquisitions.
Mouchel, meanwhile, is left
floundering in the public sector
services market alone.
Both Costain and Interserve cut
five PwC affiliates its largest involving
a foreign-based accounting firm,
while the PCAOB said the $1.5m pay-
ment by two of those affiliates repre-
sents its largest civil money penalty.
Satyam founder and former chair-
man Ramalinga Raju surprised
investors in January 2009 when he
said the company had overstated
earnings and assets for several years,
in a fraud dubbed “India’s Enron.”
The revelation caused Satyam’s shares
to plummet. Satyam agreed to pay
$125m to settle US shareholder litiga-
tion over that decline.
“The fact that Satyam’s former top
officers were able to maintain a fraud
of this scale represents a company-
wide failure of extreme proportions,”
Cheryl Scarboro, chief of the SEC’s for-
eign corrupt practices act unit, said.
their offers after examining the
firm’s books, and last week’s results
missed forecasts that were already
revised downwards. The company is
also likely to sell off assets in order
to meet a debt repayment in May
2012 – further distraction from the
day-to-day work that Mouchel man-
agement is desperate to focus on.
Mouchel needs to stage a spectac-
ular turnaround to justify spurning
two suitors that could have helped
shield the firm from public sector
turbulence. Only the most patient
investors will stick around.
BOTTOMLINE
Analysis by Marion Dakers
)
Mouchel falls
after bids fail
M&A
▲
BY MARION DAKERS
SHARES in road maintenance group
Mouchel dropped further yesterday
after both Costain and Interserve
walked away from their takeover
offers, amid uncertainty about the
company’s future.
Mouchel’s shares have tumbled
more than 40 per cent since rejecting
a string of bids at the end of March,
and yesterday analysts downgraded
their forecasts.
Numis analyst Francesca Raleigh
cut pre-tax profit forecasts by nine
per cent, adding that “an unsuccess-
ful outturn following 13 months of
various bid approaches could poten-
tially lead to an investor backlash
against the board, leading to board
changes”.
Chief executive Richard Cuthbert
has been with the firm since 2002.
Other analysts said the board is
mostly made up of new members fol-
News 15
lowing a reshuffle in 2010, and that
support for the firm’s tough stance
on takeover interest suggests that
shareholders will back the board.
Some investors in Mouchel, includ-
ing Schroders, which holds a fifth of
the firm’s shares, have also voiced
concerns about the company’s ability
to improve financially.
The firm last week reported a pre-
tax loss of £1.53m after several profit
warnings.
Costain, however, has been
applauded for walking away from
the takeover, though its shares also
dropped yesterday.
Andy Brown at Panmure said:
“[Costain’s] strategic aims will now
be met by smaller moves, which is
likely to be better received by
investors.”
Mouchel shares closed down 4.5
per cent at 78p, well below Costain’s
final offer price of 153.2p per share,
while Costain shares lost 5.4 per cent
to close at 247.8p yesterday.
 
" 
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Specialist healthcare company BTG has Tanfield saw a turnover of £43.5m, a
said results for the year ending March rise from £43.1m a year earlier.
will be in line with their previous guid- 
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cent to 37p yesterday despite the firm Wachovia, acquired by Wells Fargo in
having announced it expected 2011 to late 2008. The SEC said Wachovia had
be a transitional year of recovery. The violated the law in two different ways.
maker of aerial work platforms man- In one instance, it sold overpriced col-
aged to slightly reduce its operating lateralised debt obligations, or CDOs, to
loss before impairments in 2010 to the Zuni Indian Tribe and another indi-
£15.8m, compared to a loss of £16m in vidual investor.
 16 News CITYA.M. 6 APRIL 2011

Protests about tax payments have no effect

The protest movement has attempt-
ed to shame brands that it claims
have dodged UK taxes. A series of
actions began on 27 October last year
when Vodafone’s Oxford Street store
was closed by protesters. Similar shut-
downs have occurred across the coun-
BRANDINDEX try since then and following The
Arcadia Group’s BHS and Topshop
there has been no real movement in
their corporate reputation score since
the protests started with the com-
bined score of the five being +77 back
on Oct 24 and a near identical +78
this Monday.
So UK Uncut has either failed to
(either positive or negative) about the
brands.
We can conclude that the actions
of UK Uncut are going largely unno-
ticed (at least in terms of the specific
ANALYSIS l Attention received by brands
60.0
brands it targets) and therefore can-
not impact on the general popula-
tions’ views.
Stephan Shakespeare is chief executive of
YouGov.
ANALYSIS l Brands' reputation
40.0

STEPHAN SHAKESPEARE March for the Alternative on Saturday

26 March a number of stores includ-
interest people in its campaign or
interested them but not moved their
50.0
30.0
ing Topshop and Boots on Oxford views of the targeted companies. The 40.0
Tesco Vodafone 5 Brand average Bhs Boots 5 Brand average

S
OMETIMES no change at all can Street were closed and Fortnum and attention scores for those brands 30.0 20.0
be as interesting as dramatic Mason occupied. show that it is the first of those prob- 20.0
movements and that is certainly But the net result of this action on lems that they have. 10.0
the case when we look at brands consumer perception has been zero. Once again we see that there has 10.0 Source: YouGov
Source: YouGov
that have been targeted by UK Uncut If we look at five of the key brands tar- been no significant change in the 0.0 0.0
over the past five months. geted; Vodafone, Boots, Tesco and the number of people hearing anything 25 10 2010 02 12 2010 11 01 2011 30 03 2011 1 10 19 28 37 46 55 64 73 82 91 100 118

NEWS | IN BRIEF
Blockbuster bidding auction begins Geithner in corporate tax overhaul
A bankruptcy auction for movie rental
chain Blockbuster began with a $284m
(£174.4m) bid from Dish Network yester-
day, quickly topped by rival groups led by
billionaire Carl Icahn and hedge fund
Monarch Alternative Capital. The Icahn
group bid $291.4m, while Cobalt Video, a
hedge funds led by Monarch, offered
$290m, said Blockbuster lawyer Stephen
Karotkin, who was leading the auction.
The Obama administration is preparing a
comprehensive proposal for corporate tax
reform in an effort to kickstart the legisla-
tive process in Congress, US Treasury secre-
tary Timothy Geithner said yesterday.
Geithner said the proposal would have to be
revenue neutral, so that a cut in the corpo-
rate tax rate would have to be offset by
new revenue from the elimination of special
preferences.

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CITYA.M. 6 APRIL 2011 Economics 17

OECD warns
Inflation set CHINA HIKES RATES

on impact of
to hit 4.8pc, cuts on UK
warns Lloyds

▲
WORLD ECONOMY
BY JULIAN HARRIS
BRITAIN’S growth over the next three
months will be roughly one third the
pace of other major world economies,
UK ECONOMY money starts to become more actively according to forecasts from the
▲

BY JULIAN HARRIS
INFLATION in the UK will reach 4.8
per cent this year, a leading City price
watch monitor said yesterday.
The release came ahead of tomor-
row’s Bank of England announce-
ment on interest rates.
Starting today, the monetary policy
committee (MPC) will discuss
whether to begin normalising Bank
rate, after more than two years at the
historic low of 0.5 per cent.
“The annual consumer price index
rose from four per cent to 4.4 per cent
in February -- the 41st consecutive
month above the government’s two
per cent target,” the report from
Lloyds said.
“Although we expect inflation to
drop back over the medium term,
there is a clear risk that rising infla-
tion and inflation expectations
become entrenched,” said Lloyds’
economist Adam Chester.
Arguably the largest risk to stable
prices in the UK comes from the
Bank’s policy of quantitative easing,
the report said.
“An extra £200bn of cash (13 per
cent of nominal GDP) has been inject-
ed into the economy,” it states.
“So far, it appears this money is
largely lying idle in commercial
banks’ reserve accounts but if this
employed, inflation pressures could
escalate rapidly.”
And on top of “some tentative evi-
dence” of inflation expectations fol-
lowing through to wage settlements,
the UK also faces a risk from more
persistent input price inflation, the
report said.
The risk from imported inflation
could come from “a sharp deprecia-
tion” in sterling, or if “pressures on
global spare capacity continue to
rise.”
However, Lloyds still expects infla-
tion to drop below two per cent by the
summer of next year.
The Bank of England’s chief dove,
Adam Posen has said he will not run
for a second term at the Bank if infla-
tion persists above the two per cent
target rate through to the middle of
2012.
ANALYSIS l Consumer Price Index
6 %
5 4.4%
4 liminary estimate is that the loss of
3 5.2 per cent of annual GDP,” it said.
2 Growth in Japan could be hit by up
1
0
Source: ONS
Aug 09 Feb 10 Aug 10 Feb 11
Organisation for Economic Co-opera-
tion & Development (OECD)
The Paris-based thinktank predicts
annualised quarterly growth in
Britain of just one per cent for the
three months to the end of June, sub-
stantially lower than the average 2.9
per cent for the G7 leading
economies excluding Japan.
Last month the OECD slashed the
UK’s growth forecast for 2011 to 1.5
per cent from 1.7 per cent warning
the economy faces “significant head-
winds” from spending cuts and ris-
ing commodity costs.
The OECD said private sector
investment and growing internation-
al trade were boosting G7 economies.
Growth in the G7 economies out-
side Japan could rise to an annu-
alised rate of about three per cent in
the first half of 2011.
However, Japan faces a severe eco-
nomic knock from the natural disas-
ter that struck in March.
“The full cost of the disaster is not
yet known, but the authorities’ pre-
physical capital amounted to 3.3 to
INTEREST rates in China were hiked for the second time in 2011 yesterday. Benchmark one- to 0.6 per cent for the first-quarter of
year deposit rates rose 0.25 per cent to 3.25 per cent and one-year lending rates went up 0.25 the year and up to 1.4 per cent from
per cent to 6.31 per cent. The central bank has tightened policy since food price inflation April to June, the OECD calculated
soared upwards last year, provoking widespread concerns. MORE: P22-P23 Picture: GETTY yesterday.

CITY VIEWS: SHOULD THE BANK OF ENGLAND RAISE INTEREST RATES

TOMORROW? Interviews by Phoebe Torrance and Robert Leedham

ANTHONY JEFFERYS | OLIVER STAPLE | MATTHEW HART |

AXA INSURANCE HORN & CO ALLIANZ

“Yes I think it should start to “As someone with a mortgage, I “No, not yet, this isn’t the right
increase Bank rate. Mainly would prefer interest rates to time for the Bank of England to
because inflationary pressures stay as low as possible, really. be hiking rates. It could damage
are too heavy at the moment, Also, with the economy as it is, I the recovery and besides, it
and the rise in think that we need looks as if pres-
oil prices to be encour- sure on infla-
means an aging people tion could
interest rate to spend, not come down
increase is all dissuading in the near
but inevitable at them from future in any
some stage.” spending.” case.”

NEWS | IN BRIEF
EU regulation hits small firms
The Federation of Small Businesses
(FSB) warned yesterday that micro
firms will be hard hit by the large num-
ber of regulations that come from the
European Union, despite the start of
UK government’s moratorium on regu-
lations. The overall cost of red tape to
businesses in the EU is €124bn yearly.
Homeowners upbeat on prices
Three out of five – 59 per cent – of
homeowners in the UK expect house
prices to rise over the next six months,
according to the latest survey by prop- Exit activity at record levels
erty website Zoopla. It also reports Private equity backed exits remained
growing optimism from homeowners. at record activity in the first three
months of the year, researchers at
Australia keeps rates on hold Prequin revealed yesterday. “Fund
Australia’s central bank kept interest managers are realising the mega-sized
rates steady at 4.75 per cent for a fifth investments made during the buyout
month yesterday, arguing that a lofty boom-era,” said Prequin’s Manual
Australian dollar, moderate wages Carvalho. The number of new deals,
growth and intense retail competition and their value, both fell from the final
would help keep inflation at bay for the quarter of 2010. New deals numbered
year ahead. The Australian dollar has 623, worth $49.9bn (£30.6bn) – down
jumped by around 13 per cent in the eight per cent in number, and 26 per
last twelve months. cent in aggregate value.
 18 News
Corporate lift for Park Group
CONSUMER
▲
BY HARRY BANKS
CHRISTMAS hampers and voucher
specialists Park Group said it expects
trading to be in line with market
expectations for its year ending 31
March and Christmas 2011 orders are
up five per cent year-on-year.
Liverpool-based Park Group will
report full results on 14 June, but said
it had performed well despite the
freeze before Christmas which hit the
consumer sector.
It said corporate voucher and pre-
US investor
gives Home
Retail a boost
RETAIL
▲
BY JOHN DUNNE
HOME Retail Group saw its shares
jump yesterday after US private equi-
ty firm Madison Dearborn Capital
Partners upped its stake.
The Argos and Homebase owner
issued a profit warning last month
but was buoyed by the move from
across the Atlantic.
Tradewinds Global Investors, con-
trolled by Chicago-based Madison,
held 4.25 per cent of Home Retail’s
voting rights as of the end of March,
the retailer said. The stake was only
3.2 per cent in mid-March. The FTSE
250 company has been the subject of
takeover speculation and is seen as a
potential target for Asda owner Wal-
Mart.
Freddie George, an analyst at
Seymour Pierce, said: “It takes a leap
of faith, in our view, to invest in a
company on speculation, when Home
Retail’s profits have declined each
year over the last four years at a time
when Internet channel sales have
paid card sales performed well in its
last financial year as the number of
clients increased year-on-year, in a
tough trading environment.
Park’s corporate vouchers are used
by many firms for staff incentive
schemes, which were hit in the reces-
sion.
Meanwhile the group’s flexecash
card, a pre-paid card launched last
year and redeemable at 24 retailers
including HMV, Argos and New Look,
has over 300 corporate clients.
The retailer said: “While still a
small part of the business, demand
been very strong.”
Home Retail chief executive officer
Terry Duddy lowered the company’s
profit outlook on 10 March, warning
“difficult and volatile” conditions
were damaging sales at Argos. Home
Retail now expects to make profits
before tax of between £250m and
£255m for the year to 26 February,
down from its January forecast of
£263m and the £293m made on 2010.
But the stakebuilding by Madison is
seen as a positive move in investors’
eyes. Home Retail shares closed 1.7
per cent higher at 208.1p.
ANALYSIS l Home Retail Group
240
p
230
208.10
220 5 Apr
210
200
190
180
10 Jan 8 Feb 9 Mar 29 Mar
has been growing rapidly and its per-
formance has exceeded the board’s
expectations.”
Its online operation grew during
the year with over £100m in sales
taken via its website.
The Irish business, acquired in
October 2010, has now been success-
fully integrated, Park said in a state-
ment.
It added: “The Board expects to
report a positive financial perform-
ance in line with market expecta-
tions for the year ended 31 March
2011.”
WPP bets on eccentric
magazine moguls’ plan
MEDIA
▲
BY EUGENIO MONTESANO
VICE, the media group that includes the
famous monthly magazine of the same name,
has attracted funding from Sir Martin Sorrell’s
WPP, the leading communications agency, as
part of a multi-million dollar fundraising.
Vice has long had an anarchic reputation
in the publishing world, not least
because of bombastic state-
ments from co-founder Shane
Smith. Speaking about the
latest round of investments,
Smith said: “Vice has long
been accused of having
ambitions for total
global domination.
Today, we acknowl-
edge the truth.
“We are forming an
unholy alliance that will
ensure no other media company
will ever stand a chance against
Vice’s relentless onslaught.”
Vice was formed by Smith,
with friends Suroosh Alvi and
Gavin McInnes, in 1994 as a
small punk magazine in
Montreal, Canada, and has
since grown into a global youth
media brand. Today, the glossy
title has over 1.1m readers
across more than 30 coun-
tries and has estimated
annual sales of $8.4m. VICE CO-FOUNDER SHANE SMITH
Carlsberg rebrands in bid
to double profits by 2015
▲
FOOD & BEVERAGE
CARLSBERG, the world’s fourth-
biggest brewer, is adapting a new glob-
al slogan in hopes of doubling its
brand’s profits by 2015, the company
announced yesterday.
The new slogan – “that calls for a
Carlsberg” – replaces one of advertis-
ing’s most famous taglines: “Probably
the best beer in the world,” originally
voiced by actor Orson Welles.
CITYA.M. 6 APRIL 2011
Chief executive Jorgen Buhl
Rasmussen said that while Carlsberg’s
green logo is known around the world,
its sales do not measure up to its brand
recognition.
Carlsberg’s operating profit rose
from 9.39bn Danish kroner (£1.1bn) in
2009 to 10.25bn Danish kroner in 2010.
Carlsberg said it hopes the new
branding will help it reach its goal to
become the fastest-growing global
beer company.
NEWS | IN BRIEF
Quercus flies thanks to Larsson
Quercus, the independent publisher
behind Girl With The Dragon Tattoo,
yesterday announced an eight-fold surge
in profits to a record £7.5m. Quercus
chief executive Mark Smith is building
on the success of Stieg Larsson's
books – known as the Millennium
Trilogy. Smith, who co-founded Quercus
in 2004, is paying a first-ever dividend
of 5p and a further one-off dividend of
7p. He has also signed up Susan Watt,
the HarperCollins publishing director
who commissioned Jeremy Paxman,
Boris Johnson and Conn and Hal
Iggulden’s Dangerous Book For Boys, to
launch her own Quercus imprint, Heron
Books. The company is taking on 40
more staff.
McInerney folds seven firms
McInerney Holdings Group has put
seven of its UK units into administra-
tion, with the housebuilding group blam-
ing the continuing poor health of the
property market. The companies affect-
ed by the administration include
McInerney Group, McInerney Homes,
Alexander Developments (North East),
Lancing Homes, Gold Homes, William
Hargreaves and Bowey Homes. Several
building projects in the Midlands and
north of England were immediately put
on hold. Richard Heis, Brian Green and
Paul Dumbell of KPMG have been
appointed as administrators and are
looking at forming a number of deals to
manage the transfer and continuation of
some development sites. Heis said the
difficult economy had limited the com-
pany’s ability to function without the
support of additional finance. The seven
companies employ a total of 161 staff
members for 32 development sites.

 

 
    

  


 
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CITYA.M. 6 APRIL 2011 News 19

EnQuest could buy NEWS | IN BRIEF

Porvair four-month revenues up

up North Sea fields

Filtration and environmental technology
group Porvair yesterday announced rev-
enues for the first four months of 2011
have grown by around eight per cent on
the same period last year. In its interim

after oil tax hike

management statement the company
said profit for tax was ahead of manage-
ment’s expectations and well ahead of
the same period last year.

US long-term borrowing boosted

Higher charges placed on banks that
ENERGY assets at prices that are lower than lend overnight funds to the Federal
▲

BY MARION DAKERS they were just a few weeks ago,” he Xstrata chief Mick Davis told analysts about the firm’s plan to expand coal operations Reserve are having “an anticipated posi-
said on a conference call. tive effect” of making long-term bor-

Xstrata plots coal surge

NORTH SEA oil producer EnQuest
warned that the government’s recent
tax raid on oil profits will make some
smaller projects in the region impossi-
ble, but said it is well-placed to snap up
projects as the hike dents asset values.
EnQuest said it was “very disap-
pointed by the recent unexpected UK
Budget decision” to hike the oil profit
levy from 20 to 32 per cent, adding
that it “will render some small field
investments uneconomic”.
But the firm posted a pre-tax profit
of $169.4m (£104m), up from a pro-
forma profit of $24.9m last year, and
said that its developments still have
significant potential.
Chief executive Amjad Bseisu said
the tax increase might help the firm’s
acquisition drive: “We can acquire
“We can look at an acquisition in
the half a billion to a billion dollar
range quite easily.”
EnQuest would consider assets put
up for sale by oil majors such as BP in
the North Sea, Bseisu said, but was
▲
wary of taking on high decommis-
sioning costs at some of the more
mature fields.
EnQuest also plans to spend $300m
on drilling and exploration this year,
according to its results statement.
Pro-forma production rose 55 per
cent on last year to 21,000 barrels of
oil per day, as EnQuest ramped up
work on the North Sea assets of
Petrofac and Lundin Petroleum that
it acquired last year when it floated.
Reported revenues more than dou-
bled to $583.5m during 2010.
MINING
BY MARION DAKERS
XSTRATA could raise its coal output
by 80 per cent over the next five years
to cash in on rising demand, accord-
ing to a company presentation.
Xstrata, which has taken mining
analysts to its new Mangoola coal
mine in Australia this week, could
push its annual output to 145m met-
ric tonnes by 2016, Nomura said in a
note.
The company told analysts on the
trip that its coal resource base has
risen 80 per cent since 2005, with
most of the growth coming from the
New South Wales region of Australia.
Its expansion is set to come from
brownfield sites.
Xstrata said the surge in demand
for coal was coming from China,
Indonesia, India and Brazil.
Analysts at UBS said in a note that
the Mangoola project, which is in its
final months of process testing,
appears well-constructed with the
capacity for expansion.
rowing relatively more attractive for
banks, the Federal Deposit Insurance
Corp (FDIC) said yesterday. The FDIC
introduced the higher fees as called for
in last year’s Dodd-Frank financial
reform law. The higher charge has led
some companies to step out of the
short-term lending markets, exacerbat-
ing an already low supply of Treasury
bills used to back borrowing.
Assura trading beats forecasts
High sales in its pharmacy business have
caused Assura to surpass expected trad-
ing results for the year ending in March.
The primary healthcare and pharmacy
group, which recently acquired AH
Medical Properties, predicted revenue
from its wholly-owned pharmacies to
exceed £33m, compared to £31m in 2010.

Drax bounces after

it settles tax issues
ENERGY chase of the Drax power station integral part of the capital required
▲

BY MARION DAKERS
SHARES in Drax Group rose three
per cent yesterday after the firm
agreed a tax deal to release £180m
for the business.
Drax, which owns the Drax coal-
fired power station in Yorkshire,
has settled tax issues linked to its
from the National Grid. The firm
pre-paid interest during its listing
in 2005, and expected to get tax
relief up to 2015 before HMRC
changed the rules on tax
deductibility.
The firm then wound up the
Eurobond structure, crystallising
losses of £220m, subject to HMRC
to deliver our biomass strategy,
which in turn will provide the UK
with cost effective, reliable and
flexible renewable electricity.”
Shares in the FTSE 250-listed
company bounced 3.1 per cent
before settling 1.2 per cent higher.

ANALYSIS l Drax
420.10
FX day traders
required...
Eurobond financing and other confirmation. 430 5 Apr
p
“minor legacy tax issues”, the firm “We are delighted to have
420
said in a statement. brought these complex matters to
Around £117m of cash that was a conclusion,” said finance director 410
ring-fenced last year will now be Tony Quinlan. “We would like to 400
released onto the firm’s balance thank HMRC for their professional- 390
sheet, along with £63m remaining ism and commitment which has We are looking for experienced Foreign Exchange traders to share their
380
agreed losses that will be realised allowed an efficient resolution to knowledge and experience with others through our bespoke live trading room
over the next few years. this process. 370
platform.
The Eurobond debt structure “If we receive appropriate regula- 360
was set up in 1999 during the pur- tory support, this cash will form an 10 Jan 8 Feb 8 Mar 29 Mar
The retail FX industry is growing at a phenomenal rate and new FX traders want
to learn how to trade FX and follow professional day traders.

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HSBC downgrade Hapag-Lloyd shipping Your Requirements

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SHARES in National Grid shed 1.7 per cent yesterday
as HSBC downgraded its rating on the power utility to
“underweight” from “neutral”, on valuation grounds,
underperforming a broadly weaker utilities sector.
HSBC said in a note the networks regulation
improvements are now priced in and failure to gener-
ate Ofgem savings could dilute long-term returns,
while the benefit of the cold winter weather will only
be temporary. National Grid’s shares have risen 6.6
per cent in 2011, compared to a 1.6 per cent rise on
the FTSE 100, and are hovering near overbought terri-
tory on its relative strength index, HSBC said.
National Grid trades on a forward price to earnings
ratio of 12.4 times, roughly in line with its sector
peers.
• Experience of working in a UK financial regulatory environment
GERMANY’S TUI has said it is in talks to sell a stake in
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An official at Omani state-owned Onyx Investments
said it had reached an agreement in principle to buy a careers@tradermanagement.com
stake in world’s fifth-largest container shipper, but that
negotiations about the price were continuing.
 20 News CITYA.M. 6 APRIL 2011

CITY MOVES | WHO’S SWITCHING JOBS Edited by Harriet Dennys in association with

APCIMS
Ian Cornwall has been appointed as director of
regulation at the Association of Private Client
Investment Managers and Stockbrokers.
Cornwall, who has more than 20 years’ experi-
ence as a risk and compliance professional, four
of which were spent as head of UK regulation
for APCIMS, will work with the government to
develop regulation for the sector. He moves to
APCIMS from Bovill Limited, where he held a
consultancy position.
Nikko AM as assistant director of product man-
The Asian investment management agement in the firm’s London office,
company has appointed Violet Pacileo responsible for representing the Asia-
based portfolio management teams in
Europe. Prior to joining Nikko AM,
Pacileo was assistant portfolio manag-
er on the Japan desk at Aberdeen
Asset Management in Tokyo.
PricewaterhouseCoopers
Robert Bridson has joined PwC’s finan-
cial services tax business as a partner.
He joins from Deloitte, where he
advised financial institutions on the US
Qualified Intermediary regime and the
Foreign Account Tax Compliance Act.
Aberdeen AM
Andrew McCaffery has been appointed
as head of institutional hedge funds at
Aberdeen Asset Management, where
he will oversee more than £4bn of
assets. McCaffery joins from BlueCrest,
where he was a founding member of
the Alignment Investors division.
Cushman & Wakefield
The global property consultant has
recruited James Crisp as a partner in
its Corporate Occupier & Investor
Services EMEA team. Crisp was for-
merly a director at Capita Symonds,
where he was responsible for the firm’s
UK and European occupier services.
BNY Mellon
Bank of New York Mellon has strength-
ened its senior management with the
appointment of Jonathan Bowler, Chris
Coleman and Laure Scala to support
the company’s Derivatives360 deriva-
tive management scheme. Bowler will
serve as business manager for the
EMEA and Asia-Pacific regions,
Coleman will represent North America
and Latin America, and Scala becomes
chief administrative officer.
Renaissance
Jens Bjorheim has been appointed as
sales director for the Nordic region and
Switzerland of RAM, the investment
management business of integrated
investments firm Renaissance Group.

To appear in CITYMOVES please email your career

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updates and pictures to citymoves@cityam.com morganmckinley.com

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ANALYSIS l Resolution ANALYSIS l Domino’s Pizza UK & IRL ANALYSIS l Hammerson

303.80
300
p 5 Apr 600
p
480
p 449.90
5 Apr
290 413.00 470
280 550 5 Apr
460
270
500 450
260
250 440
450
240 430
230 400 420
10 Jan 8 Feb 9 Mar 29 Mar 10 Jan 28 Jan 28 Feb 7 Mar 29 Mar 10 Jan 8 Feb 28 Feb 7 Mar 29 Mar

RESOLUTION DOMINO’S PIZZA HAMMERSON

Citigroup rates the insurance group “buy” with an increased target price of
367p. The broker believes that M&A and mission creep fears have been
over-discounted in the market, with the risks instead lying with changing
regulation and agency costs. Citi likes Resolution’s low relative leverage and
excess capital, and hangs its investment case around the firm’s potential
value generation in restructuring UK life insurance companies.
Goldman Sachs rates the pizza chain “buy” with a target price of 586p. The
broker has lifted its forecasts after a recent trading statement, and now
expects 60 new store openings a year compared with 55 a year previously.
Goldman’s like-for-like sales growth forecast for 2011 is unchanged at 5.5
per cent. Risks to the firm include more competition and a further decline
in Irish sales, the broker adds.
Collins Stewart rates the property firm “hold” with a target price of 470p.
The broker expects the property market to be flat this year, with very little
prospect of rental growth outside central London. The broker is impressed
with Hammerson’s strategy but thinks it will be some time before the firm’s
development programme contributes to the bottom line, and has reduced
its pre-tax profit forecast by 1.5 per cent for 2011.

FTSE lags over China’s rate Low volumes see

hike and European debt fears Wall St tread water
maybe in June we’re going to see the 4.4 per cent, after its chairman said the year.

THELONDON Fed bringing its QE (quantitative eas-

ing) to an end – all of this suggests
he believed the Indian government
would approve its plan to buy Cairn THENEW YORK “Those wishing for more volume
should be careful what they wish for

REPORT
that the tide is turning a bit,” Mike
Lenhoff, chief strategist at Brewin
Dolphin, said.
“We could be entering a phase
REPORT
Energy’s India assets in the next few since a rebound in trading volume
days. may come with the return of volatili-
Meanwhile, TUI Travel rose 2.4 per ty, rather than the steady gains we
cent on news its German parent TUI have seen since last summer.”

B
RITAIN’S top share index edged where maybe the defensive (stocks) AG has found an alternate route to Minutes of the last Federal Reserve

lower yesterday as miners fell
on concerns that an interest
rate hike in China could hurt
demand for metals and banks
dropped on worries over European
debt.
The FTSE 100 closed down 9.92
points, or 0.2 per cent, at 6,007.06,
having rallied 7.4 per cent off lows hit
in March following the earthquake in
Japan.
Miners were among the biggest lag-
gards after China’s central bank
increased interest rates for the fourth
time since October.
Banks fell after credit ratings
agency Moody’s cut Portugal’s sover-
eign debt by one notch, saying it
believed an incoming government
would need to seek financing support
from the European Union as a matter
of urgency.
Barclays and Lloyds Banking Group
shed 0.5 per cent and 1.2 per cent,
respectively.
Concerns were mounting as to how
cyclical assets were going to fare
against the backdrop of global mone-
tary tightening.
“Interest rates are rising in the
developing world, we are going to get
an ECB (rate) increase this week, and
begin to show a bit of leadership.”
Observers also said an elevated oil
price created conditions for weakness
in equities, with Brent crude topping
$122 a barrel yesterday on unrest in
oil exporting countries in the Middle
East and Africa.
“At some point these prices are
going to be impacting costs and mar-
gins, and obviously if you’re increas-
ing costs, you’re going to have to
increase prices, and if you can’t...
then you’re going to shrink your mar-
gins,” Michael Hewson, analyst at
CMC Markets, said.
“While (the FTSE 100) is below
6,050 (its highs in March), I think
we’ll come lower, and we’ll test the
5,900 levels that we saw at the end of
last week.’
Among individual stocks, heavy-
weight Vodafone dropped 1.5 per
cent, with traders citing a downgrade
to “reduce” by Evolution Securities.
The share price falls also came as
Nomura cut its estimates on the
mobile communication firm, citing
impending changes to Indian tele-
com policy and a tough Spanish out-
look.
Vedanta Resources grabbed the top
spot on the blue-chip leader board, up
exit its container shipping business
Hapag-Lloyd after putting on ice
plans for a flotation.
Insurance consolidator Resolution
climbed 3.2 per cent, boosted as
Citigroup raised its target price.
Meanwhile European shares edged
up to their highest close in nearly
four weeks yesterday, with energy
firms gaining after further unrest in
the Middle East pushed crude prices
to a two-and-a-half year high.
The FTSEurofirst 300 index of top
European shares rose 0.2 per cent to
1,143.94 points, the highest close
since 9 March. Volumes were 94 per-
cent of the index’s 90-day average.
Brent crude topped $122, and hit its
highest in two and a half years,
ANALYSIS l FTSE
6,100 6,007.06
5 Apr
6,000
5,900
5,800
5,700
5,600
5,500
10 Jan 28 Jan 17 Feb 9 Mar 29 Mar
T
HE S&P 500 failed to break a key
technical resistance level for a
second day yesterday as low
trading volume raised further
questions about the market’s
strength.
The broader market index closed
slightly below 1,333, a closely
watched level as it represents double
the low reached in March 2009.
Trading volume was relatively low
with just 7.03bn shares traded on the
New York Stock Exchange, NYSE
Amex and Nasdaq, compared with
last year’s estimated daily average of
8.47bn.
But a rebalancing of the Nasdaq
100, which takes effect on 2 May,
spurred traders to buy companies
with increased weightings, including
Microsoft, Intel and Cisco Systems, all
of which rose around 1 per cent.
“The (low) volume is a sign that
there is little conviction from sellers
in this market,” said Jeff Kleintop,
chief market strategist for LPL
Financial in Boston.
The S&P has slowly built gains
since mid-March in mostly quiet ses-
sions. Last week was the thinnest
week of trading so far in 2011 and
Monday was the lowest-volume day of
meeting showed some Fed officials
believed the US central bank should
tighten conditions before year-end.
Stock market reaction was muted.
Chip stocks were supported after
Texas Instruments late Monday
offered to buy National
Semiconductor in a deal worth
$6.5bn, a premium of 78 per cent. The
PHLX semiconductor index rose 2.3
per cent.
The Dow Jones industrial average
slipped 6.13 points, or 0.05 per cent,
to end at 12,393.90. The Standard &
Poor’s 500 Index inched down just
0.24 of a point, or 0.02 per cent, to
1,332.63. The Nasdaq Composite
Index rose 2.00 points, or 0.07 per
cent, to 2,791.19.
Apple’s weighting was slashed,
though it remains the biggest compo-
nent of the Nasdaq 100. The stock was
down 0.7 per cent at $338.89 after ear-
lier falling as much as 1.5 per cent.
The announcement of a merger
with Texas Instruments drove
National Semi shares up 71 per cent
to $24.06. Texas Instruments added
1.7 per cent to $34.69. The deal is the
latest in a string of multibillion-dollar
deals that have helped pushed stocks
higher in recent weeks.
 Business Features | Insight
Imagining tomorrow: possibilities,
probabilities and potential in 2025
What happens when you get the editor of Wired, an Oxford
academic and a futurologist together in a room? Turns out,
they predict the future. Leo Von Bulow-Quirk finds out
what they think 2025 will look like...
1
TRANSFORMATIVE TECHNOLOGY
There’s been a lot of fuss about digital form-
ing technology – that is physically printing
anything from plates and cups to medical
equipment and cars. But it is worth the fuss
since it will radically impact on the world
economy when it comes into fruition. The
technology would give us the capability to
manufacture just one product at a time,
which would wipe out the need for cheap
mass labour in emerging markets. This
could leave these economies struggling to
find work for their burgeoning populations.
2
PRIVACY IS DEAD
David Rowan estimates that up to 2003,
human civilisation generated five
hexabytes of publicly available data. We
now generate this much information every
two days. Though some worry that this
could lead to Big Brother-style abuse of pri-
vate information, others argue that this cre-
ates new opportunities to utilise valuable
data for the benefit of mankind.
3
INSTITUTIONS FACE IRRELEVANCE
The internet has transformed
industries already: online trad-
ing platforms are diminish-
ing the role of the
stockbroker and music
file-sharing is reducing
the role of the record
label. This could hap-
pen to banks and gov-
ernment services in
the future. Businesses
will have to constantly
re-think how they can
continue to add value
and justify their exis-
tence as industries change.
As data becomes more and
more readily available, corpo-
rations will become increasingly
transparent and accountable for their
actions. As a result, reputation will become
an ever more precious commodity. Some
argue that
these devel-
opments will
also lead to power
slipping away from state insti-
tutions, and cite the unrest in
the Arab world as an example of
the disruptive potential of social
media. Others like Evgeny
Morozov, author of The Net
Delusion, argues that the internet
provides as much opportunity for state
oppression as emancipation.
4
THE DEMOGRAPHIC DEFICIT
The world’s nations face a shift from pre-
dominantly young societies to predomi-
nantly old ones. This will be driven by a fall
in fertility rates as well as people living
longer. And this trend isn’t just hap-
pening in the West, popula-
tions are aging across the
globe. Take Pakistan:
half its population is
under 15 years old
at the moment,
but by the middle
of the century
this proportion
will fall to less
than a fifth. This
tells us a lot
about what the
world will look
like in the future
because through
the twentieth century
the West has depended
on immigration to provide
the necessary labour for its
industries as its own population growth
fell. As developing nations in Latin
Leo Von Bulow-Quirk works for Chartwell Partners,
the specialist speaker bureau, which organised this
meeting. www.chartwellpartners.co.uk
Hopefully the future America and Asia become richer and
economy will only older, their younger workers are less like-
encounter these hous- ly to leave. This tightening of immigra-
ing bubbles tion flows challenges growth prospects
in Europe and the US.
5
CAPITALISM MAY CHANGE
With most countries in the West –
although not the UK – facing a severe
decrease in population in the next 20
years, capitalism may struggle to sustain
“normal” growth rates. We have become
accustom to the idea that each genera-
tion will generate more wealth than the
generation before them. This could be
about to change.
21
6 WHAT DOES THIS
MEAN FOR THE UK?
The good news is that Britain, with
its strong universities and relative-
ly open economy, may be given
an advantage by a global market-
place that rewards innovation
and entrepreneurship. But as an
ageing population leads to
increased competition for skilled
workers, Britain will have to devel-
op immigration policies that
attract world-class talent.
7
LOOSENING TIES
The coming decades may
continue to loosen the
ties between national
governments and the
new “digital natives”
generation. They may be
more inclined to estab-
lish loyalties among
each other, horizon-
ally, and globally.
In Britain, this
could force a re-
think of the cur-
rent model of representative politics. We
could even see the relationship between
London and the rest of the United
Kingdom come under stress. London –
economically vibrant with a global popu-
lation – could grow in identity and influ-
ence and become geopolitical actor on
the world stage.
CV | PARTICIPANTS
David Rowan is editor of Wired UK. He has
edited The Guardian's websites, written tech
and trend-watching columns for The Times,
made TV films for Channel 4 News, and pro-
duced features for The Telegraph Magazine,
Sunday Times Magazine, The Observer and
elsewhere. He trained at The Times, edited
The Guardian's op-ed, education, analysis and
Saturday features sections. Most recently he
edited The Jewish Chronicle.
Professor Sarah Harper is professor of
gerontology at Oxford University, the director
of the Oxford Institute of Population Ageing
and the director of the Clore Programme on
Population-Environment Change. She has a
masters from Cambridge and a DPhil from
Oxford. Her research focuses on globalization
and ageing.
Dr James Bellini is a futurologist and author.
James spent more than twenty-five years as a
TV broadcaster, futures analyst and writer
with a focus on social, economic and techno-
logical trends. After an academic career James
joined the US-headquartered futurology think
tank the Hudson Institute. He then moved to
the BBC to present The Money Programme,
Newsnight and Panorama. He has a Masters in
law and history from Cambridge and a PhD
from the London School of Economics.
 22
Wealth Management Foreign Exchange
AUSSIE: RATE
RISE NOT IN
SIGHT OF RBA
BORIS SCHLOSSBERG
O
DIRECTOR OF CURRENCY RESEARCH, GFT
VER the past week the Australian dollar has been
setting fresh post-float highs nearly every day,
reaching a peak of Au$1.0416 on Sunday. The cur-
rency’s recent rise has been driven by stronger
commodity prices, improved risk appetite and the return
of the carry trade. At 4.75 per cent, the Aussie remains
the best yielding currency in the G20 by a very wide mar-
gin, while the recent rally in dollar-yen has revived an
interest in the classic carry trade pair of Australian dol-
lar-yen that has rallied a whopping 17 per cent since the
middle of March.
Yet despite the Aussie’s recent invincibility, the rally in
the pair may be due for a pause, as traders’ reconsider
the prospect of any additional rate hikes from the
Reserve Bank Australia (RBA). Last night, the
Australian central bank issued its monthly monetary
statement and the tone of the communique was decid-
edly dovish. The central bankers in Sydney stressed: “In
the household sector, there continues to be caution in
spending and borrowing.” Then adding: “Inflation is con-
sistent with the medium-term objective of monetary
policy, having declined significantly from its peak in
2008.”
The RBA’s assumption that inflation will remain with-
in its target band of 2-3 per cent indicates that from
now on the Australian central bank sees no need to hike
rates any further. Clearly the policymakers in Sydney
feel that the rising value of the Australian dollar is act-
ing as a powerful offset to any inflationary pressures in
the system.
Furthermore, yesterday’s surprisingly weak trade bal-
ance figures registered their first deficit in eleven
months. This could signal that the rising currency is
starting to create competitive pressures for the
Australian export sector. The RBA appears keen to com-
municate that monetary policy will remain on hold for
the foreseeable future.
The currency markets however continue to favour the
Aussie, as sentiment towards the unit remains inordi-
nately positive. Still, as the reality of RBA intentions
begins to sink in, the pair may begin drifting towards
the Au$1.0200 level. Tonight’s employment report could
be a catalyst for further weakness if it misses the
expectations of a 21 thousand gain in jobs.
WAITING BY THE PHONE.
LOSING SLEEP.
CANCELLING DATES.
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Chinese rate
hikes will build
pressure on its
Pacific partners
The bank’s decision will have a knock-on effect
on the Australian dollar, writes Craig Drake
T
ODAY the interest rate hike
announced by the Chinese central
bank will kick in. This follows yester-
day’s announcement by the People’s
Bank of China (PBoC) that the benchmark
one-year lending rate will increase to 6.31
per cent from 6.06 per cent. At the same
time, the one-year deposit rate will rise to
3.25 per cent from 3 per cent.
Fearful of the risk of asset bubbles in its
rapidly expanding economy, these moves
are part of attempts by China to bring infla-
tionary pressures under control, and are
the fourth time since the financial crisis hit
in 2008 that China has raised rates. Since
the start of the year, the PBoC has also
raised the reserve requirement level three
times, with the required rate of return cur-
rently sitting at 20 per cent.
The timing of today’s rate increase may
be a pre-emptive strike agaist economic
announcements which are due to be
released soon and are set to point to
increased inflation. These include the
March consumer price index (CPI) figures,
due on 15 April, that will probably come in
at about 5.5 per cent.
According to Wei Yao, an economist from
Societe Generale Cross Asset Research: “We
expect limited impacts from this hike on
the real economy. The repeated required
reserve hikes have effectively tightened liq-
uidity conditions and pushed up borrow-
ing costs. The commercial banks have
CITYA.M. 6 APRIL 2011
|
raised their lending rates much more than
the PBoC has raised the benchmark interest
rates.”
Negative real interest rates have lasted
more than a year and Chinese Premier Wen
Jiabo has described inflation in China as “a
tiger that once set free will be very difficult
to put back in its cage.” Nick Beecroft, sen-
ior markets consultant at Saxo Bank echoes
Jiabo’s concerns about the risk of inflation:
“The rise in Chinese interest rates is the lat-
est tentative step along the tightrope which
China is walking between the need to avoid
social unrest driven by higher prices and,
on the other hand, to dodge a dramatic eco-
nomic slowdown or property crash, as a
result of a rapid monetary tightening. I
expect more rate rises and also an accelerat-
ed contribution from exchange rate appre-
ciation in the battle against inflation,
which seems set to break the 5 per cent bar-
rier over the next few months.” tion due to high competition in capital
good markets”
AN ANTICIPATED RISE Doug Turnbull, fund manager of the
According to Guido Stiel, co-manager of the Neptune Greater China Income fund says
Allianz RCM BRIC Stars fund, the that food price inflation is a significant fac-
announcement of today’s rate rise was tor in the Chinese economy: “Consensus
largely anticipated: “It was the first of two seems to be that with the rate hike, the
increases of 25 base points expected this peak of the CPI, which had previously been
year and we expect the second one to come expected in July, has been brought nearer
in July, around the same time as we expect and could be at its peak now. But we think
to see a tailing off of inflation through base that it may still be a way off. Inflation could
effect easing momentum. With the excep- rise up for the next quarter, into the second
tion of food price rises, there is low infla- half of the year, driven by food inflation.
SPREAD BETS | CFDs | FOREX
free phone 0800 358 0864
gftuk.com
GFT Global Markets UK Ltd. is authorised
and regulated by the Financial Services
Authority. CD03UK.142.020411.
CITYA.M. 6 APRIL 2011 23

China is going through

rapid growth
Food prices in China have been rising by
around 11 per cent per annum while non- THE
Picture: GETTY food prices have risen by 2.3 per cent. With
food prices making up 30 per cent of the TIPSTER
CPI figure their continued rise will have a
significant effect. The point at which peo- THE FALLING
ple will get bullish and buy Chinese equi-
ties is when the policy ceases to be YEN SUFFERS
tightening. We are approaching that now.”

AUSTRALIA THE BEST CURRENCY PROXY

SUPPLY WOE
Due to its tightly controlled nature, the rate

hikes will not have a direct effect on the
Chinese currency. However, the announce-
ment will have a big effect on countries
with Chinese exposure. These invariably
see a selling-off of currency in the after-
math of a Chinese rate hike, as there is a
perception that higher interest rates hinder
China’s growth and with it their demand
for imported commodities. With the major-
ity of their exports being to China, the
Australian dollar is especially sensitive to
PBoC rate hikes.
With the Australian economy being put
under pressure in the aftermath of natural
disasters earlier in the year, at the same
time as being influenced by China address-
ing its inflation fears, the Autralian dollar-
dollar pair could well present a mid-long
term opportunity for investors to take
advantage of China’s rate hikes over the
course of the year.
ANALYSIS l China’s Negative Interest Rate
5 Real Deposit Rate, %
4
3 have fully priced in a 25 basis point rate hike,
2 so any disappointment or dovish talk will lead
1
0 $1.4173.
-1
-2
-3
-4
-5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: SG Cross Asset Research
T
HE Japanese yen remains under signifi-
cant pressure, which is not being helped
by news of supply chain disruption at
Toyota’s US facilities. What should have
been a valuable source of funds ready to be
repatriated is being taken out of the equation.
The concern now has to be that the situation
is going to get worse before it improves. After
the early resilience the currency saw in the
aftermath of the earthquake, there's now been
a wholesale reversion. IG Index offers ster-
ling-yen at ¥136.91-¥136.94.
With the ECB widely expected to raise
interest rates on Thursday, the euro has
enjoyed something of a rally even against the
Swiss franc. However, it appears to have run
into some technical resistance around the
200 day moving average and could well slip
back. CMC Markets offers euro-Swiss franc
at SFr1.30810-SFr1.3084.
The fear is that the rate rise delivered by
the ECB on Thursday may look too premature
given the ongoing funding stress in the
European periphery. Market participants are
likely to be given a stark reminder that a
“one-size-fits-all” monetary policy will ham-
per European recovery. Market participants
to euro declines across the board. On euro-
dollar Alpari UK offers a spread of $1.4171-
Yesterday a surprise jump in PMI service
data for the UK caused a jump in sterling,
which has recently lost quite a bit of ground
against the euro. The move higher by sterling-
euro might be a reversal signal that the
downward trend is over and we could test
higher ground. Capital Spreads quotes
€1.1460-€1.1463 for sterling-euro.
Philip Salter

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
JOHN KICKLIGHTER ILYA SPIVAK JOEL KRUGER

My pick: Short euro-dollar, short Australian dollar-dollar, long euro My pick: Short Australian dollar-dollar at $1.0349 My pick: Buy dollar-Canadian dollar at Ca$0.9710
Expertise: Fundamental and Technical Analysis with Risk Management Expertise: Global Macro Expertise: Technical Analysis
Average time frame of trades: 1 day to 1 week Average time frame of trades: 1 week to 6 months Average time frame of trades: 1 week to 6 weeks

Neither the short euro-dollar nor the short sterling-dollar setups I laid
out last week were triggered, as sentiment and rate expectations held
up. That said, my euro-yen long provided a quick first target of 175 pips
and I am considering 120 as the second objective. Going forward, I still
like the potential in a euro-dollar reversal below 140 given the over-
inflated rate expectations. Australian dollar-dollar is particularly over-
sold, but I’ll wait for a move below $1.02.
I have entered short Australian dollar-dollar at $1.0349 after the pair pro-
duced a bearish Dark Cloud Cover candlestick pattern below resistance at the
top of a rising channel that has guided prices higher since October. Negative
RSI divergence reinforces the case for a downside scenario. Fundamentally, a
flat RBA outlook through the year-end promises to weigh on the Aussie as
other central banks begin tightening, narrowing yield spreads. My initial tar-
get is $1.0233, with a stop-loss to be activated on a daily close above $1.0416.
Any recovery in this market have been short-lived, with the price dropping
below Ca$0.9700 to fresh multi-month lows in the Ca$0.9600s. However,
we see risks for additional declines from here as limited, with the greater
risk for the formation of a longer-term higher low above Ca$0.9055
ahead of the next major upside extension beyond Ca$0.9975 and back
above parity. Ultimately, only a daily close below Ca$0.9500 would delay.
Buy at Ca$0.9710 for a Ca$.0200 objective, stop at Ca$0.9445.
 24 Wealth Management | Foreign Exchange
UNLEASH THE
MATRIX TO
GET ACTION
TOM HOUGAARD
CONSULTING ANALYST, INTERTRADER
D
o you remember the film Trading Places with
Eddie Murphy? The key scene takes place in
the commodities trading pit for orange juice
in the World Trade Centre. Two traders
observe that Randolph and Mortimer, the two old-
timers running the show, are buying every orange
juice contract in site. Then those two observers
rush into the pit to be part of the action.
I didn't understand the significance of this
“action” – the volume and activity in a trade –
until my friend and trading partner Dr David Paul
taught me the Relative Strength Matrix. He
explained that because many traders trade just
one thing at a time you could be losing out on
“action” in other asset classes, something that
short-term traders favour.
For example, if you only trade euro-dollar, you
may well miss out on better opportunities in other
currency pairs. David taught me to go through
each currency pair and cross pair within the “four
majors” and ascertain where the strengths and
the weakness were.
The explanation below is not a strategy, but an
analytical framework to ascertain where the best
move of the day is likely to be.
Put a four hour chart on the screen with a 60
period moving average. Go through each of the 10
pairs – euro-dollar, sterling-dollar, dollar-Swiss
franc, dollar-yen and their six cross pairs – and
make a note of which currency is the strongest
and which one is the weakest. After looking at all
ten pairs, you now have a Relative Strength
Matrix of the ten currency pairs.
Here’s an example. On Friday morning the euro
was stronger than all the four main currencies,
while the yen was the weakest against them. So
naturally I was looking for opportunities to buy
euro-yen all day. The non-farm payroll numbers
made it a difficult trading day, but nevertheless in
my live trading room I raked in 30-40 points in
euro-yen alone.
It is a simple analytical framework and it only
takes 15 minutes to do in the morning. Happy
trading.
The views and comments in this article are not
the views of InterTrader.com. The provision of
this information should not be construed in any
circumstances as a recommendation or solicita-
tion to buy or sell any security or financial instru-
ment.
CITYA.M. 6 APRIL 2011
Rate rise in euro would
expose weak periphery
A hike might suit
mighty Germany, but
will put pressure on
the frail economies
within the Eurozone,
writes Philip Salter
M
ARKETS are expecting a quarter
point rise from 1 to 1.25 per cent
when the European Central
Bank (ECB) meets tomorrow.
However, even if Jean-Claude Trichet, pres-
ident of the ECB, announces the quarter
point rise, the euro could still come under
pressure, as attention focuses on the
impact of higher interest rates upon
Europe’s beleaguered peripheral nations.
Regardless of what happens, it’s bad
news for euro bulls. If the ECB doesn’t
raise rates then the euro is bound to weak-
en on the back of the surprise. Richard
Wiltshire of ETX Capital firmly believes
that a quarter point rise is already priced
in, while Richard Nehme of International
Foreign Exchange believes that “Trichet’s
comment of “strong vigilance” has gener-
ally been accompanied by tighter mone-
tary policy in the past.” With German
inflation at 2.2 per cent the ECB has been
coming under pressure from the conti- Jean Claude-Trichet is under pressure from Germany to raise rates Picture: REUTERS
nent’s powerhouse to act. In the UK we
are becoming accustomed to inflation sig- probe the upside could see the euro take it. In contrast, the heart of the union
nificantly above these levels, but in strengthen initially, but things should is looking comparatively healthy, but the
Germany where the economy is in recov- drift back to current levels, says Wiltshire. German public is increasingly unwilling
ery mode and unemployment is falling, Angus Campbell of London Capital Group to shoulder the burden of keeping the
the memory of hyperinflation still bears a thinks “it could be a classic case of buy Euro-leviathan alive – this includes shoul-
scar. the rumour, sell the fact, as the euro has dering inflation. Unless the periphery
Lorenzo Bini Smaghi, member of the strengthened so much recently. Once the gets to grips with debt, amputation is an
ECB’s executive board, Axel Weber, presi- fully expected rate hike is announced we option.
dent of the German Bundesbank, and might see a bit of weakness.” A currency that will go down no matter
Trichet have been dropping hints that the The ECB is stuck between a rock and a the decision of the central bank is overval-
ECB is prepared to raise rates. As such, a hard place. Under normal conditions, a ued. Hewson agrees: “The euro is overval-
key component of tomorrow’s rate hike hike in the base rate results in a strength- ued and will weaken especially if they
will be “how hawkish or otherwise ened currency, as higher yields make that hike rates, as it will make a default sce-
Trichet is in his post meeting press confer- economy attractive to investors. However, nario much more likely in the periphery,
ence,” says Michael Hewson of CMC these are far from normal conditions. The and also bring Spain into focus.” Low
Markets. The question for Hewson and extremities of the monetary union are interest rates stoked the asset bubbles
other traders is: “Is this a one-off, or will diseased by debt after years of fiscal that burst on the periphery of Europe
he continue to peddle the strong vigilance profligacy. As yet, politicians have lacked back in 2008. Now raising rates will put
tone of last press conference?” A hike, the gumption to impose the right medi- their economies and the future of the
hawkish comments, or a market keen to cine, while citizens have been too timid to monetary union itself to the test.
CITYA.M. 6 APRIL 2011 Wealth Management | Markets 25

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 Lifestyle
26 CITYA.M. 6 APRIL 2011

| Motors WORDS BY
RYAN BORROFF

Sensible doesn’t mean not fun

The Leaf is a smart
choice for the green
driver, but virtue
doesn’t come cheap

“I ’M caning it on eco,” exclaims my

excited co-driver, immediately
proving that he may not be an
ideal customer of Nissan’s new
electric Leaf car. That said, in the pursuit
of thorough journalistic investigation we
were trying to see how much we can
deplete the range by hammering the car,
rather than driving it normally.
Sensible driving may yield as much as
109 miles on a full charge, according to
Nissan, but we manage to half that by
behaving like children. But the Nissan Leaf
is surprisingly good fun. Out in the coun-
tryside somewhere near Milton Keynes
may not be be the most exotic of locations
for a drive but the car surprised us in a
number of ways. On country A-roads, the
Leaf felt surprisingly similar to a conven-
tional car. It made quick progress albeit in
near silence – there was a satisfying
whirring noise under acceleration and
some wind and tyre noise – but the overall
effect was that driving the car at speed felt
like a refined driving experience in a far
more premium vehicle costing twice as
much. The Leaf also proved quite nimble
and handled pretty well too thanks to its
low centre of gravity. Though the steering mise in buying this car, unlike some of its The Leaf is steep, though it is well equipped. Nissan If you’re a one car family it may not be
was a little light and the brakes felt a little EV rivals. attractively and eggheads claim the car can save you £140 for you.
vague to me, the car felt stable and com- According to Nissan, charging can take efficiently packaged, on fuel each month if you’re doing 12,000 But as a second car or a primary City
fortable. as little as 10 seconds in the sense that you inside and out. miles a year. But you’ll need to do some commuter it’s an intriguing option. And
The exterior is a little unusual thanks to plug it in and then go and do something clever maths to work out whether the run- you do get to watch trees grow on your
its frog-like design. But those headlamps less boring instead, a far more agreeable ning costs will leave more money in your dashboard in the knowledge that you’re
channel air over the door mirrors to experience than the misery that is conven- pocket than running a conventional car. going to get to work and back for a quid.
increase efficiency and the blue logo and tional refuelling. That said, you’ll need
badging looks very cool in the metal.
Inside the car is comfortable, light and
somewhere to charge it. On-street parkers
and apartment dwellers may struggle to
THE FACTS:
spacious. You’re immediately met by an find a satisfactory solution that isn’t run-
NISSAN LEAF
unconventional dashboard that includes a ning an extension lead out through the
brightly coloured flat screen instrument letter box. But those with your own drive PRICE: £23,350
cluster, a gearshift selector that is cool to will have a much easier time of it and 0-62MPH: 11.9 secs
the fingers and operates similarly to a Nissan can help advise you on at-home
computer mouse and a cool blue centre installation points. At home it’ll need TOP SPEED: 90mph
console which seems to have more in com- charging overnight or 45 mins on a public CO2 G/KM: 0g/km
mon with the displays on high-end smart quick charger (which will give you an 80 MPG COMBINED: n/a
phones than the usual pixel-challenged per cent charge).
displays in conventional cars. So what’s not to like? Well, surprisingly, THE VERDICT:
There’s room for five adults plus there’s not much. The key issue is that the Leaf’s DESIGN hhhhi
a spacious boot and the rear seats fold so list price is not particularly cheap. For a PERFORMANCE hhhhi
you can transport stuff from Ikea should car that is equivalent to a VW Golf in size, PRACTICALITY hhhhi
you want to. Which means in terms of day- £23,350 (with the £5k government grant) VALUE FOR MONEY hhhii
to-day practicality there’s little compro- or £399 a month on contract, may seem

CAR TALK BY RYAN BORROFF

KIA’S ELECTRIC CROSSOVER
The Seoul Motor Show is underway and Kia has shown this unusual
looking all-electric crossover utility vehicle (CUV) concept car called
Naimo. The car – which will form part of Kia's EV test fleet – has no
middle B-pillars and has rear-hinged rear doors and a three-way split
opening boot-lid. With a top speed of 93 mph and a range of 124 miles
the car can be recharged to 80 percent capacity in 25 minutes.
AN AUDI BICYCLE
OK so we don't usually focus on bicycles in this column but we're
not averse to them either. Audi has teamed up with Renovo
Hardwood Bicycles of Oregon, USA to create this particularly fetch-
ing bike called Duo. Made of hardwood no less, the frame weighs
only 25 per cent as much as aluminium and is great at absorbing
shock and vibrations – it is also recyclable and biodegradable.
STASIS CHALLENGE EXTREME EDITION COMES TO THE UK
American tuner STaSIS Engineering is bringing its 710 bhp R8 V10
Challenge Extreme Edition package to the UK. For those people who
feel the regular R8 V10 just isn't fast enough, STaSIS will bring
some pretty sharp powertrain, suspension and braking upgrades to
your regular 525bhp R8 V10. The result is a 710bhp R8 capable 0-
60mph in 3.1 seconds. Just bring them your R8 – V10 and £45k.
CITYA.M. 6 APRIL 2011 Lifestyle | TV& Games 27

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
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6.55pm Party
Election Broadcast
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Built: BBC News
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Nat ional Lottery Draws 10.45pm
Would I Lie to You? 11.15pm FILM
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8pm Lambing Live:
Kate Humble learns
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SATELLITE & CABLE

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

QUICK CROSSWORD
   

SUDOKU KAKURO
29 3 7 9 23 16 
6 9
30 28 29  
45
Place the numbers from 1 to 9 in each empty cell so that each
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 15 35
11
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 16 12 11    
above or to the left of it. 11 27
You can only use the digits 1-9 23 13 
  and you must not use the
10
11 9   
same digit twice in a block. 14 34 12 17 26
  The same digit may occur 16 39

    more than once in a row or

column, but it must be in a
9
21 8
7 3
  
15 11
   separate block.
17 14 
45
    22 24
 

   ACROSS DOWN
1 Oil reservoir in 1 Tattered (6)
   
  WORDWHEEL C I
an engine (4)
3 Knit hose covering
the body from the
2 Be overcome by a
sudden fear (5)
3 Nervous twitch (3)
Using only the letters in the Wordwheel, you have waist to the feet (6) 4 US state, capital
  ten minutes to find as many words as possible,
H O 6 Compound capable of Boise (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters T turning litmus red (4)
7 River which flows
5 Popular taste at a
given time (5)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
T E through Bristol (4)
8 Sign of the zodiac (6)
10 Gone by (3)
11 Rigid piece of metal (3)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
R E 9 Sheet of slate, for 12 Strong-scented
writing with chalk (10) perennial herb (3)
QUICK CROSSWORD 9 3 6 9 8 5 9 14 Go against, as of 13 Solution or cure (6)
S R B E W I T C H
8 2 5 6 9 4 7 8 SUDOKU          rules and laws (10) 14 Move on hands
T H E T A N H
5 1 3 2 5 2 3
         17 Disappear from view (6) and knees (5)
6 4 8 7 9 1 2 3
A G S O D S L A W          19 Headlong plunge 15 Delicious (5)
T R A D E T S 1 4 7 2 1 8
         into water (4) 16 Hard drink originating
U L D E L E T E 7 3 2 1 3 8 4 9
20 Equipment for
WORDWHEEL
S P I T Y P A R T          in Russia (5)
8 6 3 1 6 7
E A R N E D N O
9 8 1 2 4 6 3 1          a horse (4) 18 Owns (3)
S U R O T O R
D E F A C T O R I
9 3 7 7 9 8 5 The nine-letter word was          21 Forever (6)
T N S A U C E 3 7 4 6 9 8 7 2          22 Confederate,
T A C T I C S M S 1 5 2 6 1 9 4
DECOMPOSE         
accomplice (4)
 Sport
28 CITYA.M. 6 APRIL 2011

Results
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eral men in with a strong shout.
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Pfib%%%%%%%%%%%%%%%%%%%%%%%%(  ( :iXnc\pKfne%%%%%%%%%%%'  ( SAM TORRANCE Starting with the best, you’d have players a have a knack of gearing eagle, birdie in the third round when
:CP;<J;8C<98EBGI<D@<IC<8>L< to pick Phil Mickelson as favourite themselves up for the Majors, and Westwood was five clear, and finished
JkAf_ejke\%%%%%%%%%%'  ' IXe^\ij%%%%%%%%%%%%%%%%%%%%%%(  ) FELL in love with the Masters at after last week’s incredible perform- this is one course that suits him more with 67 and then another 67. You

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I the age of eight, when I first set
eyes on that magnificent Augusta
course on the television, and it’s
every bit as good as it looks on TV.
It’s also full of vivid memories. My
:_\cj\XmDXeLk[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% favourite is probably eagling the sec-
:cp[\j[Xc\9XebJZfkk`j_Gi\d`\iC\X^l\ ond hole twice in my first Masters. I
:\ck`Zm?`Y\ie`Xe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
Dfk_\in\ccm;le[\\Lk[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% made a six in the first round and a
JkD`ii\em8Y\i[\\e%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% seven in the second and then eagled
it the last two days.
SPORTS EDITOR FRANK DALLERES But I’ll also always remember
email sport@cityam.com going there for the first time, driving
ance to win the Houston Open.
Probably 60 or 70 per cent of play-
ers would hate to win the week before
a Major, but he did the same in 2006,
by 13 shots, and then won the Masters
the following week. He’ll be revelling
in the situation at the moment.
Mickelson knows his way around
Augusta, has only once been out of
the top 10 in his last 12 starts there,
and has won it three times. I wasn’t
sure about him a week ago but great
than any other does.
It also suits Tiger Woods. His form
has been a little better in the last
month, although he is now hitting
the odd good shot rather than the
odd bad one. Yet at the odds on offer
he is huge value – he didn’t play great
last year but finished fourth.
Lee Westwood’s score of 275 last
year would have been good enough to
win 17 of the last 20 Masters, but
Mickelson went mad, going eagle,
could almost say the course owes Lee
one. He knows his way around the
place, the only danger is he is not as
masterful with the sand wedge
around the green as Mickelson. Tee to
green he’s as good as anyone and he’s
a very solid putter, he just needs to
hole a couple of chips and it’ll be
great.
Luke Donald is in the form of his
life. Generally it’s a long hitter’s
course but short hitters like Mark
CITYA.M. 6 APRIL 2011
O’Meara and Zach Johnson have won,
and he’s certainly longer than those
two.
Justin Rose’s form is fantastic, he
played great last week and has been
in contention at the Masters before.
He’s played a few times now and you
need that experience before you can
win it.
Paul Casey’s form hasn’t been fan-
tastic but he’s got a huge game, is an
excellent chipper and putter, and I’d
put him in the reckoning. Rory
McIlroy too, just because of his game,
and Ian Poulter, who led after 36
holes last year and whose supreme
confidence and putting puts him in
with a shout. And of course Graeme
McDowell, the US Open champion.
Of the other Americans, I like Nick
Watney and Dustin Johnson. Bubba
Watson has the length, but a lot of
holes at Augusta are tree-lined, so he
won’t be able to hit his big hooks or
slices, and that could be a drawback.
As an outsider I quite like Gary
Woodland, a rookie from the
Nationwide Tour who won two weeks
ago and has as good a swing as I’ve
seen in a long, long time.
29
SPORT | IN BRIEF
Poulter takes aim Ireland fury at World Cup snub
CRICKET: Ireland chiefs are considering
at wounded Tiger
legal action over their exclusion from the
2015 World Cup. World governing body
the ICC has trimmed the number of
teams to 10, leaving no room for the
Irish, who beat England at this year’s
tournament. Cricket Ireland boss
Warren Deutrom said: “We will continue
champion Graeme McDowell and to fight this and we don’t believe this is
▲
GOLF
BY JAMES GOLDMAN Robert Allenby, as “playing like an a dead issue yet.”
ordinary golfer” and now Poulter has
ENGLAND’S Ian Poulter believes added his controversial view to the Sangakkara to relinquish reins
Tiger Woods’ hopes of securing a Tiger debate. CRICKET: Kumar Sangakkara has quit
first Major title since 2008 won’t “I don’t think he’ll finish in as captain of Sri Lanka’s one-day and
come to fruition at Augusta this the top five,” said Poulter. “I Twenty20 sides, three days after the
week. think at the minute there’s a defeat by India in the World Cup final.
Last year Woods ended a four- couple of inconsistent shots. The 33-year-old has offered to continue
month break from the game fol- The shots he was hitting at as Test skipper ahead of this summer’s
lowing the storm surrounding Doral (Woods came 10th at the tour of England.
his orivate life with a WGC-Cadillac Championship)
fourth place finish at were very inconsistent. Sanderson’s fear for legacy
Augusta, but he “You can’t afford to OLYMPICS: Former gold medallist Tessa
failed to build on hit shots like that round Sanderson fears for an athletics legacy
that performance, this golf course and get away at the Olympic Stadium, despite the
is without a vic- with it. You have to rely on track being set to remain in place after
tory in any sort your short game an awful lot London 2012. Sanderson, who quit lega-
of tournament if that’s the case. cy chiefs the OPLC last month, said: “I’m
since 2009 “When he gets himself in a not sure about the legacy of what’s going
and is now position where he’s close he to happen in the stadium for athletics.”
ranked sev- generally holes putts at the
enth in the right time. He hasn’t done it Higginbotham out for season
world. for a while, but I think that if FOOTBALL: Stoke defender Danny
Last month he starts to hole the putts at Higginbotham will miss the rest of the
Rory McIlroy the right time you are going to season after he suffered a cruciate knee
described Woods, see the Tiger of old and that’s ligament injury. Higginbotham will be
who will begin his dangerous. sidelined for six months after picking up
Masters campaign “But I don’t see it this week the injury in the 1-1 home draw against
alongside US Open – I just don’t see it myself.” Chelsea on Saturday.
30 Sport CITYA.M. 6 APRIL 2011

KEY MOMENTS | MADRID MAULING

PAIN IN SPAIN
4 mins: With Gonzalo Higuain only fit enough
for the bench and Karim Benzema ruled out
altogether, Spurs may have thought they were
facing the lesser of three evils in the shape of
Emmanuel Adebayor. But the former Arsenal
striker dispelled that theory early on, escap-
ing the attentions of Jermaine Jenas and
powering a header beyond Heurelho Gomes.

16 mins: If Tottenham’s task wasn’t already

tough enough, Peter Crouch rendered it what
Jose Mourinho later termed an “impossible
mission” with two cautionable offences in the
space of seven minutes. The first transgres-
sion, a late tackle on Sergio Ramos, was clum-
sy and the second on Marcelo, a carbon copy
of his first misdemeanour, was utterly foolish.
▲
and accomplished teams would have
REAL MADRID 4 crumbled in similar circumstances.
“It was a difficult night,” said
Redknapp. “You need a miracle here
TOTTENHAM 0 to win with 10 men. Better teams
than us would probably have strug-
gled tonight. It was an uphill
task, an impossible task. For
arrived in Madrid with hopes of an
upset, having claimed the scalps of
both Milan sides this season and seen
unfashionable Sporting Gijon end
Jose Mourinho’s nine-year unbeaten
home league record at the weekend.
Yet even before kick-off they suf-
fered a blow, winger Aaron Lennon
rattled and Real rampant, and the vis-
itors’ hopes deteriorated further in
the 16th minute when Crouch was
dismissed by referee Felix Byrch for
his second clumsy sliding tackle.
Bale, by now back on the left, hit
the side netting as Spurs regrouped,
although Adebayor should have had a

FOOTBALL
BY FRANK DALLERES
TOTTENHAM manager Harry
Redknapp blamed the early sending-
off of Peter Crouch for a ruthless dis-
mantling by Real Madrid that
reduced his side’s European dreams
to rubble.
Two goals from former Arsenal for-
87 mins: Adebayor added a second in the ward Emmanuel Adebayor, a blister-
57th minute, his 10th goal in 10 appearances ing shot from Angel di Maria and a
against Spurs, and Angel di Maria struck the Cristiano Ronaldo volley leaves Spurs
goal of the evening 15 minutes later. But the with only the faintest of hopes in
strike which rendered the second leg almost next week’s quarter-final second leg.
irrelevant arrived three minutes from time It was a rude awakening to a mar-
when Cristiano Ronaldo found the net with his vellous debut season in the
13th attempt of the night – a volley which Champions League, although
squirmed under the body of Gomes. Redknapp insisted even the
Continent’s most battle-hardened
the first half I thought we withdrawing from the starting second before half-time, somehow
did fantastic with 10 men, line-up because he felt unwell, failing to connect with a header
we had a couple of good which thrust Jermaine Jenas into when the goal was at his mercy.
opportunities on the the starting line-up and The Togo forward, on loan from
break but we ran out caused Redknapp to Manchester City, made no mistake in
of steam. It was one switch Gareth Bale to the 57th minute, however, punishing
of those nights.” the right wing. non-existent marking to head anoth-
Of next It soon got er corner past Heurelho Gomes.
Wednesday’s worse: Real Real turned on the style for their
return match at took the lead third in the 72nd minute, Argentina
White Hart Lane, in the fourth star Di Maria manufacturing an
Redknapp (right) added: minute when angle and a slight gap to lash an
“It’s going to be very diffi- Adebayor leapt unstoppably fierce high drive into the
cult. It certainly couldn’t be highest to meet a far corner.
much more difficult than corner and his head- Ronaldo, by now eager to add his
being 4-0 down to Real er crept between the name to the scoresheet, twisted the
Madrid, but we’re at home, legs of Luka Modric knife again with three minutes
we’ll give it a go.” on the goal-line. remaining, Gomes allowing his low
Tottenham may have Tottenham were volley to creep in at the near post.
CITYA.M. 6 APRIL 2011
Revenge not
on the menu
for Lampard
CHELSEA
MANCHESTER UTD
▲
FOOTBALL
BY JAMES GOLDMAN
CHELSEA midfielder Frank
Lampard admits defeat in the 2008
Champions League final at the
hands of Manchester United was
the lowest point of his career, but
insists he and his team-mates can-
not allow thoughts of revenge to
cloud their preparation ahead of
tonight’s quarter-final first leg.
In an epic penalty shootout in
Moscow, John Terry and Nicolas
Anelka failed to convert and hand-
ed the trophy to United, adding to a
long list of Chelsea near misses in
Europe’s most prestigious club
competition.
Lampard, who is set to make his
500th appearance in a Chelsea shirt
tonight, could line-up alongside as
many as seven survivors from that
final, but maintains thoughts of
retribution aren’t on his mind.
Europe may bring out
the very best in Torres
FOOTBALL COMMENT
TREVOR STEVEN
C
HELSEA’S team picks itself –
apart from up front. For me,
Didier Drogba has to play, so
it then becomes a question of
who partners him: Fernando Torres
or Nicolas Anelka.
On form you’d go with Anelka,
because I watched Torres on
Saturday and he did not look like a
goal threat, and the Frenchman
definitely has a better understand-
ing with Drogba.
Having said that, Torres has a
SAM TORRANCE’S IN-DEPTH
PREVIEW: PAGES 28-29
Sport 31
HISTORY | LAST 10 MEETINGS
1 Mar 11 Chelsea 2-1 Man Utd
8 Aug 11 Chelsea 1-3 Man Utd
3 Apr 10 Man Utd 1-2 Chelsea
8 Nov 09 Chelsea 1-0 Man Utd PL
PL
CS
PL
9 Aug 09 Chelsea 2-2 Man Utd CS*
11 Jan 09 Man Utd 3-0 Chelsea PL
21 Sep 08 Chelsea 1-1 Man Utd PL
21 May 08 Man Utd 1-1 Chelsea CL**
26 Apr 08 Chelsea 2-1 Man Utd PL
23 Sep 07 Man Utd 2-0 Chelsea PL
Key:
* Chelsea win on pens;
** Man Utd win on pens;
PL Premier League;
CL Champions League;
He said: “It’s a similar team but I CS Community Shield
promise you, revenge isn’t in our Lampard is set to play his 500th game for Chelsea Picture: ACTION IMAGES
minds. When you play for a long
period of time, as I have here, you
see the ups and downs. You collect
them. You don’t feel thoughts of
revenge against anyone.
“In the end it’s a bad memory
because we lost. The reason for
being in the final is to win it. To
score was a nice achievement, but
there was a feeling of frustration.
“It would be lovely to put that
right but we don’t talk about it. A
few of us are still here, but it’s not
something that gets brought up.”
United boss, Sir Alex Ferguson,
69, meanwhile insists he has no
retirement plans in place just yet –
but has admitted he would stand
aside if the Manchester United hier-
archy felt the manager’s job was
too much for him
He said: “If I was told, ‘Alex, you
are too old, we have decided to turn
the page’, no problem.”
Wayne Rooney has accepted the
FA charge against him for the rant
into a TV camera at Upton Park on
Saturday, but he has appealed
against the two-match ban that is
supposed to accompany it.
great record against Manchester
United and I would be tempted to
gamble on him tonight. He has to Outstanding bars and restaurants and the best views
get that goal sooner or later.
Chelsea have a few things in of the match action at every home game
their favour. They have home
advantage, and so will have a rau-
cous crowd right behind them, are
playing reasonably well, and can
boast recent wins over Manchester Join the Club Level waiting list to take your
City – and, crucially, United –
matchday experience to the next level
under their belts.
Yes, they might have failed to
beat Stoke on Saturday but I don’t call 0845 262 0001 email clublevel@arsenal.co.uk
believe that will take too much
wind out of their sails – after all, visit www.arsenal.com/clublevel
the Champions League is the com-
petition they really believe they can
win this season.
Will Rooney’s punishment for
swearing make him more fired up?
I’m not sure that’s possible. What
will be interesting is seeing who Sir
Alex Ferguson picks, because it’s
far harder to predict his selection.
SPORT
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