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BUSINESS WITH PERSONALITY

Issue 1,397 Tuesday 7 June 2011 www.cityam.com FREE

OSBORNE SNUBS VICKERS


ON LLOYDS BRANCH SALES ture would be unlikely to give rise to a

EXCLUSIVE
strong challenger, at least in its early
BY JULIET SAMUEL years,” the Vickers Commission said in
THE Treasury has issued a remarkable April, adding: “The commission there-
snub to Sir John Vickers, chair of the fore suggests that the government
Independent Commission on Banking seek agreement with Lloyds to
(ICB), by distancing itself from the enhance the divestiture substantially.”
main recommendation contained in But a Treasury source has told City
his interim report on the future of A.M. that despite ongoing communica-
Britain’s banks, City A.M. has learned. tions between Lloyds and the govern-
Sir John had called for Lloyds to sell ment, the Treasury has made no
“substantially” more than the current attempt to do as Vickers suggested and
620 branches that are on the block in a intervene in the sale process.
bid to boost competition in the retail “It’s not unreasonable for Lloyds to
banking sector. continue with the sale process,” the
But City A.M. understands that the source said, adding: “I wouldn’t jump
Treasury is happy for Lloyds to proceed to any conclusion about what the ICB
as planned with a sale of just 620 is going to recommend. As important
branches, making it all but impossible as how the branches are sold is who
for Vickers’ key recommendation to be they’re sold to.”
implemented and throwing into ques- The source also suggested that
tion the government’s commitment Vickers’ aims could be met in other
to the commission’s report. ways: “Either you increase the number
Lloyds will kick off the sale process of branches for sale or you sell them to
as early as this week by sending out an someone who has some branches.”
information memorandum to poten- But the ICB has made clear that it is
tial bidders, likely to include Virgin concerned not just about bidders’ abil-
Chancellor George Osborne (left) is leaving little room for the
Money, NBNK Investments, National ity to use the branches to compete but
implementation of Sir John Vickers’ (above) report
Australia Bank and Spain’s BBVA, who also about Lloyds’ size and the scale of
will then begin due diligence on the the current disposal, saying “the
assets. planned divestiture is insufficient”. fight on bank reform by giving Vickers ment by our advisers and it would add der a solid base from which to com-
But Vickers, whose recommenda- The Treasury’s stance casts doubt on responsibility for policy development. costs to the whole process because pete with the UK’s established banks.
tions chancellor George Osborne has its commitment to follow through on But once Lloyds sends out its infor- advisers don’t work for free.” It is understood that the Treasury
promised to implement in full, has the Vickers recommendations, which mation memorandum for the sale, it In addition, it could also require was also involved in overseeing the EC
said the sale needs to be “substantially will have no statutory power and need will become difficult to add branches renegotiation of the original agree- deal, which was crucial in allowing
enhanced” in order to promote com- government backing to become law. to the roster because bidders will ment Lloyds struck with the European the UK to waive competition law so
petition. Analysts have estimated this Failing to implement them could begin due diligence on the assets. A Commission (EC), under which the EC that Lloyds could buy HBOS during
could equate to an extra 200-400 cause friction between the Tory and source close to one potential bidder has vetted every branch included in the financial crisis.
branches. Liberal Democrat sides of the coali- said yesterday: “If the goalposts are the sale on factors like location and Lloyds and the ICB both declined to
“The Lloyds Banking Group divesti- tion, which both agreed to avoid a moved, it would require a reassess- footfall to ensure that it offers any bid- comment.

Temporary tax cuts could boost UK economy, says IMF


said yesterday. growth. This would have to go hand Plan B,” commented Mark Littlewood The British economy will expand

UK ECONOMY
Despite a resounding message of in hand with deeper reforms and of the Institute of Economic Affairs. by 1.5 per cent this year, the IMF
BY JULIAN HARRIS
support for chancellor George even lower public spending, the IMF’s “But he does need Plan A+. He expects, down from its previous fore-
TAX cuts could kick start the UK Osborne’s “Plan A” of immediate fis- annual verdict states. Deficit reduc- needs a serious strategy for growth. cast of 1.7 per cent. Growth of 2.5 per
economy if it suffers a “prolonged cal consolidation, the IMF proposed tion remains “essential”, it added. And if the government does have any cent will still be achieved in the
period of weak growth”, the temporarily slashing taxes in the “The IMF’s analysis makes it plain room for manoeuvre, tax cuts should medium term, the IMF predicts.
International Monetary Fund (IMF) event of slower than expected that George Osborne doesn’t need a be the priority,” Littlewood added. ALLISTER HEATH: P2; NEWS: P4-P5

FTSE 100 ▲5,863.16 +8.15 DOW ▼12,089.96 -61.30 NASDAQ ▼2,702.56 -30.22 £/$ 1.64 unc £/¤ 1.12 unc ¤/$ 1.46 unc Certified Distribution
04/04/11 - 01/05/11 is 103,899
2 News CITYA.M. 7 JUNE 2011

The IMF is right to back UK austerity NEWS | IN BRIEF


Strauss-Kahn pleads not guilty
Former IMF chief Dominique Strauss-
Kahn yesterday pleaded not guilty to
force foreigners to lend to it. No won- would of course allow the same cuts inflationary bubble; the reductions charges he sexually assaulted a New
der the IMF made it clear yesterday while spending more in non-adjusted were largely painless as they were York hotel maid. He was met at the
that any Plan B should actually cash terms. The government insists caused by a slump in unemployment courthouse by hotel workers chanting
involve cutting spending faster (it that departmental cash spending is benefits. He cut in more difficult cir- “shame on you”. Strauss-Kahn, 62, faces
highlighted entitlements, such as fixed, but we shall see. cumstances by 1.4 per cent in 1985-86. up to 25 years in prison if convicted on
benefits); cutting taxes temporarily These cuts, while not huge, will be Spending grew slightly in the follow- charges of attempted rape, sex abuse, a
on the poor, investments and jobs; painful because soaring debt pay- ing two years – but expenditure over criminal sex act, unlawful imprisonment
and engaging in more quantitative ments and protected areas mean that the four-year period fell by 3.1 per and forcible touching. The next hearing
EDITOR’S LETTER easing. Whatever one thinks of these reductions to many departments will cent. Spending only returned to the date at New York Supreme Court will be
ideas, they are very different to spend- be much larger than the overall fig- levels of 1984-85 in 1990-91 – and 18 July.
ALLISTER HEATH ing more, taxing the City more or bor- ure – and also because in many cases remained lower as a share of GDP.
rowing more. The only viable Plan B the wrong things will be cut. But a 3.7 Kenneth Clarke cut spending by 2.2 Cable retreats on private equity
IT shouldn’t have come as a surprise entails more cuts, not fewer. per cent drop, while substantial, is per cent in 1996-97 –and then Gordon Vince Cable, the business secretary, was
that the IMF as well as other interna- To see why, look at history. The less than the swingeing real terms cut Brown stuck to his predecessor’s forced into a climbdown yesterday after
tional bodies have given George chancellor will be cutting total, real imposed in just one year by Labour’s plans and went on to cut another 0.5 officials at his department hastily moved
Osborne’s austerity plans the thumbs- terms spending by just 0.6 per cent in Denis Healey in the 1970s. Following per cent or so in 1997-98, taking the to “clarify” his comments on the role of
up. All over the world, profligate 2011-12, followed by 1.1 per cent in the orders of the IMF, a bankrupt two-year reduction to 2.7 per cent. private equity firms in providing health-
nations are working on policies to 2012-13, 1.3 per cent in 2013-14 and 0.8 Britain slashed total spending by 3.9 Osborne’s plans are far from per- care. Cable told a GMB conference he
rein in spending and reduce their per cent in 2014-15. Overall, spending per cent in real terms in 1977-78 fect. He desperately needs a supply- had ordered officials to investigate if
budget deficits; those that are failing will be reduced by 3.7 per cent – (from £337.2bn to £323.9bn in 2009-10 side agenda to boost growth. But his there was an “underlying problem with
to do so are finding it increasingly dif- assuming that the economy behaves prices) – so in just one year, public real gamble is that he is spending as private equity companies supplying pub-
ficult to convince those with funds to the way he hopes, that interest pay- spending was reduced by more than much as he thinks he will be able to lic services” following the “shocking state
lend to continue to prop them up. ments on index-linked gilts don’t rise Osborne is planning over four years. get away with – and cutting as little as of affairs” at care home provider
There is no viable alternative to reduc- further as a result of rampant infla- There have been other instances of possible. The Labour party may not Southern Cross. But the business depart-
ing the budget deficit – reversing tion and that the chancellor holds his cuts in the past 40 years or so. Lord see it – but the IMF certainly does. ment later said the probe had been into
course and borrowing even more just nerve. Because these are real-term (Nigel) Lawson cut by 2.6 per cent in allister.heath@cityam.com the companies that provide public servic-
isn’t an option. No government can reductions, a higher rate of inflation 1988-89, at the height of his own Follow me on Twitter: @allisterheath es rather than private equity alone.

7th Floor, Centurion House,


24 Monument Street, London, EC3R 8AJ
Tel: 020 7015 1200 Fax: 020 7283 5334
Geithner pans
UK light touch
Email: news@cityam.com www.cityam.com
Editorial
Editor Allister Heath
Deputy Editor David Hellier
News Editor David Crow
Acting Night Editor Marion Dakers
Business Features Editor Marc Sidwell
REGULATION “As we act to contain risk in the US,

Lifestyle Editor Zoe Strimpel


Sports Editor Frank Dalleres BY RICHARD PARTINGTON we want to minimise the chances that Bob Diamond’s Barclays has to pay $2bn to the liquidator of Lehman Brothers
Art Director Craig Gaymer it simply moves to other markets

Barclays forced to pay out


Pictures Alice Hepple US TREASURY secretary Tim Geithner around the world,” Geithner said.
Commercial yesterday hit out at what he said was Asian markets including Hong Kong
Sales Director Jeremy Slattery “light touch” regulation in the UK and Singapore could benefit from
Commercial Director Harry Owen before the financial crisis, and warned tough new rules in Europe and the US,
European regulators to take a tough as companies look for less-regulated
Head of Distribution Nick Owen
stance on banks. business environments to operate in.
In an outspoken speech, Geithner The US intervention is bound to BANKING The $2bn that Barclays must return

Distribution helpline said: “The UK’s experiment in a strate- raise eyebrows in the City, as Europe was the amount of margin collateral
If you have any comments about the distribution BY RICHARD PARTINGTON
of City A.M. Please ring 0207 015 1230, or email gy of ‘light touch’ regulation to attract already has some of the toughest finan- in its possession at the time of that
distribution@cityam.com business to London from New York and cial rules in the world on some issues, BARCLAYS is being forced to return February ruling.
Frankfurt ended tragically. ” including strict regulations on bonus- $2bn (£1.2bn) in margin collateral to The other $2bn in margin assets is
Editorial Statement Geithner also urged Europe to es, while sub-prime started in the US. the trustee for the brokerage arm of held by third parties or the trustee,
This newspaper adheres to the system of match the US on financial regulation Lehman Brothers, the collapsed US according to Barclays.
self-regulation overseen by the Press Complaints to stop emerging markets from under- US Treasury secretary bank. In February, the judge ruled that
Commission. The PCC takes complaints about the cutting global rules and encouraging US bankruptcy judge James Peck Lehman’s sale of its North American
editorial content of publications under the Editor’s Tim Geithner wants
Code of Practice, a copy of which can be found at arbitrage. yesterday said the trustee, which is liq- business to Barclays at the height of
www.pcc.org.uk He said the US wants to avoid a “race the US and Europe to uidating what is left of the brokerage the financial crisis was fair.
Printed by Newsfax International,
to the bottom” around the world, lead on tough global business, is entitled to $4bn in margin A Barclays spokesman said that the
Beam Reach 5 Business Park, where countries reduce regulation in financial regulation assets that have been the subject of a bank plans to appeal portions of the
Marsh Way, Rainham, Essex, RM13 8RS order to attract business. long-running legal fight with Barclays. February decision.

WHAT THE OTHER PAPERS SAY THIS MORNING


groups PepsiCo and Starbucks, expects
to conclude a deal in the next few
months.
SPAIN TO SEEK REDRESS OVER E. COLI ALCOHOL SALE BAN RETURNS TO EUROPEAN CENTRAL BANK RISKS TALK OF CHANGES AT STABLE JP
CLAIM CREDIT SUISSE LOSES TOP ANALYST HAUNT TESCO BEING WIPED OUT BY BAIL-OUTS MORGAN
Spain will demand “100 per cent” com- Tony Shiret, the highly rated retail ana- Tesco’s troubled American business The European Central Bank is “look- JP Morgan Chase & Co boss James
pensation for the damage suffered by lyst and a vocal critic of Marks and has been dealt another blow, as a pro- ing increasingly vulnerable” and may Dimon rode out the financial crisis
its farmers over unfounded accusa- Spencer under the leadership of Sir posed ban on the sale of alcohol from face “hefty losses” as a result of prop- with one of the most stable manage-
tions that they were the source of the Stuart Rose, has left Credit Suisse after self-checkout terminals in California ping up indebted Eurozone countries, ment teams in the financial world.
E. coli outbreak in Germany that has 18 years with the bank. The veteran moves one step closer to becoming a leading think-tank has warned. The That might be about to change. Two
killed 22 people and made thousands analyst, one of the most well-known law. More than 70 per cent of Tesco’s International Monetary Fund’s part- executives on the New York bank’s 15-
sick. Rosa Aguilar, Spain’s environ- and highly regarded in the retailing 175 Fresh & Easy stores are in ner in the recent international bail- person operating committee, com-
ment and rural affairs minister, said sector, was made redundant last week, California. All rely solely on self- out missions is itself in danger of mercial-banking chief Todd Maclin
the demand would be put to a meet- as part of job cuts in its equities checkouts, giving it a big cost advan- becoming a liability, Open Europe has and top international executive Heidi
ing of European Union farm ministers department. “He’s like the Godfather tage, but a union-backed bill aimed at argued. Miller, are expected to step down
in Luxembourg today. She did not of the sector in terms of experience,” tackling under-age drinking has from those jobs soon, according to
specify how much Spain would claim. said one person who has worked with passed its first hurdle. GAS GLUT IS FADING AS GLOBAL people familiar with the matter.
him in the past. DEMAND SURGES
TATA TEA GROUP BREWING UP DEAL TO ONE MILLION PEOPLE FAILED TO GET Only six months ago, the GOLDMAN PLANS TO FIGHT BACK
SELL STAKE TO STRATEGIC INVESTOR CAIRN AWAITS RULING ON ECO WAR- ANY OLYMPIC TICKETS International Energy Agency was AGAINST SENATE REPORT
Tata Global Beverages, owner of the RIORS One million people who applied for warning that the world was suffering Goldman Sachs Group, trying to
UK’s Tetley Tea and the US’s Eight Greenpeace will continue its cam- London 2012 Olympic Games tickets a gas glut that would last until 2015. counter a Senate subcommittee
O’Clock coffee, is in talks to sell about paign to try to stop Cairn Energy from did not receive any, The Times under- The IEA said that a combination of report that is fuelling investigations
20 per cent in its international opera- drilling in the Arctic as a Dutch court stands. The figure is far higher than factors made rising demand for gas and suspicion of the firm, plans to
tions to a strategic investor. The deferred its ruling on an injunction previous estimates that suggested more likely, with usage potentially accuse the subcommittee of drastical-
world’s second-biggest tea group, against the environmental organisa- only only 250,000 people out of the growing by 50pc before 2035. Now the ly overstating Goldman’s bets against
which has partnerships with beverage tion until Wednesday. 1.8m who applied had missed out. oversupply may be gone before 2015. the housing market in 2007.
CITYA.M. 7 JUNE 2011 News 3

Gaunt Jobs unveils iCloud music system


TECHNOLOGY

instantly access any song matically,” said Jobs, form, saying iOS has sold over
BY RICHARD PARTINGTON & STEVE DINNEEN purchased on iTunes on any whose decision to head- 200m devices. This would give it 44
device. Using a function line the event assuaged per cent of the mobile platform
STEVE Jobs yesterday broke his med- known as iTunes Match, the some concerns about market. Android trails on 28 per
ical leave to announce a new cloud- system scans users’ hard drives his health, although cent, Blackberry maker RIM on 19
based music service that threatens and automatically makes the Apple’s shares slid 1.6 per cent and others on nine per
to sink rivals such as Spotify. songs it finds available on the per cent after the cent.
The gaunt-looking Apple boss iCloud. In contrast, users of press conference. In a wide-ranging press event, the
unveiled iCloud, a music-streaming Google and Amazon cloud- Jobs went on to unveil a new ver- company also unveiled a revamped
and online data storage service that based storage have to upload every sion of the company’s iOS mobile version of Apple’s Mac operating
can be accessed on devices such as song themselves. operating system. He hit back at system, OS X Lion, which it branded
the iPad and the iPhone. “iCloud is integrated with your reports claiming Apple is losing the world’s “most advanced operat-
The service will allow users to apps, so everything happens auto- ground to Google’s Android plat- ing system”.

HMV set to
Greece sells reveal deal
telco stake as with banks
protests grow


RETAIL
SHARES of HMV, the embattled music
retail chain, shot up yesterday on
speculation that it was on the verge of
a restructuring deal with its creditors.
EUROZONE agency Fitch warned that even a “vol- Peter Cruddas founded CMC Markets in 1989 Led by Lloyds Banking Group and

BY JULIET SAMUEL untary” debt restructuring could con- Royal Bank of Scotland, the state-

CMC Markets founder to


stitute a sovereign default. owned lenders, are expected to have
PROTESTORS crowded into Athens’ The troika has been scrambling to agreed to provide the retailer with a
Syntagma square outside parliament incorporate some form of private sec- two-year refinancing of between
yesterday as the government tor burden-sharing into the new £210m and £230m.

become Tory co-treasurer


announced that it is selling off a ten bailout plan to spread the cost. But it is Under the agreement expected to
per cent stake in Hellenic Telecom. also anxious to avoid any action that be unveiled this morning, the banks
The deal sees Deutsche Telekom, could constitute a technical default. are to be granted warrants in the firm
which is 30 per cent owned by the Fitch said that even a consensual worth up to five per cent of the com-
German government, buy the equity debt swap with Greek bondholders – pany’s shares, handing them equity
for $400m (£245m) as part of a €50bn whereby short-dated debt is in the company, according to Sky
POLITICS

(£45bn) Greek privatisation scheme. exchanged for longer-dated notes – the Westminster voting system. News. Shares of the company closed
The protests, which have been run- would count as a “restricted default” BY DAVID CROW Fink said: “I am delighted that up 49.4 per cent at 12.25p per unit.
ning for 12 days, swelled to at least under certain conditions. Peter is joining as co-treasurer of the MORE ON HMV: PAGE 14
80,000 people yesterday as the cabinet It said that if the new debt offered is PETER Cruddas, the billionaire entre- Conservative Party and I greatly look
met to discuss the latest round of cuts, “materially less advantageous to bond- preneur behind trading giant CMC forward to working closely with him ANALYSIS l HMV Group PLC
which are expected to include €25bn holders than the existing securities” Markets, has been appointed as co- over the coming years.”
worth of privatisations on top of those and if the action “is, or appears to be, treasurer of the Conservative party. Cruddas founded internet securi- 18 p
already announced and €22bn in necessary to avoid insolvency and/or He will work alongside existing ties dealer CMC Markets in 1989 and 12.25
budget cuts from 2012 to 2015. illiquidity”, it would rate the sovereign treasurer Stanley Fink, the former in 1996 branched out from tradition- 6 June
In return, Greece is likely to get as having defaulted. chief executive of hedge fund manag- al broking into spreadbetting and 12
funding worth around €85bn from the l Meanwhile, Portugal’s centre- er Man Group. online trading.
troika – the IMF, the European Central right PSD party is locked in coalition Tory sources said Cruddas had In 2007, Wall Street investment
Bank (ECB) and European Commission talks after winning the largest share of proven his fundraising abilities as co- bank Goldman Sachs snapped up a 10
– though some estimates run higher. the vote in Sunday’s elections. The PSD treasurer of the No2AV campaign, per cent stake for £150m – just 18 8
But efforts to agree on the funding has said it will implement cuts in which secured a big win in last months after Cruddas pulled a flota-
were dealt a blow yesterday as ratings return for Lisbon’s €78bn bailout. month’s referendum on changing tion amid market turmoil. 7 Apr 25 Mar 14 Apr 10 May 31 May
4 News CITYA.M. 7 JUNE 2011

CBI rallies behind Plan A but


calls for pro-growth agenda...
avoid any repeat of the “counter-pro- CBI’s one-year-on verdict of the coali-


UK ECONOMY
BY JULIAN HARRIS ductive” hike in North Sea oil taxes, tion. “Financial services remain one of
announced in April. our world class industries, and need to
NEW Confederation of British In a global economy, governments be treated as such,” Cridland said.
Industry president Sir Roger Carr are “in a beauty parade” to attract Strikes that cause mass disturbance
praised the “rigour and transparency” investment and talent, CBI director- to the public must be combated by
of chancellor George Osborne’s deficit general John Cridland added. The gov- fresh legislation, the CBI argued.
reduction plans yesterday, yet warned ernment must “ensure the phrase The business group is calling for
that the government must do more to ‘open for business’ is a reality, not an unions to require a mandate from 40
boost growth. aspiration,” he said. per cent of workers eligible to vote in a
The Centrica chairman urged the The City also received a ringing strike ballot, before being able to take
Sir Roger Carr begins his term as the new chairman of the CBI Picture: REX coalition to cut personal taxes and endorsement, at the launch of the industrial action.

...as directors
take a swipe
at high taxes
tious than they currently are, and the

UK ECONOMY
BY JULIAN HARRIS rate of employers’ national insurance
contributions also needs to come
TAX burdens on businesses are barely down,” said IoD head of taxation,
any lighter under the coalition govern- Richard Baron.
ment than under Labour, the Institute Chancellor George Osborne’s tax
of Directors (IoD) will claim today. rise on North Sea oil will also be tar-
Despite cuts to corporation geted by the IoD. “All this will do
tax, a wave of other taxes are is crush productive sectors of the
continuing to weigh down economy which the government
growth in the economy, the should be nurturing,” Baron
IoD, led by Miles Templeman added.
(pictured) will say. The Confederation of British
National insurance, busi- Industry yesterday called the
ness rates and road fuel North Sea hike the “single
duty cause some biggest failure” of the govern-
small and medium ment’s tax record so far.
sized firms (SMEs) “Everyone needs to under-
to face tax rates stand the true size of the tax
between 32 and 43 burden,” Baron said.
per cent, it “Campaign groups
reports. like UK Uncut would
Given these be more likely to
rates, the reductions achieve their objec-
in corporation tax tives if they spent
“will do little or noth- more time understand-
ing to help smaller ing the consequences
businesses”, it adds. of high taxes. If businesses
“Plans to reduce cor- cannot thrive because of a
poration tax rates need high tax burden, funding for
to be much more ambi- public services will dry up.”

Small businesses say government


must cut NI to encourage hiring

UK ECONOMY start-up firms to be exempt from up


£5,000 of NI payments on the first 10
A REDUCTION in National Insurance employees that they hire.
payments would help small business “Small businesses want to employ
take on more new staff, according to but have told us that they need incen-
the latest figures from the Federation tives to do so,” said FSB chairman
of Small Businesses (FSB). John Walker. “The Government must
The industry body is calling for the extend the National Insurance
government to change its policy on Contributions holiday to existing
National Insurance, after a survey of businesses if small firms are to take
more than 1,700 small business own- on new staff and so help tackle high
ers showed that almost a third of unemployment.”
respondents would be more likely to Other obstructions to employment
make hires if contributions were cited by the FSB included insufficient
reduced for the first six months of work and uncertainty over contracts
employment. (37 per cent), the state of the economy
Companies would also be helped by (33 per cent), cash-flow (31 per cent)
an extension of the NI holiday and access to finance and the cost of
scheme, introduced in 2010 to allow credit (16 per cent).
News 5

John Lipsky has backed chancellor George Osborne’s deficit reduction plans

Government’s
plan A given
IMF approval
in the medium term, the IMF estimated.

ECONOMICS
BY RICHARD PARTINGTON But it acknowledged that there were
major risks to this outlook, as for all big
THE INTERNATIONAL Monetary Fund economies.
(IMF) has said there is no need for chan- George Osborne welcomed the IMF’s
cellor George Osborne to slow his deficit annual economic assessment, which
reduction plans, or for Britain to draw comes after he dismissed criticism from
up a “plan B” for the economy. more than 50 left-leaning economists
“The weakness in economic growth over the weekend that his plans risked
and rise in inflation over the last several derailing economic recovery.
months was unexpected. This raises the If the economy grew as expected, the
question whether it is time to adjust government and Bank of England policy
macroeconomic policies. The answer is looked about right, the IMF said.
no as the deviations are largely tempo- “We consider the current deviations

@ @
rary,” the IMF’s annual report on the UK from forecast represent temporary fac-

@
economy said. tors and that the current policy mix
Shadow chancellor Ed Balls had strikes us as appropriate,” IMF acting
called for a change in economic strategy, managing director John Lipsky told a
blaming the government’s approach news conference after the report was
for sluggish growth and job losses. published.
But the IMF said the government But the IMF also said tax cuts and

@
should maintain its current course of other measures may be needed if
deficit reduction and monetary policy, growth proves persistently weak.
only considering an alternative if there Lipsky said unemployment remained
is a “prolonged period of weak growth “unacceptably high” and encouraged
and high unemployment”. the government to press ahead with
The economy is likely to grow by increasing the retirement age and cut- FOR MORE NEWS
around 1.5 per cent this year before
achieving growth of about 2.5 per cent
ting public sector pensions to boost the
economy.
www.cityam.com
6 News CITYA.M. 7 JUNE 2011

Beware the excess baggage of Samsonite


PRADA and Samsonite will go cap in which counts Asia Pacific as its sin- But even if we did, Samsonite is still
hand to Hong Kong investors for a gle largest market, is well-exposed to massively exposed to mature
combined $4bn (£2.4bn) when they China et al’s insatiable demand for economies like North America and
launch their IPOs this month. Both European luxury goods. In the year Europe, which accounted for
will claim membership of the luxu- to January, its sales in the region around 60 per cent of 2010 net sales.
ry goods sector, which is booming in surged by 63 per cent to €645.7m. No wonder existing shareholders
Asia. One is a century-old Italian China accounts for seven per cent of CVC and RBS, which had to step in
doyen of haute couture, a byword its sales; adding Macau and Hong amid funding difficulties in 2009,
for sophistication and class. The Kong takes it to 19 per cent. are selling 40 per cent of their shares
other makes suitcases. We prefer the The bankers handling in the IPO. Investors would be wise
first. Samsonite’s IPO also point to boom- to eschew the offer and spend their
The valuation implied by the ing demand for “luxury luggage” in money on Prada instead.
HK$36.50-HK$48 a share price range Asia as reason for their price range, david.crow@cityam.com
for Prada’s IPO is certainly rich, at 27 which implies a valuation of 17 to 22
times 2011 earnings forecasts. times 2011 earnings estimates.
Burberry, its closest rival, trades at
22.3 times the same multiple.
We’re not sure we buy into the
notion of a suitcase as a luxury item BOTTOMLINE
But no-one can deny that Prada, akin to a Prada bag or pair of shoes. Analysis by David Crow

Prada’s indicative IPO pricing would value it above European rivals

Prada prices
HK listing
IPO at up to $2.6bn.

RETAIL
BY HARRY BANKS At the top end of
the range, the IPO is
ITALIAN fashion house Prada is pric- being priced at 27
ing its initial public offering (IPO) in times projected
Hong Kong to raise up to $2.6bn 2011 earnings, high-
(£1.6bn) and give the maker of luxury er than the aver-
bags and Miu Miu dresses a higher val- age of European
uation than its European peers. top luxury
Prada set an indicative price range groups such as
of HK$36.5 to HK$48 (£2.90 to £3.80) a Tod’s, Burberry and
share for the IPO, a source said yester- LVMH.
day, valuing the company at between Official docu-
$11.4bn and $14.6bn. ments submitted
Prada, which started meeting to the Hong
investors in Singapore to gauge Kong Stock
appetite for the deal, is the first Italian Exchange last
company to float in Hong Kong as it week ahead of
seeks to tap an Asian consumer mar- the listing
ket that accounted for 40 per cent of revealed Prada chair-
the group’s €2bn sales in 2010. woman Miuccia Prada
After scrapping several attempts to (pictured) as one of the
list its shares in the past, Prada is highest-paid people in
offering 16.5 per cent of its enlarged fashion, taking home
capital, or 423.3m shares – valuing the £8.6m in 2010.

Benalmadena 7 nights 3Ì from £189pp** Moncler abandons float plans


Fuengirola 7 nights 4Ì from £239pp**
after selling a 45 per cent stake
Marbella 7 nights 5Ì from £405pp**
(£372m), giving it the funds it needs

CONSUMER
without submitting to a risky IPO.
MONCLER has sold a stake to invest- Eurazeo will become Moncler’s
ment company Eurazeo, allowing the largest investor, replacing private equi-
upscale clothing maker to sidestep a ty group Carlyle Group, whose holding
*Price correct as at 26 May 2011. Available to book now for travel from 10 June to 9 August 2011. **easyJet holidays prices rocky market for European listings will shrink from 48 per cent to 17.8 per
shown are for seven nights from 18 June 2011 with flights from London Stansted and are per person based on two people which would have likely demanded it cent.
sharing. 3* Benalmadena accommodation is the Los Pintores Hotel on a room only basis, 4* Fuengirola accommodation is be sold at a big discount. The European market for flotations
at the Hacienda Puerta del Sol on a bed and breakfast basis and the 5* Marbella accommodation is the Incosol hotel on The French company, which had has had a difficult year, with many
a room only basis. Variable charges for hold baggage apply and some payment methods may attract a handling fee. The been due to begin roadshows for its deals being pulled and most of those
arrangements for your holiday are made by easyJet, acting as principal for flights and as disclosed agent for travel insurance, Milan listing this week, agreed to sell a that have been completed trading
car rental and airport parking; and by Lowcostbeds acting as agent for accommodation and transfers. See website for details. 45 per cent stake to Eurazeo for €418m below their offer price.
8 News CITYA.M. 7 JUNE 2011

Architects
DOES BROADGATE DESERVE TO BE LISTED ALONGSIDE THESE LONDON LANDMARKS?

Church of St

oppose listing
Mary-Le-Bow
Cheapside
RBS building Listed: 1950
3-5 Bishopsgate
Listed: 1977

of Broadgate Broadgate
Square

PROPERTY European real estate investment bank-


BY MARION DAKERS & HARRIET DENNYS ing Jonathan Lane has also supported Recommended for
this newspaper’s view that new pur- Ye Olde
A POLL of architects suggests that most pose-built office projects in the City Cheshire Cheese listing: 2011
in the industry are against protecting send an important message to firms 145 Fleet Street
buildings on the Broadgate estate looking to move or remain in London. Listed: 1950
from redevelopment. Stephen Greenwood, chief executive
An online survey by the Architects’ of HB Markets, a stockbroker based at
Journal yesterday showed that 68 per
cent think that Broadgate Square near
nearby Finsbury Pavement, also lent
his support. CITY VIEWS: SHOULD BROADGATE BE LISTED? Interviews by Shiba Babamiri and Phoebe Torrance
Liverpool Street should not be the sec- English Heritage has advised the
ond-ever postwar City building to be
given listed status, as recommended
culture secretary Jeremy Hunt to pro-
tect Broadgate as an architectural
MALCOLM PICKERING | PAUL BENNIE | RICHARD CHALMERS |
by watchdog English Heritage. gem, adding extra bureaucracy to any LEADENHALL CORP BENNIE MACLEAN JARDINE LLOYD THOMPSON
A number of senior City figures alterations and potentially putting the
have joined City A.M.’s cam-
paign to allow redevelop-
brakes on new work altogether.
Hunt is expected to
“No, for a building to be “No. The building is not iconic “Yes, I think it should be
ment at Broadgate, as make a final decision listed it needs to have and it is not an archi- listed. The City is known
planned by the site’s own-
ers Blackstone and
in July.
Other figureheads
architectural histo- tectural landmark. for being very old
British Land and tenant backing the new build ry. We are in a Broadgate is only a fashioned and has
UBS. on Broadgate so far period of change few years old and always kept its
Lord Mayor of the City
of London, Michael Bear, has backed
include Merchant
Securities Group chief and renewal so it is it would benefit buildings for
calls to let the group build a £340m Patrick Claridge; David Tait, managing good to build a the area to have years and that is
headquarters for the bank on the site
of 4 and 6 Broadgate.
director of macro directional trading
at UBS; and London Bridge Capital
modernised new UBS head- why people
Morgan Stanley’s chairman of chairman Adam Hart. building.” quarters there.” like London.”
CITYA.M. 7 JUNE 2011 News 9

Diageo ends SABMiller deal WS Atkins sets out plan


CONSUMER The arrangement brings to an end ANALYSIS l Diageo
to tackle pension deficit

BY MARION DAKERS a 10-year-old deal between East


African Breweries and SABMiller, 1,350 p 1,291.00
DIAGEO has agreed to buy the last 20 which allowed the firms to brew and 6 June £28m.


INDUSTRY
per cent stake in its Kenyan Breweries market each other’s beers in Kenya Atkins also unveiled its €17.25m
unit from SABMiller in a $225m and Tanzania. ENGINEERING group WS Atkins has (£15.4m) purchase of Pöyry’s oil and
(£137m) deal, as part of a wider plan Diageo said in 2009 that it was thrashed out a deal with its pension gas business yesterday, as part of its
to separate out the two firms’ ties in looking to terminate the arrange- 1,250 trustees to fill its £293m pension expansion of energy operations.
Africa. ment. black hole over ten years. The 130-person business is focused
East African Breweries, Diageo’s The UK firm, best known in Africa The firm will pay up to £32m a on engineering for offshore oil and
African arm, is also selling its 20 per for selling Guinness, Smirnoff and year in cash until 2020 to pay down gas developments, and generated
cent stake in SABMiller’s neighbour- Tusker beer, said in April that sales on 1,150 the deficit, and is also in talks with €20m in sales in 2010.
ing Tanzania Breweries in a public the continent rose by 10 per cent in 1,400 employees to cut the link Shares in FTSE 250-listed WS
offering on the Dar-es-Salaam Stock the first fiscal half, and that it expect- between their pension pots and Atkins closed up 0.8 per cent at 818p
Exchange. ed growth to accelerate this year. 7 Apr 25 Mar 14 Apr 10 May 31 May future pay rises, saving an estimated yesterday.

Melrose sells
Marston’s to Dynacast in
ring changes £360m deal

for landlords


INDUSTRY
MANUFACTURING buyout firm
Melrose said it agreed to sell its
Dynacast business, which makes die-
cast metal parts, for $590m (£360m)
in cash to a company managed by pri-
vate equity firm Kenner & Co.
CONSUMER the tenant and the owner receives Melrose, which looks to buy under-

BY ELIZABETH FOURNIER rent, without input into management. performing industrial businesses and
“The Retail Agreement is proving to sell them after restructuring, said in
PUB company Marston’s has won be an appropriate and successful March it planned to sell Dynacast
approval from the British Franchise response to the challenges faced by Melrose’s Christopher Miller has completed the £360m sale of Dynacast and that it would return the pro-
Association to changes its tenancy many operators in the tenanted pub ceeds from the sale to its sharehold-
agreements, giving the group more industry,” said Marston’s chief execu-
influence over how individual land- tive Ralph Findlay. “It encourages
MEET THE ADVISER ers.
Melrose had bought Dynacast,
lords run its pubs. entrepreneurialism among licencees.” whose products are used in the auto-
Marston’s has been offering its retail Analysts reacted positively to the Aerospace to JLL Partners for motive, healthcare, consumer and
agreements to it tenants since news, saying that the approval should RAVI $855.6m (£523.5m). telecom industries, along with
2006, with 230 of its 1,600 pubs help the company attract more high GUPTA In 2008 he was also part of the McKechnie Aerospace in 2005 for
now run under the scheme. quality people to the model, which team who advised the Manitowoc £429m from private equity group
The deals mean that gets three times more applicants ROTHSCHILD Company’s acquisition of Enodis, Cinven.
Marston’s gets a share of the than the traditional tenancy. creating a combined food service In 2010, Dynacast posted a 32 per
pubs’ revenues in return for sup- “The Retail Agreement segment with annual revenues of cent increase in revenue at £275.7m,
plying them with food and is Marston’s solution to nearly $2bn. accounting for about a fifth of
drink, choosing the legacy issue of a ROTHSCHILD managing partner Among his more recent deals Melrose’s total revenue.
entertainment large tenanted Ravi Gupta led the team that Gupta led the team that advised the Dynacast chief Simon Newman
licences and deal- estate,” said analyst advised Melrose on the sale of its Board of St Ives disposal of its mag- will remain with the firm, which will
ing with refur- Paul Tucker at Peel Dynacast business yesterday to a azine business to Walstead Newco3, operate as an independent company.
bishments. Hunt. newly incorporated company, KDI a wholly owned subsidiary of Shares of Melrose closed at 335.70p
It’s a big change “Ac c r e d i t a t i o n Holdings, managed by Kenner & Walstead Investments. on the London Stock Exchange,
to the traditional highlights that this Company. The price for the disposal was roughly one per cent down.
relationship is a viable business While at Rothschild, Gupta has £20m, made up of £15m in cash The stock has gained nearly a quar-
between a landlord model, significantly also worked for Melrose in 2007 on payable on completion and £5m in ter of its value since news that
and brewer, where Marston’s landlords will have different to tradi- the disposal of McKechnie loan notes. Melrose planned to sell Dynacast first
beer is supplied to more of a say in management tional tenancy.” emerged in November.
The Capitalist
10 EDITED BY CITYA.M. 7 JUNE 2011
HARRIET DENNYS
Got A Story? Email
thecapitalist@cityam.com
Follow The Capitalist
on Twitter: @citycapitalist

PARK LIFE: TEAM ABU DHABI RAISE


THEIR GAME TO WIN MINT POLO
740 TEAM Abu Dhabi are this year’s win- tured left, left to right) showed the Dhabi’s Al Habtoor played “at the top
ners of the MINT Polo in the Park 32,000 spectators “what professional of his game” to secure the 8-5 victory.
tournament at Hurlingham Park, polo is all about”, defeating the As the polo finished, the Veuve
after a fast-paced final against defending champions 10-5. Clicquot players’ after-party started,
Gaucho Team Buenos Aires. The team continued their winning where Made In Chelsea’s Millie
Abu Dhabi took an early lead in run on Saturday by beating Otkritie Mackintosh, Hugo Taylor and
the three-day event, starting with Team Moscow 12-8 – despite some Spencer Matthews joined Glee actor
Friday’s match against defending “spectacular” goals by Moscow’s Ed Matthew Morrison at the
champions City A.M. Team New York, Hitchman – before retaining the lead Hurlingham Club to listen to a set
where Piki Diaz Alberdi, Mohammed against a determined Buenos Aires from Razorlight’s Johnny Borrell fol-
Al Habtoor and Andrea Vianini (pic- side in Sunday’s final, where Abu lowed by dancing until midnight.

Top: City A.M. Team New York play Gaucho Team


Buenos Aires on Ladies Day on Saturday
Above: City A.M. Team New York collect the runners’
up Camino Real Plate
Right: Glee actor Matthew Morrison

Above: MINT Polo in the


Park ambassador Jodie
Kidd with boyfriend
Andrea Vianini
Left: Made in Chelsea’s Millie
Mackintosh, Hugo Taylor and
Spencer Matthews
CITYA.M. 7 JUNE 2011 News 11

Russia’s Global Ports to


raise $750m in London
fied amount of existing stock as glob- ties,” chairman Nikita Mishin said.


CAPITAL MARKETS
BY ALISON LOCK al depositary receipts. Global Ports says it controls 30 per
Analysts place Global Ports’ value at cent of Russia’s container ports mar-
RUSSIA’S biggest freight terminal about $3bn, so the existing stock sale ket and exports 28 per cent of all fuel
operator aims to list on the London would raise about $650m on top of oil in the former Soviet Union. It is
Stock Exchange to raise up to $750m the new shares. expecting to tap into demand for
Tui’s chief executive Peter Long could see the firm relegated from the FTSE 100 (£456m), it said yesterday. “We hold the number one position emerging markets infrastructure
Global Ports Investments, which in Russian container handling and providers as economies such as Russia

TUI faces FTSE 100 exit


operates terminals in Russia and fuel oil exports and have strong capac- grow rapidly.
Finland, intends to float 25 per cent of ity to accommodate expected market Its parent company, infrastructure
its issued share capital. It will list growth as well as the potential to group N-Trans, has listed two of its
$100m of new shares and an unspeci- expand our current terminal facili- operations in London to date.

TRAVEL ly at 90th position or above, which


BY HARRY BANKS would qualify them for automatic pro-


motion to the blue chip index.
TRAVEL firm TUI Travel may lose its However, for the purposes of balanc-
blue chip status at the quarterly ing the index the nearest FTSE 250
reshuffle of UK indices later this week, constituent will be considered for pro-
according to data from FTSE. motion, which, based on Friday’s clos-
Based on Friday’s closing share ing prices, would see food ingredients
prices, TUI Travel is the only FTSE 100 firm Tate & Lyle gain re-entry to the
stock at 111th position or below in the FTSE 100.
indices and, therefore, the only candi- Tate’s shares have risen steadily
date for potential demotion to the since early March before getting a
FTSE 250 index. strong boost at the end of May when
No FTSE 250 companies are current- its full-year results beat expectations.

@
@
@

MORE NEWS
ONLINE
www.cityam.com
CITYA.M. 7 JUNE 2011 News 13

Spending on FED’S PLOSSER: US STILL NEEDS TO TIGHTEN NEWS | IN BRIEF


Eurozone investor morale dips
Investor confidence in the Eurozone has
collapsed this month, according to the

high street Sentix index released yesterday. The


German-based index fell to 3.5, heavily
down from 10.9 in May. Analysts cited
fears over Greece’s sovereign debts and
inflationary pressures for the decline.

sank in May Producer prices up in euro area


Industrial producer prices spiked by 0.9
per cent in the Eurozone in April, com-
pared to March, Eurostat figures
revealed yesterday. Prices were up 6.7
per cent annualised, slightly slower than
March’s revised annual rate of 6.8 per
RETAIL Last month’s figures were also cent. Across the wider EU area, produc-

BY JULIAN HARRIS knocked by a boost in sales at the end er prices were up 7.8 per cent compared
of May 2010, when warm weather and to April 2010.
HIGH street sales plunged back to the impending World Cup saw shop-
earth last month, as consumers reined pers hit the stores. Spain’s industrial output drops
in their spending. Like-for-like sales over the past three Spanish industrial output fell by 0.3 per
April’s sunny weather and extra months were down 0.4 per cent from cent in April, according to data pub-
bank holidays had seen a bounce-back the same time last year. lished yesterday, after a 1.1 per cent
for the UK’s struggling retail sector, yet On the same measure, which monthly fall in March. The annual rate
sales in May were down 2.1 per cent reduces monthly volatility, like-for-like for April showed a 1.6 per cent decline,
compared to the same time last year, food sales were up 1.9 per cent, yet compared to a 0.4 per cent drop the
on a like-for-like basis. non-food sales fell by two per cent. previous month.
Total sales, which include expan- “It is particularly important for the
sions in shop floor space, were down economy that retail sales show some Trade rising across OECD states
0.3 per cent compared to May 2010, resilience, given that consumers have Imports to G7 and BRICS countries
according to the British Retail been far more prone to cutting back were up by 11 per cent in the first three
Consortium (BRC). on their expenditure on consumer months of the year, compared to an 8.2
“The first half of May was better services than they have cutting back AMERICAN monetary policy could be tightened by the end of the year despite weak jobs per cent rise in the final quarter of 2010,
than the second, when the weather on retail sales,” commented Howard figures from last week, the Federal Reserve’s Charles Plosser said yesterday. “I’m not seeing the Organisation for Economic Co-oper-
turned unseasonably wet and cold in Archer of IHS Global Insight. anything fundamental has changed in my view of the medium term outlook,” the hawk- ation and Development announced yes-
many parts of the country,” comment- “Consumer spending accounts for ish Fed official said. Asked about a further programme of quantitative easing, dubbed terday. Total exports grew by 8.5 per
ed BRC chief Stephen Robertson. 65 per cent of GDP,” Archer added. “QE3”, Plosser said: “The hurdle rate for doing more is very high.” Picture: GETTY cent, up from 8.2 per cent growth.

Survey shows
faster growth
Decline in new car One in five failing to save
anything for retirement
for Canada sales starts to slow

PENSIONS
While many respondents say they
ONE in five workers are not saving any- could save an extra £100 a month, few

CANADIAN ECONOMY UK ECONOMY


Car sales are down 7.3 per cent in thing at all towards their retirement, a are turning their words into action,
CANADA’S economic prospects THE UK’s post-recession decline in car the year to date, yet fleet and busi- survey revealed today. the survey shows.
received a boost yesterday, with a sales may be on the verge of bottom- ness purchases are up 3.8 per cent And nearly half of workers between With an extra £58 per month, savers
widely regarded purchasing man- ing out, according to data released and 5.7 per cent respectively. 30 years-old and state pension age are could make up their savings shortfalls,
agers’ index (PMI) rising to 65.5 in yesterday. “Consumers remain cautious,” failing to save adequately, according to Scottish Widows claimed.
May from 57.8 in April, in seasonally- New car registrations recorded a noted Paul Everitt of SMMT, with pri- the latest Scottish Widows index. “That is roughly the cost of a cup of
adjusted terms. fall for the 11th straight month in vate sales down 18.9 per cent in 2011 “We need a step-change to overcome coffee every day,” added Naismith.
The unadjusted index was 69.1 last May – yet the 1.7 per cent annualised so far, compared to the same period this ingrained inertia and help people People not expecting most of their
month, up from 57.7 in April. drop was the smallest since July of last year. prepare for their retirement,” com- retirement to be funded by a final
Analysts had forecast an unadjust- last year. Distortions in the figures from the mented Scottish Widows’ Ian salary pension are saving nine per cent
ed reading of 58.1 and a seasonally- The market is expected to stabilise car scrappage scheme “have almost Naismith. of their incomes, on average.
adjusted reading of 60. in the third quarter of this year, washed through now,” according to People want £24,300 a year in their Nearly one in ten (nine per cent) of
All readings above the no-change according to the Society of Motor the report. New registrations spiked retirement, on average, in order to live respondents said they will opt out of
mark of 50 indicate growth in the Manufacturers and Traders (SMMT), early in 2010 due to temporary gov- comfortably, and aim to retire just the National Employment Savings
economy. which compiled the figures. ernment incentives in the scheme. short of their 62nd birthdays. Trust (NEST), if automatically enrolled.

 
    
    
  


 
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14 News CITYA.M. 7 JUNE 2011

April ISA sales


High oil price
TOP TEN FTSE STOCKS ON LOAN

HMV Group 19.86%

Yell Group 19.20% hit record high


cuts airline Provident Fin 17.59%


INVESTMENT
Dixons Retail 14.59% FUND platforms have reported their
highest gross ISA sales on record,
Homeserve 10.34%

profit in half
according to the Investment
Management Association (IMA).
Gross ISA sales hit £1.3bn in April
Thomas Cook 10.18% for platforms, ran by financial servic-
es firms such as Hargreaves
Kesa Electricals 9.19% Lansdown and Standard Life.
The tax-efficient products account-
Carpetright 9.05% ed for 39.1 per cent of all sales made
global economy. through the platforms, the highest

TRANSPORT
BY HARRY BANKS “The efficiency gains of the last proportion of total sales on record.
decade and the strengthening global CSR 8.22% “April’s statistics reflect a strong
GLOBAL airlines have cut their 2011 economic environment are balancing 2011 ISA season,” said IMA chief exec-
profit forecast by more than half to the high price of fuel,” IATA’s director Betfair Group 7.34% utive Richard Saunders.
$4bn (£2.4bn) as high oil prices and general, Giovanni Bisignani (pic-
turmoil in Japan, North Africa and tured), told the group’s annual gener-
the Middle East weigh on the indus-
try’s recovery.
The International Air Transport
al meeting in Singapore.
“But with a dismal 0.7 per cent
margin, there is little buffer left
HMV leads the top shorted FTSE Home insurance
Association (IATA), which represents
most global carriers, disclosed the
new forecast yesterday, and also
against further shocks,” he said.
The IATA $4bn profit forecast com-
pares with an $8.6bn forecast on 2
stocks as investors remain bearish costs to rocket
warned of a looming trade war if March, just before the Japan
Europe moves ahead with plans earthquake and tsunami trig-


INSURANCE

to force airlines to join an emis- gered a nuclear meltdown at a CAPITAL MARKETS chain for £53m last month and had
sions trading scheme next year. power station. Since then, the reportedly received the backing of its
China said it would support Arab uprisings have spread and STRUGGLING retailer HMV has failed bankers. But short sellers have not UK insurers are expected to hike
legal action. oil has been well above $100 a to convince short sellers of its recov- been deterred, betting that the firm’s home, motor and catastrophe premi-
Airlines say the scheme, barrel. ery story, despite a string of positive share price will continue to fall. um rates this year as they struggle to
designed to tackle grow- The forecast would developments for the embattled Will Duff Gordon, research direc- improve earnings and capital returns,
ing emissions from mark a drop of more music store chain. tor at DataExplorers said: “Short rating agency Fitch said yesterday.
the aviation indus- than three-quarters The company is the most shorted interest has not diminished in HMV. Firms need to boost earnings as
try, will only from the industry’s stock in the FTSE All Share index, With the percentage of shares out- years of falling rates and ultra-low
increase costs and estimated 2010 profit, with almost 20 per cent of its shares standing on loan having hovered interest rates have eaten into prof-
add to pressures which was raised to out on loan, according to around 20 per cent since early March, itability, made worse by a string of
already caused by around $18bn from DataExplorers. it would be hard for short sellers to natural disasters around the world in
the sluggish $16bn. HMV sold the Waterstone’s book source more of the stock.” the past year.
CITYA.M. 7 JUNE 2011 News 15

NEWS | IN BRIEF
Dotcom tycoon to float Jellybook Chi-X Europe valued at $305m
BATS Global will pay $305m (£186m)
to acquire rival Chi-X Europe, giving its
biggest investors multi-million dollar
TECHNOLOGY had made a handsome return. most of the decision-making for the cash and share windfalls, regulatory fil-

BY STEVE DINNEEN Despite his successes, it has taken Rowland Capital family trust. ings showed yesterday. US stockbroker
Jonathan a long time to emerge The family was worth an estimat- Instinet’s 34 per cent stake in the alter-
JONATHAN Rowland, son of proper- from the long shadow cast by his ed £730m last year, making them native equity trading platform is worth
ty tycoon David Rowland, has father. among the richest people in the $100m while trading firm Getco, with
announced plans to list his David started life as a scrap-metal country. 14 per cent, will hold $40m. Investment
Jellybook investment company on dealer’s son and made his first mil- Jonathan began making his own banks Credit Suisse, BofA Merrill Lynch,
the AIM market. lions at the tender age of just 23 – fortune in his early 20s. Now he Morgan Stanley and UBS will gain $13-
With a rapidly inflating tech earning him the nickname “spot- hopes Jellybook will bring home $24m apiece.
bubble seemingly upon us, and ty”, a nod to his acne. the next instalment.
investors scrambling to get their He became an influential proper- He said: “The rise of social media Terra Firma hires ex-Citi banker
hands on technology stocks, the ty trader and deal-maker, later in the past five years has Private equity firm Terra Firma yester-
timing of the float seems like a no attracting controversy for his tax- been a development of day announced the appointment of ex-
brainer, given Jellybook’s focus on exile status. The decision by the global proportions. Citigroup banker Kamal Tabet as
acquiring businesses in social Tories, to whom he has made sig- “Yet until now managing director and head of investor
media. nificant donations since returning public market relations, just four months after the US
Jonathan has lofty ambitions for from tax exile, to make him their investors have lender took control of Terra Firma’s
the firm, hoping to make it one of treasurer increased his profile even had limited music group EMI. Terra Firma, led by
Europe’s leading social media further. However, he resigned from opportunities to Guy Hands, made the largest known pri-
companies. It plans to raise at least the role before he had even started, invest in this vate investment write-off in a loss of
£3m in new funds in the float and amid intense press scrutiny. He fast-g rowing £1.7bn on EMI earlier this year after its
plans to make one major acquisi- said the decision was based on his sector. lender Citigroup seized ownership.
tion in the 18 months following desire to expand his business “ S o c i a l
the listing. empire. media is help- Expansys falls on profit warning
His track record in the area is The young Jonathan initially ing redefine Wireless and mobile technology group
good. He founded Jellyworks in showed little interest in following global busi- Expansys shares tumbled more than 12
1999, floating it on AIM at 5p a in his father’s footsteps. He left ness and the per cent yesterday after it issued a prof-
share before selling it to Shore school at 16, knowing he was in line way in which it warning for the year to the end of
Capital in 2000 for 29.5p a share. for a vast fortune. After some time people go April. The AIM-listed firm closed at
When the market crashed, so did spent travelling he came back into about their 1.38p yesterday – its lowest level since
Jellyworks, but not before Jonathan the fold, eventually taking over daily lives.” JONATHAN ROWLAND floating in 2007 – after it said a recov-
ery will take longer than expected.

Ipsos presses ahead


with Synovate offer
MEDIA Parks and Diageo, jumped seven Analysts have also linked Publicis

BY STEVE DINNEEN per cent yesterday. to a possible bid for the firm.
Synovate is managed as an Aegis sources yesterday reiterat-
IPSOS has decided to go ahead almost entirely separate entity to ed the approach is at a “very, very”
with its offer for Synovate, the Aegis Media, making it easy to early stage and said a further
market research arm of Aegis, in a hive off and sell. announcement may not come for
deal that could fetch the commu- It is understood any bid would some time.
nications agency £500m. be in the region of £500m, with
Top executives, including co- analysts saying a potential rival ANALYSIS l Aegis
president Didier Truchot, decided bid could push the price even
at a crunch meting in Paris yester- higher. 150 p
day to proceed with a bid for the Billionaire shareholder Vincent 151.00
firm. Bolloré, who owns 26.5 per cent of 6 June
Aegis yesterday confirmed to Aegis in addition to 33 per cent of 140
the market it has received a pre- rival advertising group Havas, has
liminary sounding for Synovate mulled a takeover of Aegis in the
but said there is no guarantee a past.
bid will be forthcoming. He could be tempted to launch a 130
Shares in Aegis, which has con- bit for a slimmed down Aegis
tracts with firms including Disney should it decide to sell Synovate. 7 Apr 25 Mar 14 Apr 10 May 31 May

ANALYST VIEWS: WHAT WOULD A SALE OF SYNOVATE MEAN FOR


AEGIS? Interviews by Steve Dinneen

STEVE LIECHTI | INVESTEC

“ We see Synovate as a decent add-on to existing players rather than a strategically exciting asset, therefore
while an auction might develop, we would not encourage this view. Bigger questions are what Aegis does with any possi-
ble proceeds or whether this stimulates interest in the whole group by third parties, bearing in mind the Bolloré stake.

ALEX DEGROOTE | PANMURE GORDON ”


“ We increase our target price to 190p, from 175p. News of a potential Synovate transaction at £500m is a positive
catalyst. This is materially ahead of our own valuation. There could also be upside pressure to the £500m estimate if
other players are interested. We reiterate our “buy” stance.

LORNA TILBIAN | NUMIS ”


“ ”
We remain firm buyers of Aegis, which has a target price of 174p. It is trading on a 2011 price to earnings ratio of
12.8 times, falling to 11.6 times in 2012, attracted by its recent strong winning streak in the US (which includes Disney
Parks, Home Depot and Diageo) and its high and fast growing exposure to both digital and emerging markets.
16 News CITYA.M. 7 JUNE 2011

Tullow finds oil at wells Drugmakers agree to lower prices on


in Ghana and Uganda vaccine supply for developing countries
in line with expectations. (£2.3bn) funding gap for its commit- that all countries should include

ENERGY


PHARMA
Tullow said after completing the ments up until 2015. rotavirus vaccines in national vaccina-
GLOBAL oil and gas exploration com- operations, the well will be suspend- BY HARRY BANKS GSK said yesterday it would provide tion programs, but many poorer coun-
pany Tullow Oil said yesterday it had ed for potential future use and the rig SEVERAL leading drugmakers are cut- its Rotarix rotavirus vaccine to GAVI at tries struggle to afford them.
made an “encouraging” first step in will move to complete drilling of ting their prices on potentially life-sav- a 67 per cent discount to the current GAVI, which funds bulk-buy vaccina-
drilling after it found oil at the Makore-1, which is targeting reser- ing vaccines for people in developing public price – bringing it to $2.50 per tion programs for nations that can’t
Banda-1 exploration well in the West voirs in the south of the field. countries in an effort to sustain sup- dose, or $5 to fully immunise a child. afford shots at Western prices, has
Cape Three Points (WCTP) licence off- In Uganda the onshore Jobi-East-1 plies via the GAVI international vac- Merck said it will offer its Rotateq committed to help fund rotavirus vac-
shore Ghana. and Mpyo-3 wells in exploration area cine alliance. rotavirus shot at $5 a dose initially. cine introduction in at least 40 of the
The company said the WCTP well 1 have also both successfully found The price cuts, offered by both Diarrhoea is one of the top two world’s poorest countries by 2015.
has encountered Ceonmanian tur- oil, in line with expectations, and generic and branded drugmakers killers of children under five world- But the alliance is facing a shortfall
bidites over a gross vertical interval of with an accelerated drilling cam- including GlaxoSmithKline, Merck, wide and rotavirus is the leading cause of $3.7bn to fund its projects through
300m containing over 100m of low paign planned for the second half of Johnson & Johnson’s Crucell and in the young, killing more than to 2015, and has been seeking extra
porosity sandstone and 3m of approx- 2011 to assess the full extent of the Sanofi-Aventis’ Sanofi Pasteur, should 500,000 children a year. donor money and price cuts from
imately 40 degree API oil pay, broadly new oil accumulation. help the alliance narrow a $3.7bn In 2009, the WHO recommended drug firms to close that gap.

Statoil to sell NEWS | IN BRIEF


OPEC oil increase may be small
Saudi Arabia and its Gulf Arab allies
may struggle to push through more

£2bn stake in than a cosmetic increase in oil supplies


at a meeting of the OPEC cartel this
week. Worried that crude prices are
undermining economic growth, produc-
ers including Kuwait and the United
Arab Emirates, favour an increase in

gas pipeline output when the Organisation of the


Petroleum Exporting Countries (OPEC)
meets tomorrow. But delegates gather-
ing in Vienna say that a deal to do more
than close the gap between OPEC’s out-
of-date official production target and
actual supplies could prove difficult.

ENERGY
BY HARRY BANKS
Investment Board and 30 per cent by Cluff Gold drops on strike news
Allianz Capital Partners, a subsidiary Daimler and Rolls have secured 60 per cent of Tognum, run by Volker Heuer Picture: PA Shares in West Africa-focused gold
NORWEGIAN energy giant Statoil has of Europe’s biggest insurer Allianz. miner Cluff Gold fell yesterday after the

Daimler and Rolls-Royce


agreed to sell a 24.1 per cent stake in a The remaining 25 per cent is held by group confirmed an illegal labour dis-
key European natural gas transport Infinity Investments, a subsidiary of pute at its Kalsaka mine in Burkina Faso.
venture to a group including German the Abu Dhabi Investment Authority. The miner says it is still in talks with its
insurer Allianz and the Abu Dhabi The deal still needs approval from employees over 2011 pay increases,

secure control of Tognum


Investment Authority for 17.35bn Norwegian authorities. adding the disruptions had not material-
crowns (£2bn). “This transaction contributes to a ly impacted the mine's performance in
Statoil will retain a five per cent further streamlining of Statoil’s port- 2011. The company is maintaining its
stake in Gassled, the owner of gas folio,” said Eldar Saetre, Statoil’s execu- annual production guidance of 70,000
pipelines on the Norwegian shelf, tive vice president. ounces for the year.
which last year piped about 100bn Carnegie analyst John Olaisen said
cubic metres of gas to Britain, the move was “positive” for the compa- (£23.20) a share, raising it from an ini- Churchill completes placing

AUTOMOTIVE
Germany, Belgium and France. ny, and the price was in line with what tial €24 a share bid and valuing the Embattled AIM-listed miner Churchill
That amounts to some 16 to 17 per ExxonMobil received a year ago. DAIMLER and Rolls-Royce have diesel and gas engine maker at Mining has completed the private place-
cent of European Union annual gas secured a 60 per cent stake in engine €3.4bn. ment of 19.3m ordinary shares to
consumption and is second in size ANALYSIS l Statoil maker Tognum with a sweetened They hope to tap into a global mar- Rachmat Gobel and Fara Luwia, raising
only to Russian imports. €
takeover bid, expanding their pres- ket worth more than €30bn a year £7.7m. The 40p placing price represent-
Last year ExxonMobil sold its eight 160 135.60 ence in higher margin industrial that is growing at above average rates. ed a 60 per cent premium to the 20-
per cent Gassled stake to an infrastruc- 6 June diesel engines. But to gain access to intellectual day volume weighted average share
ture fund, as oil firms shed non-core 150
But the bidding consortium fell property in the form of patents, and price as of 28 April – the day before the
assets and allow financial investors to short of its initial goal, which was to to enable a profit transfer agreement, subscription agreement. The shares rep-
tap into the steady margins of the win full control of Tognum, a manu- bidders for German companies need resent approximately 16 per cent of the
European energy infrastructure busi- 140 facturer of military and ship engines to have control of at least 75 per cent. enlarged share capital. The firm will use
ness. once owed by Daimler. Daimler and Rolls said yesterday the proceeds for further work on the
The buyer of Statoil’s stake is Solveig Last month German car and truck that winning majority control laid a East Kutai Coal Project, where it has
130
Gas Norway, a holding 45 per cent maker Daimler and the UK’s Rolls strong foundation for future co-oper- been beset by licencing disputes with
owned by Canada Pension Plan 1 Apr 1 May 1 Jun were forced to raise their offer to €26 ation between the three companies. the Indonesian government.

Shares in OMV’s $1.3bn debt-cutting SeaEnergy offloads wind


rights issue likely to be fully subscribed farm development unit
mum set at €33. Barclays Capital, Deutsche Bank, JP the repayment of some £3.2m in other

ENERGY

ENERGY
BY HARRY BANKS OMV stock closed at €27.68 yester- Morgan and UniCredit are acting as loans owed by SERL.
day, meaning the issue would raise joint global coordinators and BRITAIN’S SeaEnergy has finally SeaEnergy said it will use some of
AUSTRIAN oil group OMV has had nearly €756m. bookrunners. agreed a deal to sell its loss-making the net proceeds of £29.1m from the
orders for all the shares on offer in its OMV’s shares have fallen around The Austrian group announced last business developing wind farms to deal to develop its marine business
rights issue of up to $1.3bn (£1.2bn), 6.5 per cent since close of trading on week that an exploratory well that it Spanish firm Repsol, enabling it to providing vessels for constructing and
two sources said yesterday. the day the refinancing plan, which is drilling in the Kurdish part of Iraq focus on providing services for the off- servicing offshore wind turbines.
The issue of up to 27.3m new also included a launch of hybrid has found oil. shore wind sector. Repsol has formed a consortium
shares, on a subscription ratio of one notes, was announced. “It seems good quality oil and it The company, which put SeaEnergy with EDP Renovaveis to develop two of
for every 11 held, was part of OMV’s OMV’s two biggest shareholders – was flowing to surface following a Renewables on the block a year ago, SERL’s projects.
efforts to cut debt after two major Abu Dhabi’s International Petroleum drawdown test. We are now going to will receive a cash consideration of In April, Repsol said that offshore
acquisitions. Investment and Austrian state hold- continue drilling but I am confident £30.7m from Repsol for its 80.13 per wind farm construction costs in
The capital increase of around nine ing company OIAG – had said they that the final results will be promis- cent in SERL. Britain need to drop by around 30 per
per cent will be priced at yesterday’s would buy in to the capital increase. ing,” OMV exploration and produc- Repsol will also repay £8.1m of debt cent over the next decade if the sector
market closing price, with a maxi- Bank of America Merrill Lynch, tion head Jaap Huijskes said. owed to SeaEnergy by SERL and fund is to develop.
CITYA.M. 7 JUNE 2011 News 17

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

Ingenious ing from ICAP Equities, where he is chief EACA ated position of chief operating offi-
The financial services group has promoted Neil operating officer for Europe and Asia. The executive board of the European cer for Australia and New Zealand,
Forster from group finance director to the Association of Communications based in Sydney. Prior to joining the
group’s chief operating officer. Prior to joining GHC Capital Markets Agencies has nominated Moray company, Jennings was managing
Ingenious in 2008, Forster was group finance The investment management specialist MacLennan, chief executive worldwide director for AXA’s Elevate platform.
director at Hat Trick Productions and held sen- has appointed David Rowley as of M&C Saatchi, as president elect of
ior finance roles in Walt Disney’s European tele- Northern regional relationship manager. the body. He will succeed current presi- Berwin Leighton Paisner
vision business. Forster remains a non-executive Rowley will promote GHC’s services to dent Olivier Fleurot, chief executive of The law firm has appointed the for-
director of Hat Trick Productions and sits on the Independent Financial Advisors based MS&L Group, for a two-year term from mer chairman of the Office of Rail
Institute of Chartered Accountants’ Special in the North of England. 15 September at the annual general Regulation, Chris Bolt, as a consult-
Interest Group for Media and Entertainment. assembly of the EACA in Brussels. ant to work with Berwin Leighton
Bluefin Corporate Consulting Paisner’s Competition, EU and Trade
The financial advisory firm has appoint- FNZ Group. Bolt will step down from his
Evolution Securities responsible for research and sales. ed Alex Bennett as a health and risk con- The provider of integrated wealth current position as public private
The investment bank has appointed Johnson is expected to be appointed to sultant. Bennett joins from Moving management platforms has appoint- partnership arbiter for the London
Patric Johnson as head of distribution, the board of Evolution Securities on join- Minds, where he was chief executive. ed Martin Jennings to the newly cre- Underground this month.

To appear in CITYMOVES please email your career


SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7092 0053
updates and pictures to citymoves@cityam.com morganmckinley.com

BEST OF THE BROKERS To appear in Best of the Brokers email your research to notes@cityam.com

ANALYSIS l Halfords ANALYSIS l IMI ANALYSIS l Wincor Nixdorf


410 405.00 1,100
1,038.00 62.50
p 6 Jun p 6 Jun €

390 57.50 49.23


1,000 6 Jun
370 52.50

350 900
47.50

1 Mar 1 Apr 1 May 1 Jun 1 Mar 1 Apr 1 May 1 Jun 1 Mar 1 Apr 1 May 1 Jun

Halfords IMI Wincor Nixdorf


UBS expects the car and bike retailer to post full year profits in line with Citigroup rates the group as its top pick in the UK engineers, and sees it as Goldman Sachs is bullish on the retail banking technology provider, after a
expectations when it reports its results to the market next week. Halfords an attractive multi-year investment driven by accelerated growth and mar- poor performance by the German company. It rates the firm Conviction
has struggled amid tough trading conditions for retailers. UBS said good gin expansion. The broker expects margin targets to be achieved by the end Buy, as it believes the risk-reward balance in investing in the company to be
weather over Easter will have helped the retailer’s sales, but also expects of 2013 and sees further upside potential, so raises its target price to positive after a weaker than expected March quarter. Goldman said strong
Halfords to put out a “cautious outlook statement” for the year ahead. The £13.50 based on an enterprise-value-to-sales of 1.9x12E in line with its cashflow generation at the company will enable it to consistently return
broker gives the retail chain a price target of 380p per share. 19 per cent margin expectation in 2012. capital to shareholders. Its target price for shares of the company is €73.

Commodities lift FTSE and Wall Street drops


offset weak banks and travel on poor US data
started coverage with a “buy” rating industry profits of $4bn (£2.4bn) in Oil fell in choppy trading on

THELONDON and a 650 pence price target.


The broker said the company’s
2011, down from a previous $8.6bn
estimate. THENEW YORK increased expectations OPEC will
boost production targets this week as

REPORT REPORT
growing producing base and success- US blue chips were down 0.1 per concerns about high prices curbing
ful trading business made Glencore cent by London’s close, with the oil demand lingered.
different to the diversified miners broader S&P 500 index losing 0.3 per “There has been concern that the
with which it is often compared. cent and heading into a technical driving season has peaked already as

S T
TRENGTH in commodity stocks Integrated oils also lent strength, danger zone, commentators said. HE S&P 500 extended its slide a result of the slowing economy, and
helped Britain’s leading share led by BG Group ahead 0.7 per cent. Technical analysis of the FTSE 100 to a fourth day yesterday, hit- that puts pressure on the refined
index edge higher yesterday, Banks, however, stayed gloomy. index was cautious. ting its lowest level since March products and concurrently on the
offsetting weakness in banks Part-nationalised Lloyds Banking “Overall bias remains skewed to 18, as a spate of recent weak US crude products,” said Hellwig.
and travel stocks, as some of the Group the biggest blue chip faller, the downside, although this week data lent support to a bearish out- US stocks have been battered over
recent gloom lifted in the absence of was down 3.8 per cent to its lowest in there can be some rebound as the look for the economy. the past five weeks on a number of
further glum data. more than a year. index is testing an important support Sectors most closely associated disappointing reports, culminating
The FTSE 100 closed up 8.15 points, Investment banks are finalising level at 5,804, being the 50 per cent with economic fortunes took the in Friday’s US employment report,
or 0.1 per cent, at 5,863.16 points, sale documents that will start the bid- retracement from the 10 December - biggest beating, with shares of Bank which showed employers added a
adding to Friday’s 0.1 per cent gain ding process for the sale of £4.4bn 11 January impulse wave and also the of America off 4 per cent to $10.83, meager 54,000 jobs last month and
after a poor US jobs report was seen worth of assets by Lloyds and fully- level of the 200-day moving average,” the stock’s lowest close since May the unemployment rate rose to 9.1
as priced-in. nationalised peer Northern Rock, RBS said in a note. 2009. per cent.
“There’s been no new depressants, according to reports. Meanwhile European shares on As stocks have continued to fall, With the second-quarter earnings
so oversold commodity have come up Travel stocks lost out as Goldman concerns the pace of growth in the buying support has dried up, sending season more than a month away, the
for air and given the market a lift,” Sachs cut its rating for the UK sector global economy could be slowing and the S&P 500 through a series of tech- market focused on the uncertain eco-
said Mic Mills, head of electronic trad- to “underweight” from “overweight”, with traders cautious on expectations nical support levels. nomic outlook.
ing at ETX Capital. part of a number of changes in a the ECB may signal a July rate rise. “The concern there deals with the The Dow Jones industrial average
“But how long this respite will last European strategy review. The FTSEurofirst 300 fell 0.6 per cent weakening job market, capital dropped 61.15 points, or 0.50 per cent,
is the real question, with nothing “Reflecting downgrades in our to 1,104.97, an 11-week closing low. requirements, quality of assets – par- to 12,090.11. The Standard & Poor’s
seen to change the overall cautious global growth expectations we are ticularly with the double-dip in hous- 500 Index fell 13.99 points, or 1.08 per
picture for the global economy at becoming more selective on our cycli- ANALYSIS l FTSE 100 ing and flattening yield curve. All cent, to 1,286.17. The Nasdaq
present,” Mills added. cal exposure,” Goldman said. 5,863.16 those things are working against Composite Index lost 30.22 points, or
6,100 6 June
Strength in miners was the main Cruises firm Carnival shed 0.8 per financials and set a weaker tone for 1.11 per cent, to 2,702.56.
prop for blue chip gains as the price cent, while tour operator TUI Travel the market as a whole,” said Bucky In a sign a slowing economy could
of copper and other metals rose, sup- lost 1.1 per cent, adding to the possi- 5,900 Hellwig, senior vice president at BB&T hurt earnings, JP Morgan cut its rat-
ported by a weak dollar on expecta- bility that it could be demoted from Wealth Management in Birmingham, ing on home improvement chain
tions the Federal Reserve will the FTSE 100 index when the quarter- Alabama. Lowes Cos, citing softening home
continue to supply liquidity to the ly reshuffle is announced tomorrow. 5,700 Energy shares were also among the prices and stagnant job growth. The
market. And IAG dropped 3.0 per cent as hardest-hit sectors, with the PHLX oil shares fell 2.3 per cent to $22.87.
Recently-listed commodities trader industry body IATA, whose airlines service sector index off 3.2 per cent. Apple dipped 1.6 per cent to
Glencore was the top blue chip gain- claim to carry 93 per cent of global 7 Mar 25 Mar 14 Apr 10 May 31 May
Chevron dropped 1.3 per cent to $9.68 $338.04 after Chief Executive Steve
er, up 2.0 per cent, as Deutsche Bank passenger traffic, said it expects as the biggest drag on the Dow. Jobs appeared at a product launch.
18

Business Features Structured Finance |

A SECURITISATION
COMEBACK GATHERS From Prussia
PACE IN EUROPE
ANDREW SOUTH with love: an
undercover
HEAD OF RESEARCH, EUROPEAN STRUCTURED FINANCE,
STANDARD & POOR’S RATINGS SERVICES

D
URING the global financial crisis, Europe’s securitisation market
effectively shut down. But since January there has been a flur-
ry of new issuance, across an ever-widening array of asset class-
es, some of which had been dormant for years.
While the early stages of recovery in 2010 were marked by a nar-
row focus on transactions backed by German auto loans, and Dutch
or prime UK mortgages, 2011 has seen the return of deals backed by
UK credit cards, Italian mortgages, French, Dutch, and Spanish auto
financing, and even commercial real estate.
So, is it back to business as usual, or has the market fundamental-
bond market
ly changed? After all, many commentators count US securitisation
among the causes of the financial crisis. The widespread re-pricing of
Though the majority of EU countries were
risk across financial markets since 2007 means newly-issued senior
securities now pay a spread of about 100-150 basis points, com- slow to join in the rush, covered bond
pared with under 10 basis points at the height of the boom.
Credit enhancement – a measure of the underlying collateral loss- issuance has spiked, writes Craig Drake
es a securitisation bond can withstand before suffering a loss itself –
is now generally higher. Also underway are numerous regulatory and

T
central bank initiatives to heighten transparency and the quality of HE demand for covered bonds investor has no recourse to the issu-
information provision to investors. has been on a steady rise for ing bank, the loans backing covered
These measures should all help further strengthen a market the last decade. It’s a trend bonds remain on a bank’s books and
whose credit performance has in any case mostly proved resilient driven both by institutional are ring-fenced, protecting bond-
through the downturn. For example, the credit quality of securities investors looking to their perceived holders even in the event of bank-
backed by prime UK residential mortgages has held up well, despite safety compared to traditional ruptcy. The measures provide
a 25 per cent peak-to-trough house price decline and unemployment forms of securitisation and their use investors with two layers of protec- European Central Bank report on
remaining elevated since mid-2009. No such securities that Standard as collateral in the shoring up of tion. In the first instance, investors recent developments in securitisa-
& Poor’s rated “AAA” have defaulted to date. As another example, Eurozone credit operations. have recourse to the underlying tion, shows the significant rise in
since mid-2007 the default rate on over €1 trillion in original Covered bonds are typically seen assets (mainly composed of good covered bond funding over the last
European securitisation issuance backed by loans to consumers has as especially safe instruments due to quality instruments which offer a 10 years. Given its early start,
been only 0.06 per cent. a double layer of protection, com- significant level of over-collateralisa- Germany has traditionally been the
While the broadening basis of the market’s renaissance is encour- bined with the fact that in the tion.) In the second instance, biggest issuer of covered bonds.
aging, it may be a little early to call a full-blown recovery. Investor- majority of European jurisdictions, investors have recourse to the other With German contributions
placed issuance in 2011 looks set to be modestly higher than last investors in covered bonds are pro- un-secured assets of the issuing removed, the rise in issuances is
year’s volume of €75bn, but a long way short of the €500bn peak in tected by specific covered bond regu- bank. especially notable.
2006. lation and supervision. The rise in demand for covered
However, securitisation has now been tested and proven an effec- Unlike the securitisation process RISE IN EUROPEAN BOND ISSUANCE bonds was in large part driven by
tive complementary funding technique for many financial institu- that passes ownership of pooled The first covered bonds – pfand- the fall of the 2008 liquidity
tions. Even many sceptics concede that the principles of mortgages to investors where the briefe – were issued by Frederick the crisis. According to institutional
securitisation – if properly regulated – remain sound, and that credit Great in 1769 after the Prussian war. research from Dealogic, before
performance has mostly been resilient. As the economic recovery ANALYSIS l European covered bonds These were followed by realkredito- the crash, securitisation made up 30
continues, and as lending institutions slowly wean themselves off 300 self-funded covered bond issues 45 bligationer out of Denmark after per cent of bond issuance by EU
official sector support, securitisation’s comeback will likely strength- (EUR billions; left- hand scale) 40 the fire of Copenhagen. Other banks, compared with 23 per cent
250
en further. covered bond issues 35 European countries such as France, of covered bonds. In 2010, securitisa-
In the EU analytic services are provided by Standard & Poor’s Ratings 200 (EUR billions; left- hand scale) 30 with the credit foncier, and Spain, tion accounted for 8 per cent,
Services legal entities and are the result of separate activities to preserve the Source: Dealogic 25 with the cedulas hipotecarias, fol- while covered bonds made up 32
150
independence and objectivity of ratings opinions. 20 lowed in the late 20th century. per cent.
100 10 However, a number of countries had According to the report: “The evi-
10 no issuances before 2007. The emer- dence of market-based demand sug-
50
5 gence of structured covered bonds gests that transparency, simple and
0 0 in the UK did not happen until 2003. tested structures as well as low col-
2000 2002 2004 2006 2008 2010 The graph, left, taken from a lateral risk are key factors for

The Two Stooges?


If you’re not getting data, analysis and SUPPORT,
you’re not getting the whole routine.
The credit-related analyses, including ratings, of Standard & Poor's and its affiliates are statements of opinion as of the date they are expressed and not statements of fact or
recommendations to purchase, hold, or sell any securities or to make any investment decisions. Ratings, credit-related analyses, data, models, software and output therefrom should
not be relied on when making any investment decision. Standard & Poor's opinions and analyses do not address the suitability of any security. Standard & Poor's does not act as a
fiduciary or an investment advisor.
© 2011 Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. STANDARD & POOR’S and ABSXCHANGE are trademarks of
Standard & Poor’s Financial Services, LLC
19

“We believe
for many
Future of UK
Spanish covered bond
banks, the
picture is a
regulations
challenging ARLIER in the year, HM Treasury and the
one.”
E FSA published a joint consultation paper
reviewing the UK’s regulatory framework
for covered bonds.
The consultation paper proposed new meas-
ures which aim to provide greater transparency
for investors and to increase the visibility of regu-
lation. The paper proposed new measures relating
to regulatory reporting, segregating asset types,
asset eligibility, fixed minimum over-collateralisa-
tion, an asset pool monitor and investor reporting
which may affect the make-up of the current UK
covered bond structure (see below).
The consultation will close on 1 July 2011.

investors. This is an indication that The name’s Bond, begun to attract the interest of regu-
investors have learnt some lessons covered Bond lators. Although most of the coun-
from the crisis and are now scrutin- tries do already have certain limits
ising products more carefully, pre- in place for the issuance of covered
ferring simple and transparent bonds, these have been known to be
structures.” exceeded by the usual Eurozone sus-
pects.
SOLVING BANK FUNDING ISSUES In theory, Greek covered assets are
Unfortunately, not quite. Though not supposed to be greater than 20
you may have been reading the pre- per cent of total bank assets. In prac-
vious five paragraphs enthralled tice, Greece has more than €12bn of
with the concept of covered bonds retained covered bonds.
saving the financial world, unfortu- According to UBS analysis, the sit-
nately there is a bit of a roadblock. uation in Spain is much more wor- Source: Barclays Capital
As with most things with “finance” rying. Figures provided by la Caixa
and “Europe” mentioned in the showed that it had €37bn of covered
same breath, these problems revolve bonds outstanding and the capacity
around the debt-burdened periph- to issue €22bn more. According to
ery Eurozone countries and the the report, if these figures are typi-
threat of downgrade by the debt-rat- cal of the levels of covered bonds
ings agencies. outstanding then “we believe for
Every covered bond issued subor- many Spanish banks, the picture is a
dinates further the claims of senior challenging one.”
and subordinate debt holders, leav- For the banks with a high level of
ing fewer assets available to settle asset encumbrance, the prospect of
their claims in the event of a bank further regulation may be a mere
failure. This asset encumbrance has quantum of solace.

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20

Wealth Management | Contracts for Difference

ANALYSIS l Leverage increases returns – and losses dfdf


16.00%
% Return - No Leverage 120.00%
% Return - 7 Times Leverage
14.00%
100.00%
12.00%
10.00% 80.00%

8.00% 60.00%
Return

Return
6.00%
40.00%
4.00%
2.00% 20.00%

0.00% 0.00%
-2.00% Source: Source:
learncfds.com -20.00% learncfds.com
-4.00%
-6.00% -40.00%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49

System Trades System Trades

TRADE
WALL ST.
Five ways you
1 POINT
SPREAD can keep your
trades in gear
Leverage is a useful tool for the contracts
for difference trader but make sure you
are balancing your risks, says Philip Salter

B
EING able to leverage your posi- experts, are five tips on leverage to
tion opens up the possibility for bear in mind when you are trading:
greater trading profits. Of

1.
course, on the flip side, being
leveraged exposes you to losing more
than your initial stake. However, help DON’T GO OVERBOARD
is at hand. If you follow some strict David Jones of IG Markets says one obvi-
rules you can avoid blowing yourself ous tip would be not to use leverage
straight up – giving you time to get on excessively. If, for example, you have
top of your trading game. £10,000 in your account, he cautions
Simon Brown of ProSpreads explains against using it to do just one large six
Trade today at that, on average, contracts for differ- figure trade. It is vital that you are
ence (CFD) providers ask for an initial aware how much risk you are exposed
www.cityindex.co.uk/value-indices margin of only 15 per cent if you want to. Malcolm Pryor of www.spreadbet-
to trade UK blue chip equities: “This tingcentral.co.uk explains: “The risk on
means that to have exposure to the trade is the difference between the
£10,000 worth of a particular share entry point and the stop expressed in
you only have to lodge £1,500 which money terms – how much you would
1 Point Spreads available during market hours on rolling and daily future spread equates to seven times leverage lose if your stop is hit.” He says “that
bets and CFDs (excluding futures). (10,000/1,500).” Brown says this frees amount needs to be a percentage of
up £8,500 to invest, utilise or deposit speculative funds that is appropriate for
elsewhere, but he warns “should your the objectives and risk preferences of
Spread betting and CFD trading can result in losses that exceed your initial deposit. position move against you, you will be the trader.”
required to deposit more money (‘vari-

2.
ation margin’) to reflect or cover the
loss that has been created by the
adverse movement of the share price.” KNOW WHEN TO STOP
Here, courtesy of the trading Without the right money manage-
21

THE TIPSTER Sterling has taken a bashing against


the euro in the last week – mostly down
news on contract wins and the possible
effects of NHS cuts. Technically, the price
to euro strength – but it seems to have looks attractive, as it closed above the
SILVER LOOKS found support just above €1.1200. The 875p resistance and is pulling clear of
Bank of England announces its rate deci- the 100-day moving average. Good news
STUCK IN ITS sion on Thursday and, with no rate hike could see it on its way back over 900p
RUT FOR NOW expected for a while, the support area
might be tested. Capital CFDs quotes
before long. Spread Co offers a spread
on Synergy Health of 877.3p-880.6p.
€1.1230-€1.1233 for sterling-euro. Pall Corp, a global leader in water
News that the advertising firm Aegis purification, reports its third quarter

A
FTER a dramatic fall, the silver is set to sell its research arm has seen earnings tomorrow. After topping out
price has been recovering. The significant buying of the company’s just under $60, Pall has been grinding
price held up at $32.30 per ounce stock, but the prospect of other bidders lower to close the gap to $50 from 28
and moved back upward. However, emerging has the potential to give the January. With the 200-day moving aver-
we now seem to be stuck in a range rally some meaningful legs. Current IG age also at $50 and positive results
between the 50 and 100-day moving Markets price on Aegis is 151.2p-151.4p. expected, a dip towards $50 should be
averages. Economic fears will continue to Synergy Health reports full-year used to buy. Spread Co offers a spread
see precious metals in focus. Alpari UK is results today. Profits should be in the on Pall Corp of $53.19-$53.30.
currently quoting silver at $36.80-$36.83. region of £38m, but traders will look for Marc Sidwell

ment, a couple of bad trades can


wipe out lots of small gains – this
could lead to serious losses, as it
isn’t necessarily how often you
get it right, but on aggregate
how much money you win
and lose that is key.
Malcolm Pryor of
www.spreadbettingcen-
tral.co.uk says the best
way to manage risk is
“to ensure before
entering a trade that
the exit point, if the
trade doesn’t work, is
pre-planned, and the
stop order to exit
should be placed at the
same time as the trade.”
Brown says: “Over-leveraged trad- punt on one market going in your
ing positions often result in being favour.”
stopped out too early and too often.”

4.
He explains: “If you have £1,500 to risk
in a trade, but utilise all of it with
seven times leverage then you will KEEP PERSPECTIVE
have to stop yourself out if the posi- Not putting all your eggs in one basket
tion moves 15 per cent or earlier, means not only managing the risks
because you actually have exposure to attached to your individual trades, but
£10,000 worth of stock, with only also managing the risk of your overall
£1,500 available to risk.” He adds: “If position. Pryor says the total risk of all
you were trading a CFD on a foreign trades is best managed using the con-
exchange (FX) product, you may only cept of “portfolio heat”: “Portfolio
be required to deposit 1 per cent mar- heat is the amount you would be
gin, which equals 100 times leverage.” worse off if every open trade immedi-
As such, “if you deposit as margin all ately hit its stop. If individual risk on
the money you wish to risk, then you every trade is managed properly and
will be stopping yourself out if the FX portfolio heat is managed properly
pair moves just 1 per cent against you, then managing leverage becomes rela-
which, depending on your trading tively straightforward.”
style, or indeed trading psychology,

5.
may well be too soon.”

KEEP WITHIN YOUR COMFORT ZONE


3. DIVERSIFY YOUR PORTFOLIO
Although Warren Buffett has gone on
Jones says that “if the level of leverage
you are using on a trade makes you
uncomfortable then cut back.” With
the record opining that: “Wide diversi- IG Markets, you can trade mini con-
fication is only required when tracts, so if you find yourself chewing
investors do not understand what they your nails and worrying about what
are doing,” the oracle of Omaha’s effect the movement of one point
Berkshire Hathaway is invested in 34 against you is having on your profit
companies. Jones advises traders to and loss then cut back the size of the
use leverage “to give yourself the abili- trade. Jones says: “It is difficult
ty to spread your risk across several enough to get market direction right
open positions – so your trades are without getting stressed by every *Investment Trends 2010 UK Spread Betting/CFD Report. Apple, the Apple logo, iPod, iPod touch, and iTunes are trademarks of Apple Inc., registered in
diversified and not an all-or-nothing small move in the market.” the U.S. and other countries. iPhone is a trademark of Apple Inc. App Store is a service mark of Apple Inc.
22 Wealth Management | Contracts for Difference CITYA.M. 7 JUNE 2011

GLOOMY JUNE
DATA NOT ALL There could be baa-bad
DUE TO JAPAN
DAVID MORRISON
CFD MARKET STRATEGIST, GFT
news for retailers afoot
Traders should look
W
ELL, that was a poor start to the new
month. Last week saw the release of a
stack of economic numbers from around to go short when
the globe, the majority of which were sig-
nificantly weaker than expected. The US data were the woolly jumper
particularly disappointing as the Chicago PMI, con-
sumer confidence, S&P/Case Shiller house price
index, vehicle sales, ADP employment,
season draws near,
manufacturing PMI and factory orders all undershot
analysts’ estimates. Friday’s non-manufacturing PMI
says Donata Huggins
bucked the negative trend, but this slight uptick in

D
services did little to assuage concerns. Investors E-BLEAT-ING sheep numbers across
were too busy reeling from the disastrous non-farm the globe could have traders
payroll number which was released earlier in the day. flocking into short positions on
The disruption to global supply chains caused by retail stocks later this year. Wool hit
the Japanese earthquake and tsunami is taking a 23-year high last week. Clothing retailers
much of the blame for the weaker data, especially were decrying the increase yesterday, spec-
anything related to manufacturing. But while the ulating on how long they can absorb the
effects of the disaster were devastating on so many cost. The UK managing director of Hugo
levels (and let’s not forget that the Fukushima Boss Bernd Hake said that they would be
nuclear facility is still unsecured), there was already forced to increase prices if the soft com-
plenty of evidence to indicate that the pace of glob- modity remains so high. With little chance
al growth was slowing. China’s efforts to curb infla- that farmers can replenish their flocks for
tion and dampen speculation through monetary another few years, traders can expect retail-
tightening have led to concerns that demand from ers to pass on the cost to shoppers before
the Asian Pacific region could fall sharply as the the end of the year.
pace of growth moderates. Meanwhile, Europe’s Stephen Oldfield, agri-food leader at
debt crisis is in a more critical state than ever, with PwC, says he can’t see how retailers will be
its political leaders apparently crippled by indeci- able to reach the end of the year without
sion. On top of this, the US Federal Reserve’s cur- passing on the wool cost: “The high street is
rent asset purchase programme (QE2) concludes hugely competitive at the moment.
this month, which will remove a huge slug of liquidi- Retailers are pushing back on suppliers and
ty from financial markets. suppliers are pushing back at retailers.
One feature of QE has been how bond yields Ultimately I can’t see how consumers
(interest rates) have risen when QE is implemented, won’t be left with the bill.”
yet fall when QE is absent, or about to be with- Hake suggested that prices could Baa-baa-in-the-black sheep Picture: REX
drawn. This happened last year, and is occurring increase by 10 per cent, adding up to £300
again right now. As we approach the conclusion of to the final bill of a top quality bespoke ANALYSIS l Non-food sales, change year-on-year ANALYSIS l Australian Wool Exchange spot price
QE2, the yields on 10-year US Treasuries have fallen suit. It’s not just the wool price that is
30 20
sharply, trading below 3% last week. As the Fed threatening the return of the shiny suit. % Change Source: ft.com
Source: KPMG-BRC US$/kg
will no longer be a buyer of Treasuries, this seems The British Retail Consortium’s May Sales
counterintuitive. Perhaps bond investors are quite Monitor said consumers’ reluctance to 25
15
reasonably predicting that without QE the economy spend is now clear to see (see graph, right).
will weaken and so require lower rates. But a flat- Against a backdrop of rising fuel prices and 20
tening yield curve hurts the financial sector and inflation, they explained, the increase in 10
banking stocks have pulled back sharply ever since the wool price is harder for retailers to 15
yields began falling three months ago. bear. 5
Unfortunately, it now looks as if the broader equity When will we see this nasty collision of 10
market is following them down. weak consumer demand and rising prices?
Colin Ellis, chief economist at the BVCA,
says he thinks retailers will be hard pressed Jan 2010 Jul 2010 Jan 2011 1980 1990 2000 2011
to stomach the increase until next year
when household income increases: “It’s low-end retailers like BHS and Primark will David Jones, chief market strategist at IG
going to be really difficult for clothes retail- be hit hardest, since they will lose their Index, suggested traders should be looking
ers in the short term. Many are getting unique selling point, while higher end to go short towards the end of the summer
close to the wall already and will have no retailers have more ability to absorb the when retailers gear up for the woolly
choice but to pass the cost on.” He believes cost. jumper season.

SPREAD BETS | CFDs | FOREX


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CITYA.M. 7 JUNE 2011 Wealth Management | Markets 23

FTSE 100 FTSE 250 FTSE ALLSHARE DOW NASDAQ S&P 500 / 1.1210 0.0013 /$ 1.4585 0.0051
5863.16 11996.93 3062.74 12089.96 2702.56 1286.17 /$ 1.6347 0.0072 /£ 0.8920 0.0011
8.15 24.27 4.16 -61.30 -30.22 -13.99 /¥ 130.98 0.8694 /¥ 116.82 0.6600
Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low Price Chg High Low
GILTS Yule Catto & Co . . . . .224.1 4.7 240.5 112.7 Brewin Dolphin Ho . .160.0 -2.4 185.4 114.0 Rexam . . . . . . . . . . . .391.3 1.3 400.0 290.4 Amlin . . . . . . . . . . . . .422.1 -2.4 433.0 369.3 Centamin Egypt Lt . .124.0 1.6 197.1 115.8 Hammerson . . . . . . . .480.9 1.9 486.3 336.3 JD Wetherspoon . . . .437.1 -1.3 468.3 386.5
CONSTRUCTION & MATERIALS Camellia . . . . . . . . .10400.0 225.010700.0 7410.0 RPC Group . . . . . . . .345.0 -10.0 361.1 192.3 Beazley . . . . . . . . . . . .129.6 -0.4 139.2 109.1 Eurasian Natural . . .818.5 3.5 1125.0 806.5 Hansteen Holdings . . .85.8 -0.3 89.3 59.4 Ladbrokes . . . . . . . . .147.8 1.3 152.2 122.7
Tsy 2.500 11 . . . . .307.71 0.00 310.0 307.7 Charles Taylor Co . . .137.0 8.8 240.0 122.0 Smiths Group . . . . .1223.0 13.0 1429.0 1018.0 Catlin Group Ltd. . . .419.9 0.8 421.3 319.9 Fresnillo . . . . . . . . . .1428.0 24.0 1682.0 897.5 Land Securities G . . .845.0 12.0 845.0 545.0 Marston's . . . . . . . . . .105.4 -0.1 117.1 90.4
Tsy 3.250 11 . . . . .101.40 0.00 103.8 101.4 Balfour Beatty . . . . . .305.0 -0.8 357.3 229.8 City of London Gr . . . .85.0 0.0 93.6 65.8 Hiscox Ltd. . . . . . . . . .422.5 -2.2 424.7 335.5 Gem Diamonds Ltd. .271.5 2.5 306.0 186.3 SEGRO . . . . . . . . . . . .325.8 1.0 331.3 250.2 Millennium & Copt . .514.0 1.0 600.5 392.0
Tsy 9.000 11 . . . . .100.82 -0.03 109.2 100.8 Keller Group . . . . . . .524.0 4.0 698.5 510.0 City of London In . . .430.3 -1.5 461.5 273.5 GENERAL RETAILERS Jardine Lloyd Tho . . .685.5 -3.0 709.0 521.5 Hochschild Mining . .500.0 -46.5 680.0 280.0 Shaftesbury . . . . . . . .537.0 6.5 539.5 349.3 Mitchells & Butle . . . .319.9 4.0 361.0 274.0
Tsy 9.000 12 . . . .109.51 0.00 116.9 108.6 Kier Group . . . . . . . .1299.0 22.0 1418.0 886.5 Close Brothers Gr . . .790.0 -1.0 888.5 664.0 Brown (N.) Group . . .279.7 -6.0 311.2 221.0 Lancashire Holdin . . .654.5 4.5 656.5 474.6 Kazakhmys . . . . . . .1278.0 15.0 1671.0 965.0 National Express . . .256.0 1.7 270.2 213.4
Tsy 5.000 12 . . . .103.31 0.00 107.3 103.3 Collins Stewart H . . . .80.3 -0.3 90.8 67.3 Carpetright . . . . . . . . .732.0 -9.0 835.5 631.0 RSA Insurance Gro . .136.8 0.0 143.5 117.3 Kenmare Resources . .47.1 1.3 50.3 11.5 SOFTWARE & COMPUTER SERV. Punch Taverns . . . . . .70.0 0.1 90.4 58.0
Tsy 5.250 12 . . . .104.54 0.00 108.5 104.5 ELECTRICITY
Evolution Group . . . . .68.0 -0.5 98.0 67.0 Debenhams . . . . . . . . .70.4 -1.0 77.4 53.0 LIFE INSURANCE Lonmin . . . . . . . . . . .1575.0 -2.0 1983.0 1355.0 Autonomy Corporat 1815.0 -10.0 1975.0 1271.0 Rank Group . . . . . . . .151.2 0.8 153.4 94.8
Tsy 4.500 13 . . . .106.28 0.01 109.2 105.8 Drax Group . . . . . . . .477.7 3.4 478.6 333.0 F&C Asset Managem .77.7 0.1 92.9 47.5 Dignity . . . . . . . . . . . .769.0 -12.5 782.0 623.5 Petropavlovsk . . . . . .743.0 0.5 1365.0 720.5 Aveva Group . . . . . .1729.0 -1.0 1739.0 1125.0 Restaurant Group . . .298.3 1.7 335.0 208.2
Tsy 2.500 13 . . . .286.24 0.01 286.3 274.0 Scottish & Southe . .1371.0 -9.0 1388.0 1062.0 Hargreaves Lansdo .640.0 9.5 646.5 317.4 Dixons Retail . . . . . . .18.7 0.1 28.5 11.8 Aviva . . . . . . . . . . . . . .426.0 -3.3 477.9 305.8 Randgold Resource 4967.0 44.0 6655.0 4425.0 Computacenter . . . . .462.7 2.7 489.7 260.0 Stagecoach Group . .249.8 0.7 250.3 160.7
Tsy 8.000 13 . . . . .115.96 -0.06 121.3 115.8 Helphire Group . . . . . . .3.8 -0.1 45.0 3.3 Dunelm Group . . . . . .461.0 -4.1 550.0 325.3 Legal & General G . . .113.6 0.0 123.8 75.6 Rio Tinto . . . . . . . . .4148.0 40.5 4712.0 2880.5 Fidessa Group . . . . .1941.0 21.0 1956.0 1300.0 Thomas Cook Group 143.1 -1.6 205.5 141.0
Tsy 5.000 14 . . . . .111.08 0.05 114.1 109.2 ELECTRONIC & ELECTRICAL EQ.
Henderson Group . . .146.3 -1.1 173.1 118.1 Halfords Group . . . . .405.0 9.7 550.0 348.2 Old Mutual . . . . . . . . .128.2 0.0 145.2 102.0 Vedanta Resources 2058.0 -18.0 2583.0 1839.0 Invensys . . . . . . . . . . .307.8 -3.0 364.3 230.2 TUI Travel . . . . . . . . . .225.0 -2.6 271.9 190.0
Tsy 7.750 15 . . . .104.45 0.00 111.0 76.0 Domino Printing S . .665.0 5.5 705.0 386.0 Highway Capital . . . . .17.0 0.0 21.0 6.0 Home Retail Group . .211.8 0.2 244.5 188.5 Phoenix Group Hol . .660.0 -4.5 758.0 584.5 Xstrata . . . . . . . . . . .1355.5 -8.0 1550.0 845.8 Kofax . . . . . . . . . . . . .470.2 4.2 535.0 231.0 Whitbread . . . . . . . .1581.0 -3.0 1887.0 1344.0
Tsy 8.000 15 . . . .126.23 0.00 131.6 123.7 Halma . . . . . . . . . . . . .395.6 1.2 398.6 249.4 ICAP . . . . . . . . . . . . . .470.7 -1.3 570.5 380.2 Inchcape . . . . . . . . . .388.5 -1.3 414.0 237.1 Prudential . . . . . . . . .716.0 2.5 777.0 489.2 Logica . . . . . . . . . . . .132.5 0.1 147.2 101.7 William Hill . . . . . . . . .215.5 2.3 223.5 155.5
Tsy 4.750 15 . . . . .111.70 0.04 114.7 108.6 MOBILE TELECOMS
Laird . . . . . . . . . . . . . .139.7 -0.3 179.0 98.8 IG Group Holdings . .445.0 0.9 553.0 392.2 JD Sports Fashion . .977.0 -28.0 1005.0 683.0 Resolution Ltd. . . . . .299.9 -4.0 311.7 211.3 Micro Focus Inter . . .378.6 -1.4 541.5 276.0
Tsy 4.000 16 . . . .108.86 0.06 111.4 104.9 AIM 50
Morgan Crucible C . .305.6 -1.9 333.0 173.5 Intermediate Capi . . .329.6 6.0 360.3 240.4 Kesa Electricals . . . .145.0 -1.0 174.0 99.2 St James's Place . . . .340.8 -5.1 360.4 204.2 Inmarsat . . . . . . . . . . .600.5 8.0 821.0 575.0 Misys . . . . . . . . . . . . .382.3 8.6 384.5 227.0
Tsy 2.500 16 . . . .329.82 0.10 329.9 304.4 Renishaw . . . . . . . . .1776.0 6.0 1819.0 683.0 International Per . . . .375.6 3.6 386.6 183.3 Kingfisher . . . . . . . . .278.5 -1.7 287.1 198.5 Standard Life . . . . . . .203.6 -0.9 244.7 173.0 Vodafone Group . . . .163.7 -0.3 181.9 135.4 Sage Group . . . . . . . .289.8 0.0 302.0 222.7 Abcam . . . . . . . . . . . .423.0 -0.5 428.5 237.4
Tsy 8.750 17 . . . .136.57 -0.01 142.2 132.9 Spectris . . . . . . . . . .1539.0 0.0 1575.0 740.5 International Pub . . . .116.8 0.2 118.3 108.6 Marks & Spencer G . .380.2 -1.3 427.5 327.2 SDL . . . . . . . . . . . . . . .700.5 -4.5 728.5 441.2 Albemarle & Bond . .335.0 0.0 336.0 218.0
Tsy 12.000 17 . . .126.96 0.00 185.9 126.0 Investec . . . . . . . . . . .506.0 -3.0 538.0 429.2 Mothercare . . . . . . . .424.9 -3.3 627.5 382.0 MEDIA NONEQUITY INVESTM. COMM. Telecity Group . . . . . .539.5 -3.5 548.5 374.0 Amerisur Resource . .25.8 -1.3 29.0 11.5
Tsy 1.250 17 . . . . .110.93 0.08 111.1 104.9 EQUITY INVESTMENT INSTRUM.
IP Group . . . . . . . . . . . .52.8 -1.0 53.9 27.9 Next . . . . . . . . . . . . .2275.0 7.0 2326.0 1868.0 4imprint Group . . . . .270.5 0.0 276.0 195.0 Genesis Emerging . .528.0 -1.5 568.0 433.3 Archipelago Resou . . .62.5 0.6 66.8 32.3
Tsy 5.000 18 . . . . .114.45 0.03 117.6 109.7 Aberforth Smaller . . .707.0 0.0 707.0 498.0 Jupiter Fund Mana . .283.4 -3.4 337.3 180.3 Sports Direct Int . . . .221.0 -9.0 234.1 94.2 Aegis Group . . . . . . .151.0 9.8 152.3 103.6 SUPPORT SERVICES ASOS . . . . . . . . . . . .2298.0 297.0 2432.0 632.5
Tsy 4.500 19 . . . . .110.61 0.02 113.8 105.4 OIL & GAS PRODUCERS
Alliance Trust . . . . . .376.4 -1.7 385.0 293.5 LMS Capital . . . . . . . . .63.3 -0.4 64.8 40.0 WH Smith . . . . . . . . . .482.3 -3.1 523.0 398.2 Bloomsbury Publis . .126.5 -1.9 138.0 108.5 Aggreko . . . . . . . . . .1904.0 24.0 1909.0 1330.0 Aurelian Oil & Ga . . . .51.3 0.3 92.0 35.8
Tsy 3.750 19 . . . .104.82 0.02 107.7 99.4 Bankers Inv Trust . . .425.0 2.7 428.0 337.0 London Finance & . . .23.5 0.0 23.5 16.5 British Sky Broad . . .835.0 0.5 849.0 563.5 Afren . . . . . . . . . . . . . .164.6 0.4 171.2 79.2 Ashtead Group . . . . .170.2 -4.8 207.9 77.0 Avanti Communicat .431.8 13.5 735.0 376.0
Tsy 2.500 20 . . . .336.63 0.17 336.8 303.8 HEALTH CARE EQUIPMENT & S.
BH Global Ltd. GB .1098.0 6.0 1174.0 1058.0 London Stock Exch .968.5 -3.5 990.0 544.0 Centaur Media . . . . . . .54.8 -0.4 73.0 45.8 BG Group . . . . . . . . .1351.0 9.0 1564.5 1002.0 Atkins (WS) . . . . . . . .818.0 6.5 820.0 650.0 Avocet Mining . . . . . .197.8 0.8 253.5 112.0
Tsy 4.750 20 . . . . .112.04 0.03 115.9 106.6 BH Global Ltd. US . . . .10.8 0.2 11.6 10.4 Man Group . . . . . . . . .249.8 -0.6 311.0 206.4 Smith & Nephew . . . .668.0 -2.0 742.0 537.5 Chime Communicati .277.5 1.5 298.5 158.0 BP . . . . . . . . . . . . . . . .450.9 -3.5 509.0 302.9 Babcock Internati . . .697.5 6.0 704.5 492.8 Blinkx . . . . . . . . . . . . .135.5 -1.0 148.8 33.5
Tsy 8.000 21 . . . .140.39 0.04 147.1 133.8 BH Macro Ltd. EUR . . .17.0 0.1 17.2 15.8 Paragon Group Of . .205.5 -0.6 206.4 114.4 Synergy Health . . . . .880.0 5.0 948.0 607.0 Creston . . . . . . . . . . . .117.5 0.3 118.0 78.5 Cairn Energy . . . . . . .429.4 4.4 493.2 366.0 Berendsen . . . . . . . . .494.8 1.9 519.5 360.2 Borders & Souther . . .54.8 -2.0 93.0 54.5
Tsy 4.000 22 . . . .104.48 0.04 108.4 99.0 BH Macro Ltd. GBP 1758.0 9.0 1780.0 1630.0 Provident Financi . . .977.5 1.5 1033.0 728.5 Daily Mail and Ge . . .444.0 -1.9 594.5 433.0 EnQuest . . . . . . . . . . .132.8 2.0 158.5 96.0 Bunzl . . . . . . . . . . . . .782.0 5.0 783.0 658.0 BowLeven . . . . . . . . .300.5 2.5 398.0 117.0
Tsy 1.875 22 . . . . .116.52 0.17 117.8 108.5 BH Macro Ltd. USD . . .16.9 0.0 17.1 15.8 Rathbone Brothers .1188.0 0.0 1257.0 762.5 HHOLD GDS & HOME CONSTR. Euromoney Institu . .660.0 -7.5 736.0 562.5 Essar Energy . . . . . .438.4 5.9 589.5 387.1 Capita Group . . . . . . .740.5 6.5 810.0 635.5 Caledon Resources .104.5 0.5 107.0 23.3
Tsy 2.500 24 . . . .294.82 0.22 295.1 262.1 BlackRock World M .766.0 1.5 815.5 533.0 Real Estate Credi . . . . .1.4 -0.0 2.4 0.9 Barratt Developme . .109.4 -2.1 119.0 70.1 Future . . . . . . . . . . . . . .18.0 -0.3 30.0 15.8 Exillon Energy . . . . . .452.9 -2.1 469.7 166.5 Carillion . . . . . . . . . . .375.0 0.7 403.2 291.2 Cape . . . . . . . . . . . . . .567.0 6.5 568.0 190.5
Tsy 5.000 25 . . . . .113.32 -0.01 118.5 107.4 BlueCrest AllBlue . . .174.9 0.0 176.2 161.6 RSM Tenon Group . . .25.3 0.3 66.3 21.3 Heritage Oil . . . . . . . .243.5 -0.2 486.0 227.8 De La Rue . . . . . . . . .785.0 -7.5 984.0 549.5 Conygar Investmen .116.8 1.0 120.0 101.3
Tsy 4.250 27 . . . .103.58 -0.05 108.8 97.9 British Assets Tr . . . .136.2 0.2 140.5 105.0 S & U . . . . . . . . . . . . .637.5 7.5 708.5 482.5 JKX Oil & Gas . . . . . .295.0 9.8 335.1 228.0 Electrocomponents .293.5 0.9 295.9 205.7 Cove Energy . . . . . . . .81.8 -2.0 112.8 47.5
Tsy 1.250 27 . . . .109.70
Tsy 6.000 28 . . . .125.81
0.16
-0.08
111.2
132.7
100.5
119.5
British Empire Se . . .530.0
Caledonia Investm .1769.0
2.0
-3.0
530.0 404.1
1928.0 1539.0
Schroders . . . . . . . .1594.0 1.0 1922.0 1154.0
Schroders (Non-Vo .1324.0 1.0 1554.0 950.5
MAIN CHANGES UK 350 Premier Oil . . . . . . . . .482.4
Royal Dutch Shell . .2138.0
-2.6
4.5
535.0 283.3
2326.5 1624.0
Experian . . . . . . . . . . .785.5 -6.5
Filtrona PLC . . . . . . . .372.2 0.7
819.0 578.0
385.5 193.8
Daisy Group . . . . . . .101.0 -0.3
Desire Petroleum . . . .16.0 1.3
108.5
168.5
86.0
11.3
Tsy 4.750 30 . . . .109.22 -0.12 115.0 103.0 City of London In . . .300.0 1.8 303.2 235.0 Tullett Prebon . . . . . .369.1 -2.9 428.6 307.5 Royal Dutch Shell . .2143.5 8.0 2336.0 1554.0 G4S . . . . . . . . . . . . . . .288.0 -2.6 291.1 237.7 EMIS Group . . . . . . . .545.0 -5.0 555.5 303.5
Tsy 4.125 30 . . . .279.08 0.19 279.7 248.7 Dexion Absolute L . .148.0 -0.2 151.0 131.2 Walker Crips Grou . . .49.0 0.0 50.0 45.0
Risers % Fallers %
Salamander Energy .280.0 0.0 317.6 210.0 Hays . . . . . . . . . . . . . .106.9 -1.6 133.6 88.4 Encore Oil . . . . . . . . . .62.3 -1.5 151.5 28.0
Tsy 4.250 32 . . . .102.27 -0.11 107.8 96.0 Edinburgh Dragon . .242.8 0.6 262.1 201.1 Aegis Group . . . . . . .151.0 6.9 Hochschild Mining . .500.0 -8.5 Soco Internationa . . .387.7 5.8 484.2 292.0 Homeserve . . . . . . . .520.0 0.5 532.0 398.6 Faroe Petroleum . . . .167.0 2.0 218.3 113.5
Tsy 4.250 36 . . . .101.70 -0.17 107.4 95.0 FIXED LINE TELECOMS
Edinburgh Inv Tru . . .485.0 -1.9 492.2 372.2 JKX Oil & Gas . . . . . .295.0 3.4 Supergroup . . . . . . . .969.0 -6.6 Tullow Oil . . . . . . . . .1317.0 3.0 1493.0 991.5 Howden Joinery Gr . .109.7 -0.6 127.5 56.8 Gulfsands Petrole . . .264.3 17.3 401.5 234.8
Tsy 4.750 38 . . . . .110.31 -0.18 116.5 102.8 Electra Private E . . .1736.0 -4.0 1755.0 1177.0 BT Group . . . . . . . . . .197.2 -0.8 201.9 125.6 Intertek Group . . . . .2014.0 12.0 2148.0 1379.0 GW Pharmaceutical .123.8 5.3 141.0 83.0
Tsy 4.500 42 . . . .106.85 0.00 112.8 98.9 Kenmare Resources . .47.1 2.7 Sports Direct Inte . . .221.0 -3.9 OIL EQUIPMENT & SERVICES
F&C Inv Trust . . . . . .314.2 0.4 317.5 251.4 Cable & Wireless . . . .42.0 -0.8 62.9 41.3 PZ Cussons . . . . . . . .385.0 2.7 Lloyds Banking Gro . .46.9 -3.8 Michael Page Inte . . .539.5 -1.5 567.0 349.4 Hamworthy . . . . . . . .565.0 -13.0 582.0 292.5
Fidelity China Sp . . . .102.0 -1.3 128.7 96.0 Cable & Wireless . . . .54.9 1.4 92.0 46.6 Cable & Wireless W . .54.9 2.6 International Cons . .229.6 -3.0 Amec . . . . . . . . . . . .1127.0 3.0 1251.0 805.5 Mitie Group . . . . . . . .231.9 3.2 241.1 188.7 Hargreaves Servic .1005.0 -1.0 1040.0 556.5
ALTERNATIVE ENERGY Fidelity European . .1261.0 4.0 1287.0 916.0 COLT Group SA . . . .145.5 2.5 156.2 109.0 Hunting . . . . . . . . . . .757.0 7.0 817.0 439.4 Premier Farnell . . . . .288.2 -4.1 308.8 210.2 Healthcare Locums . .112.5 0.0 112.5 112.5
Glencore Internat . . .515.0 10.0 531.1 504.0 Fidelity Special . . . . .572.5 2.5 595.0 503.0 TalkTalk Telecom . . .148.3 2.9 168.3 114.3 Moneysupermarket.c 101.5 2.6 RPC Group . . . . . . . .345.0 -2.8 John Wood Group . .634.5 7.5 706.0 293.1 Regus . . . . . . . . . . . . .111.4 -0.3 119.0 66.1 Immunodiagnostic . .940.0 -8.5 980.0 575.0
Herald Inv Trust . . . . .522.0 -1.0 541.0 350.5 Telecom Plus . . . . . . .585.0 10.0 599.5 327.0 London & Stamford .140.0 2.6 JD Sports Fashion . .977.0 -2.8 Lamprell . . . . . . . . . . .390.0 -4.0 400.9 195.3 Rentokil Initial . . . . . . .97.9 0.3 121.7 84.3 Impellam Group . . . .382.6 52.6 387.5 73.0
AEROSPACE & DEFENCE HICL Infrastructu . . . .118.2 0.0 121.3 112.0 Northumbrian Water .366.0 2.6 Ashtead Group . . . . .170.2 -2.7 Petrofac Ltd. . . . . . .1562.0 22.0 1685.0 1141.0 RPS Group . . . . . . . . .239.6 -3.3 251.4 169.8 James Halstead . . . . .440.0 -10.0 485.0 306.0
BAE Systems . . . . . .324.2 0.0 369.9 294.7 Impax Environment .120.5 0.1 130.5 106.5 FOOD & DRUG RETAILERS Halfords Group . . . . .405.0 2.5 Pace . . . . . . . . . . . . . .112.3 -2.4 Serco Group . . . . . . .586.5 6.0 640.0 529.5 Kalahari Minerals . . .230.0 -2.8 301.0 142.0
PERSONAL GOODS
Chemring Group . . . .674.5 0.0 736.5 519.6 JPMorgan American .859.5 -4.5 909.0 673.0 Booker Group . . . . . . .69.8 1.0 70.3 39.5 Croda Internationa .1945.0 2.3 Devro . . . . . . . . . . . . .280.0 -2.1 Shanks Group . . . . . .129.2 2.2 129.2 96.5 London Mining . . . . .385.0 -5.0 436.5 194.0
Cobham . . . . . . . . . . .224.7 2.6 247.6 192.3 JPMorgan Asian In . .235.5 0.5 250.8 187.0 Greggs . . . . . . . . . . . .535.5 -0.5 543.5 418.7 Burberry Group . . . .1307.0 2.0 1365.0 724.5 SIG . . . . . . . . . . . . . . .148.2 -0.1 153.5 90.7 Lupus Capital . . . . . .119.0 -4.0 150.0 72.0
Meggitt . . . . . . . . . . . .366.0 0.8 380.9 261.7 JPMorgan Emerging .585.5 -1.5 639.0 479.5 Morrison (Wm) Sup .301.0 -0.1 308.3 257.7 Price Chg High Low Price Chg High Low PZ Cussons . . . . . . . .385.0 10.0 409.0 292.0 SThree . . . . . . . . . . . .405.0 -3.8 447.6 231.1 M. P. Evans Group . .415.0 0.0 500.5 317.5
QinetiQ Group . . . . . .116.8 0.0 136.3 96.7 JPMorgan European .930.5 0.5 983.5 614.0 Ocado Group . . . . . . .225.0 3.0 285.0 123.5 Supergroup . . . . . . . .969.0 -68.0 1820.0 620.0 Travis Perkins . . . . .1066.0 4.0 1127.0 709.0 Majestic Wine . . . . . .441.0 -4.0 445.3 268.0
Rolls-Royce Group . .627.5 -1.5 665.0 535.0 JPMorgan Indian I . . .416.0 0.0 502.0 393.0 Sainsbury (J) . . . . . . .339.3 -0.4 395.0 317.2 Bellway . . . . . . . . . . . .719.0 5.0 753.5 511.0 Haynes Publishing . .247.5 0.0 262.5 202.5 AstraZeneca . . . . . .3153.5 24.5 3385.0 2801.5 Wolseley . . . . . . . . .1914.0 -40.0 2261.0 1223.0 May Gurney Integr . .275.0 -6.0 285.2 177.0
Senior . . . . . . . . . . . . .152.7 0.9 159.5 111.2 JPMorgan Russian .659.0 6.0 755.0 502.0 Tesco . . . . . . . . . . . . .417.5 3.0 440.7 377.5 Berkeley Group Ho .1114.0 -4.0 1156.0 751.0 Huntsworth . . . . . . . . .73.3 -2.5 87.5 65.0 PHARMACEUTICALS & BIOTECH Monitise . . . . . . . . . . . .27.8 0.8 29.5 17.8
Law Debenture Cor . .365.9 2.5 372.4 273.3 TECHNOLOGY HARDW. & EQUIP. Mulberry Group . . . .1347.0 -18.0 1610.0 200.5
Ultra Electronics . . .1695.0 6.0 1895.0 1522.0 Bovis Homes Group .434.0 -3.6 464.7 326.6 Informa . . . . . . . . . . . .427.3 -0.3 461.1 342.1
Mercantile Inv Tr . . .1087.0 2.0 1137.0 840.0 FOOD PRODUCERS BTG . . . . . . . . . . . . . .280.0 5.4 282.5 180.0 ARM Holdings . . . . . .581.5 10.5 651.0 264.3 Nanoco Group . . . . . . .77.0 -0.8 115.8 68.0
AUTOMOBILES & PARTS Persimmon . . . . . . . .463.3 -1.8 502.5 336.5 ITE Group . . . . . . . . . .246.7 -0.4 258.2 136.2
Merchants Trust . . . .429.9 4.1 431.8 320.0 Associated Britis . .1074.0 -3.0 1182.0 940.0 Reckitt Benckiser . .3428.0 38.0 3648.0 3015.0 ITV . . . . . . . . . . . . . . . . .69.0 -0.1 93.5 48.3 Genus . . . . . . . . . . . .1018.0 11.0 1018.0 704.5 CSR . . . . . . . . . . . . . .337.2 0.2 447.0 280.9 Nautical Petroleu . . .342.5 4.8 547.0 111.0
GKN . . . . . . . . . . . . . .213.9 1.7 237.1 109.3 Monks Inv Trust . . . .356.1 1.9 367.9 275.5 Cranswick . . . . . . . . .790.0 8.0 907.5 735.0 Redrow . . . . . . . . . . . .119.0 0.0 139.0 97.5 Johnston Press . . . . . . .5.9 -0.1 20.0 4.6 GlaxoSmithKline . . .1301.0 5.5 1348.5 1095.0 Imagination Techn . .501.0 3.0 502.5 235.0 Nichols . . . . . . . . . . . .578.0 20.3 578.0 370.0
Murray Income Tru . .663.0 3.0 672.0 518.0 Dairy Crest Group . . .392.5 -1.1 424.9 339.7 Taylor Wimpey . . . . . . .35.7 -0.3 43.3 22.3 Mecom Group . . . . . .250.8 4.8 310.0 162.0 Hikma Pharmaceuti .867.5 10.5 900.0 674.5 Pace . . . . . . . . . . . . . .112.3 -2.7 231.8 93.0 Numis Corporation . .109.5 -1.5 146.5 94.0
BANKS Murray Internatio . . .954.0 -6.0 966.0 803.0 Devro . . . . . . . . . . . . .280.0 -6.0 296.9 174.0 Shire Plc . . . . . . . . . .1894.0 16.0 1961.0 1341.0 Spirent Communica .150.2 0.5 160.3 104.5 Patagonia Gold . . . . . .43.0 -0.5 59.3 12.5
Moneysupermarket. .101.5 2.6 103.4 64.6
Barclays . . . . . . . . . . .264.0 -1.5 344.0 255.4 Perpetual Income . . .275.0 -0.5 276.4 212.0 Premier Foods . . . . . . .31.2 -0.1 35.1 16.0 INDUSTRIAL ENGINEERING Pearson . . . . . . . . . .1143.0 6.0 1171.0 864.0 Pursuit Dynamics . . .392.0 2.0 700.0 188.0
Polar Cap Technol . .349.0 -1.1 391.2 273.6 Tate & Lyle . . . . . . . . .648.0 12.0 651.5 409.1 REAL ESTATE INVEST. & SERV. TOBACCO Rockhopper Explor .269.0 4.0 510.0 202.5
HSBC Holdings . . . . .625.8 -1.5 730.9 596.2 Bodycote . . . . . . . . . .372.4 -1.4 397.7 182.5 Reed Elsevier . . . . . .556.0 3.5 590.5 471.4
Lloyds Banking Gr . . .46.9 -1.8 77.6 46.8 RIT Capital Partn . . .1295.0 7.0 1328.0 1056.0 Unilever . . . . . . . . . .1976.0 4.0 2000.0 1688.0 Charter Internati . . . .762.0 -10.0 853.5 567.0 Rightmove . . . . . . . .1098.0 12.0 1104.0 596.5 Capital & Countie . . .177.2 -1.0 180.1 100.2 British American . .2738.0 21.5 2752.0 2091.0 RWS Holdings . . . . . .445.0 10.0 445.0 239.0
Royal Bank of Sco . . .41.5 -0.1 52.1 37.6 Schroder Asia Pac . .224.2 -0.3 233.6 182.8 Fenner . . . . . . . . . . . .377.5 -5.7 391.9 186.8 STV Group . . . . . . . . .138.0 2.0 168.0 66.0 Daejan Holdings . . .2840.0 51.0 2919.0 2220.0 Imperial Tobacco . .2178.0 0.0 2231.0 1784.0 Songbird Estates . . .157.0 0.0 159.5 133.8
Scottish Inv Trus . . . .509.0 4.0 517.0 401.5 FORESTRY & PAPER F&C Commercial Pr .105.5 1.7 108.0 88.0 Sterling Energy . . . . . .44.0 -3.8 147.0 43.7
Standard Chartere .1581.5 -4.5 1950.0 1522.2 IMI . . . . . . . . . . . . . . .1038.0 17.0 1112.0 642.0 Tarsus Group . . . . . .142.0 -5.0 165.0 111.0
Scottish Mortgage . .735.5 2.0 764.0 533.0 Mondi . . . . . . . . . . . . .603.0 -1.0 615.5 367.6 Grainger . . . . . . . . . . .125.0 0.0 128.2 86.3 TRAVEL & LEISURE Valiant Petroleum . . .582.0 -11.0 761.5 504.0
BEVERAGES Melrose . . . . . . . . . . .335.7 -3.2 355.5 203.4 Trinity Mirror . . . . . . . .42.5 -2.3 124.3 42.0
SVG Capital . . . . . . . .259.0 -4.0 279.8 137.8 GAS, WATER & MULTIUTILITIES Northgate . . . . . . . . . .326.6 0.0 346.7 152.3 United Business M . .568.5 3.5 725.0 483.8 Helical Bar . . . . . . . . .266.7 1.8 339.5 255.3 Avis Europe . . . . . . . .191.0 1.0 267.9 184.0 Vatukoula Gold Mi . . .119.0 9.3 227.0 84.0
AG Barr . . . . . . . . . .1368.0 8.0 1395.0 1000.0 Temple Bar Inv Tr . . .930.5 -3.5 947.5 717.0 Rotork . . . . . . . . . . .1698.0 -9.0 1895.0 1254.0 UTV Media . . . . . . . . .128.5 0.5 151.0 106.0 London & Stamford .140.0 3.5 140.0 110.3 Betfair Group . . . . . . .798.5 -16.5 1550.0 753.0 Young & Co's Brew . .655.0 -25.0 685.0 510.0
Britvic . . . . . . . . . . . . .437.5 6.4 518.0 364.5 Templeton Emergin .636.0 -4.0 689.5 515.0 Centrica . . . . . . . . . . .314.5 0.4 346.1 277.3 Spirax-Sarco Engi . .2005.0 4.0 2063.0 1346.0 Wilmington Group . . .119.0 -2.0 183.0 118.5 Savills . . . . . . . . . . . . .426.0 3.1 427.1 273.1 Bwin.party Digita . . .142.0 0.0 309.5 127.5
Diageo . . . . . . . . . . .1291.0 0.0 1301.0 1033.0 TR Property Inv T . . .195.4 -2.3 201.0 132.3 International Pow . . .315.0 -0.9 448.6 289.6 Weir Group . . . . . . .1970.0 10.0 1995.0 894.0 WPP . . . . . . . . . . . . . .734.5 -4.5 846.5 614.5 St. Modwen Proper . .187.5 0.9 187.6 135.4 Carnival . . . . . . . . . .2353.0 -20.0 3153.0 2037.0
SABMiller . . . . . . . . .2236.5 23.0 2306.0 1827.0 TR Property Inv T . . . .89.9 -0.2 91.0 59.5 National Grid . . . . . . .589.5 -3.5 632.5 484.2 Ferrexpo . . . . . . . . . . .451.6 7.9 499.0 235.0 Yell Group . . . . . . . . . . .6.0 -0.0 30.7 5.8 UK Commercial Pro . .84.4 0.0 85.0 74.3 Compass Group . . . .589.5 1.0 594.0 501.0
CHEMICALS Witan Inv Trust . . . . .512.5 -1.0 528.0 409.9 Northumbrian Wate .366.0 9.1 370.0 280.9 Talvivaara Mining . . .478.0 -2.0 622.0 351.6 Unite Group . . . . . . . .218.4 -2.5 229.8 163.0 Domino's Pizza UK . .398.4 1.2 586.0 349.6
Pennon Group . . . . . .657.0 -1.0 675.0 527.0 MINING easyJet . . . . . . . . . . . .361.5 1.8 479.0 322.3
FINANCIAL SERVICES INDUSTRIAL TRANSPORTATION REAL ESTATE INVEST. TRUSTS
AZ Electronic Mat . . .319.0 5.9 338.1 248.5 Severn Trent . . . . . .1463.0 -17.0 1517.0 1216.0 African Barrick G . . .453.0 1.4 670.0 445.0 Enterprise Inns . . . . . .76.9 -1.4 122.7 76.7
Croda Internation . .1945.0 44.0 1949.0 971.0 3i Group . . . . . . . . . . .279.8 -1.2 340.0 254.1 United Utilities . . . . .602.0 -8.0 632.0 520.0 BBA Aviation . . . . . . .215.7 -1.1 240.8 175.0 Anglo American . . .2984.0 44.0 3437.0 2254.0 Big Yellow Group . . .332.4 0.6 353.3 284.4 FirstGroup . . . . . . . . .336.7 -1.1 412.6 311.3
Elementis . . . . . . . . . .155.7 -2.3 169.8 58.8 3i Infrastructure . . . .123.5 -0.3 125.2 106.6
GENERAL INDUSTRIALS Stobart Group Ltd . . .140.1 0.9 163.6 124.1 Anglo Pacific Gro . . .300.0 -1.9 369.3 241.5 British Land Co . . . . .592.0 1.0 604.5 429.0 Go-Ahead Group . . .1497.0 7.0 1504.0 1042.0 http://corporate.webfg.com
Johnson Matthey . .2043.0 -9.0 2119.0 1460.0 Aberdeen Asset Ma .231.7 0.0 240.0 123.0 Antofagasta . . . . . . .1290.0 15.0 1634.0 761.0 Capital Shopping . . .387.1 -0.5 424.8 301.3 Greene King . . . . . . .494.9 0.3 502.5 376.2 mailto:
Victrex . . . . . . . . . . .1426.0 5.0 1525.0 1049.0 Ashmore Group . . . .383.0 2.1 383.8 236.5 Cookson Group . . . . .680.0 6.5 724.5 367.4 NON LIFE INSURANCE Aquarius Platinum . .343.0 5.6 419.0 227.1 Derwent London . . .1853.0 12.0 1853.0 1208.0 InterContinental . . .1220.0 -9.0 1435.0 982.0
Berkeley Technolo . . . .4.3 0.0 9.0 2.2 DS Smith . . . . . . . . . .215.1 1.9 226.0 108.0 Admiral Group . . . . .1709.0 9.0 1754.0 1315.0 BHP Billiton . . . . . . .2326.0 20.5 2631.5 1684.5 Great Portland Es . . .442.2 6.6 442.2 280.5 International Con . . .229.6 -7.1 305.0 186.5 globaltechsales@webfg.com

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Price Chg High Low
AIR LIQUIDE........................................93.30 0.24 100.65 78.81 3M ........................................................90.62 -0.08 97.95 72.72
ALLIANZ ..............................................91.78 -1.21 108.85 77.48 ABBOTT LABS ...................................51.02 -0.06 54.24 44.59
ALSTOM ..............................................41.31 -0.36 45.32 30.78 ALCOA ................................................15.61 -0.31 18.47 9.81

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ANHEUS-BUSCH INBEV ....................40.39 -0.25 46.33 38.37 ALTRIA GROUP ..................................27.25 -0.35 28.13 19.53
ARCELORMITTAL...............................22.09 0.00 28.55 20.26 AMAZON.COM..................................185.69 -2.63 206.39 105.80
AXA......................................................14.45 -0.30 16.16 10.88 AMERICAN EXPRESS........................48.78 -0.50 51.97 37.13

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BANCO SANTANDER...........................7.95 -0.14 10.23 7.00 AMGEN INC.........................................58.60 -0.09 61.53 50.34
BASF SE..............................................62.86 0.44 70.22 40.74 APPLE ...............................................338.04 -5.40 364.90 236.78
BAYER .................................................56.25 0.82 59.44 43.27 AT&T....................................................30.36 -0.29 31.94 23.88
BBVA......................................................7.82 -0.22 10.71 6.75 BANK OF AMERICA ...........................10.83 -0.45 16.10 10.75
BMW ....................................................60.74 0.45 65.49 37.31 BERKSHIRE HATAW B.......................75.34 -0.91 87.65 69.61
BNP PARIBAS.....................................52.50 -1.05 59.93 40.81 BOEING CO.........................................74.58 -0.26 80.65 59.48
CARREFOUR ......................................30.09 -0.10 41.28 29.83 Each day we’ll cover the morning’s breaking news, BRISTOL MYERS SQUI......................27.97 -0.01 28.99 22.31
CREDIT AGRICOLE ............................10.29 -0.30 12.92 7.87 CATERPILLAR....................................99.86 -1.24 116.55 54.89
CRH PLC .............................................14.48
DAIMLER .............................................47.20
-0.19
-0.37
19.92
59.09
11.51
37.03
give you current market analysis and CHEVRON ...........................................99.68
CISCO SYSTEMS................................15.99
-1.32
-0.02
109.94
26.00
66.83
15.88
DANONE..............................................50.42
DEUTSCHE BANK ..............................40.12
0.06
-0.76
51.33
51.61
41.00
35.93
the most up-to-date financial headlines. CITIGROUP .........................................38.07
COCA-COLA .......................................65.42
-1.78
-0.11
51.50
68.77
36.20
49.47
DEUTSCHE BOERSE .........................53.81 -0.59 62.48 46.33 COLGATE PALMOLIVE ......................84.43 0.32 87.58 73.12
DEUTSCHE TELEKOM .......................10.01 -0.03 11.38 8.97 CONOCOPHILLIPS.............................70.92 -1.47 81.80 48.06
E.ON.....................................................18.42
ENEL......................................................4.62
-0.42
-0.10
25.54
4.86
18.25
3.42
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EMC CORP..........................................27.32
-0.44
-0.61
57.00
28.73
33.73
17.72
ENI .......................................................16.05
FRANCE TELECOM............................15.28
-0.06
-0.13
18.66
17.45
14.59
14.01
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GENERAL ELECTRIC.........................18.46
-0.89
-0.36
88.23
21.65
55.94
13.75
GDF SUEZ ...........................................24.33 -0.29 30.05 22.64 GOLDMAN SACHS GRP ..................133.90 -1.43 175.34 129.50

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GENERALI ASS...................................14.77 -0.24 17.05 13.31 GOOGLE A........................................521.06 -2.02 642.96 433.63
IBERDROLA ..........................................6.04 -0.05 6.50 4.38 HEWLETT PACKARD.........................35.96 -0.15 49.39 35.44
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ING GROEP CVA...................................8.08 -0.11 9.50 5.86 HOME DEPOT.....................................34.29 -0.34 39.38 26.62
INTESA SANPAOLO .............................1.78 -0.06 2.53 1.65 IBM.....................................................164.75 -0.30 173.54 120.61
KON.PHILIPS ELECTR .......................18.41 -0.14 26.87 18.37 INTEL CORP .......................................21.83 0.10 23.96 17.60
L'OREAL..............................................85.75 0.56 90.00 74.50 J.P.MORGAN CHASE .........................40.53 -1.04 48.36 35.16
LVMH..................................................117.55 -0.70 129.05 84.85 WORLD INDICES JOHNSON & JOHNSON.....................66.05 -0.04 67.37 56.86
MUNICH RE .......................................103.05 -0.95 126.00 98.38 KRAFT FOODS A................................34.06 -0.04 35.44 27.59
Price Chg %chg Price Chg %chg Price Chg %chg Price Chg %chg
NOKIA....................................................4.55 0.07 8.49 4.27 MC DONALD'S CORP ........................80.70 0.16 83.08 65.31
FTSE 100 . . . . . . . . . . . . . . 5863.16 8.15 0.14 S&P 500 . . . . . . . . . . . . . . . 1286.17 -13.99 -1.08 CAC 40 . . . . . . . . . . . . . . . . 3863.40 -27.28 -0.70 BOVESPA SAO PAOLO . . 63067.73-1272.77 -1.98
REPSOL YPF.......................................22.57 -0.15 24.90 15.67 MERCK AND CO. NEW ......................35.56 -0.26 37.68 31.06
FTSE 250 INDEX. . . . . . . . 11996.93 24.27 0.20 NASDAQ COMPOSITE . . . 2702.56 -30.22 -1.11 SHANGHAI SE INDEX . . . . 2728.02 22.84 0.84 ISEQ OVERALL INDEX . . . 2940.50 -23.16 -0.78
RWE .....................................................37.88 -0.31 59.85 37.44 MICROSOFT........................................24.01 0.11 29.46 22.73
FTSE UK ALL SHARE . . . . 3062.74 4.16 0.14 FTSEUROFIRST 300 . . . . . 1104.97 -6.54 -0.59 HANG SENG. . . . . . . . . . . 22949.56 -304.28 -1.31 STI . . . . . . . . . . . . . . . . . . . . 3116.41 -29.26 -0.93
SAINT-GOBAIN ...................................44.26 -0.24 47.64 27.81 OCCID. PETROLEUM.......................101.94 -2.26 117.89 72.13
FTSE AIM ALL SH . . . . . . . . 882.62 2.51 0.29 NIKKEI 225 AVERAGE . . . . 9380.35 -111.86 -1.18 S&P/ASX 20 INDEX . . . . . . 2743.10 -6.10 -0.22 IGBM . . . . . . . . . . . . . . . . . . 1034.76 -13.10 -1.25
SANOFI................................................52.44 0.01 56.50 44.01 ORACLE CORP...................................32.19 -0.14 36.50 21.24
DOW JONES INDUS 30 . . 12089.96 -61.30 -0.50 DAX 30 PERFORMANCE. . 7084.57 -24.46 -0.34 ASX ALL ORDINARIES . . . 4648.70 -17.90 -0.38 SWISS MARKET INDEX. . . 6370.06 -37.33 -0.58
SAP ......................................................42.07 -0.10 46.15 34.13 PEPSICO .............................................68.89 -0.08 71.89 60.32
SCHNEIDER ELECTRIC....................111.70
SIEMENS .............................................90.21
0.20
-0.79
123.65
99.39
79.70
70.02
COMMODITIES CREDIT & RATES PFIZER ................................................20.74
PHILIP MORRIS INTL .........................68.32
-0.10
-0.67
21.45
71.75
14.00
42.94
SOCIETE GENERALE.........................40.09 -0.90 52.70 29.71 LON GD ONCE FIX AM...........1542.75 11.75 TIN CASH.............................26350.00 1000.00 BoE IR Overnight ............................0.500 0.00 Euro Base Rate ...............................1.250 0.00 PROCTER AND GAMBLE ..................65.50 0.07 67.72 56.57
TELECOM ITALIA..................................0.96 -0.01 1.16 0.88 SILVER LDN FIX AM ..................37.03 1.36 ZINC CASH ............................2221.00 32.50 BoE IR 7 days .................................0.500 0.00 Finance house base rate ................1.000 0.00 QUALCOMM INC ................................56.48 -0.56 59.84 31.63
TELEFONICA ......................................16.40 -0.14 19.69 14.83 MAPLE LEAF 1 OZ ....................55.00 -3.50 BoE IR 1 month ..............................0.500 0.00 US Fed funds...................................0.250 0.00 SCHLUMBERGER ..............................83.06 -1.98 95.64 52.91
BRENT SPOT INDEX ................114.92 0.43 BoE IR 3 months ............................0.500 0.00 US long bond yield .........................4.020 0.03
TOTAL..................................................38.15 -0.21 44.55 35.66 LON PLATINUM AM................1816.00 -3.00 TRAVELERS CIES ..............................61.06 -0.12 64.17 47.77
SOYA .....................................1414.50 7.50 BoE IR 6 months ............................0.545 0.00 European repo rate .........................0.873 0.00
UNIBAIL-RODAMCO SE...................152.70 -0.15 159.30 108.66 LON PALLADIUM AM ...............772.00 -1.00 UNITED TECHNOLOGIE ....................83.71 0.47 90.67 62.88
COCOA ..................................2878.00 -26.00 LIBOR Euro - overnight ..................0.892 0.00 Euro Euribor ....................................1.015 0.00
UNICREDIT............................................1.52 -0.05 2.24 1.46 ALUMINIUM CASH .................2609.00 -22.00 LIBOR Euro - 12 months ................2.106 0.00 The vix index ...................................18.11 0.16 VERIZON COMMS ..............................35.21 -0.42 38.95 25.30
UNILEVER CVA...................................22.32 -0.06 24.11 20.68 COPPER CASH ......................9015.50 -21.50 COFFEE...................................270.95 9.70 WAL-MART STORES..........................53.76 0.10 57.90 47.77
LIBOR USD - overnight...................0.126 0.00 The baltic dry index ........................1.489 0.00
VINCI....................................................42.18 0.03 45.48 33.01 LEAD CASH ...........................2425.00 -59.00 KRUG.....................................1607.70 14.30 LIBOR USD - 12 months .................0.725 0.00 Markit iBoxx...................................220.69 -0.13 WALT DISNEY CO ..............................39.40 0.02 44.34 30.72
VIVENDI ...............................................18.90 -0.17 22.07 16.25 NICKEL CASH ......................22535.00 -415.00 WHEAT ....................................189.50 -4.00 Halifax mortgage rate .....................3.500 0.00 Markit iTraxx ....................................95.06 0.00 WELLS FARGO & CO.........................26.26 -0.60 34.25 23.02
24 Lifestyle | TV& Games CITYA.M. 7 JUNE 2011

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK


TERRESTRIAL
6pm BBC News 6pm Eggheads: Quiz show, 6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm BBC London News hosted by Dermot Murnaghan. 6.30pm ITV News 6.30pm Hollyoaks 6.25pm OK! TV
7pm The One Show 6.30pm Britain’s Empty Homes 7pm Emmerdale 7pm Channel 4 News 6.55pm 5 News
7.30pm EastEnders: BBC News 7pm Britain’s Secret Seas: 7.30pm Animal Kingdom 7.55pm 4thought.tv 7pm Cricket
8pm Holby City: Marine life off Britain’s east 8pm Countrywise: Paul Heiney 8pm Four Rooms 8pm Supersize Grime: 5 News
9pm Junior Doctors: Your Life coast. travels to the Chilterns in 9pm CHOICE The Fairy at 9
in Their Hands 8pm Springwatch 2011: An south-east England. Jobmother 9pm CSI: Crime Scene
10pm BBC News update on the Skomer Island 9pm Injustice 10pm Jamie’s Food Revolution Hits Investigation:
10.25pm Regional News puffins. 10pm ITV News at Ten Hollywood 11.05pm Misfits 10pm CSI: Miami
10.35pm Poor Kids: National 9pm CHOICE The Country 10.30pm London News 12.10am European Poker Tour 10.55pm CSI: Miami THE COUNTRY HOUSE REVEALED
Lottery Update House Revealed: Clandeboye 10.35pm FILM Falling Down:
1.10am FIM Superbike World 11.55pm CSI: Crime Scene BBC2, 9PM
11.35pm The Lock Up: Championship 1.40am Formula Investigation 12.50am Dan Cruickshank visits Clandeboye
Estate in Bangor, Co Down. Urban thriller, starring Michael
Weatherview 12.10am Children’s Ford Championship 2.05am The SuperCasino 4am The Family Estate in Bangor, Co Down, which
10pm Lead Balloon Douglas. 1993. Grid 2.35am KOTV Boxing Weekly
Craniofacial Surgery 1.10am Recipe 4.10am Michaela’s Wild has become a monument to the
Women, Weddings, War and Me 10.30pm Newsnight: Weather 12.40am The Zone; ITV News 3am Triathlon 3.25am FIVB Beach Challenge 4.35am Michaela’s Wild British Empire.
2.10am DIY SOS: The Big Build 11.20pm D-Day to Berlin Headlines Volleyball 4.20am Catching the Challenge 4.55am County Secrets
3.10am Great British Railway 12.20am BBC News 2.45am Crossing Jordan Impossible 5.15am-6.10am Full 5.10am Wildlife SOS 5.35am-6am
Journeys 3.40am-6am BBC News 3.40am-6am Close 3.30am-5.30am ITV Nightscreen Metal Challenge House Doctor

SKY SPORTS 1 BRITISH EUROSPORT Criminal Minds 12am CSI: Crime HISTORY 9pm I Didn’t Know I Was
SATELLITE & CABLE

7pm Sky Sports News at Seven 12.15pm Live ATP Tennis 8.15pm Scene Investigation 1.50am 7pm Heir Hunters 8pm American Pregnant: A woman suffers
7.30pm Live International ATP Tennis 10.15pm Cycling Ghost Whisperer 3.30am Pickers 9pm Treasure from the abdominal cramps on a boat.
Charmed 4.20am Nothing to Dark Ages 10pm Mud Men 11pm 10pm I’m Pregnant and a
Football: Republic of Ireland v 11.15pm Tennis: Mats Point
Declare 5.10am-6am Maury How London Was Built 12am Hoarder: A woman tries to clear
Italy (Kick-off 7.45pm). 10pm 11.45pm Inside WTCC
How Britain Was Built 1am her clutter before giving birth.
Test Cricket 12am International 12.15am-12.45am Le Mans 24
BBC THREE 10.30pm I’m Pregnant and HIV THE FAIRY JOBMOTHER
Football 1.30am The Sky Sports Minutes Ancients Behaving Badly 2am CHANNEL4, 9PM
7pm Total Wipeout 8pm The Positive 11pm Trauma Unit 12am
Years 2.30am Test Cricket Britain’s Lost Mega-Fortress 3am New series. Hayley Taylor embarks on
World’s Strictest Parents 9pm
4.30am The Sky Sports Years ESPN Our War 10.10pm EastEnders
Heir Hunters 4am The Universe I Didn’t Know I Was Pregnant
1am I’m Pregnant and a Hoarder another job-seeking campaign that
5.30am-6am Football Asia 7pm Live International Football 5am-6am Ax Men takes her to four of the UK’s
10.40pm Angry Boys 11.40pm 1.30am I’m Pregnant and HIV
9pm International Football Family Guy 12.25am Our War DISCOVERY Positive 2am Trauma Unit 3am unemployment hotspots.
SKY SPORTS 2 10.45pm ESPN Kicks: Extra 1.35am Angry Boys 2.35am The Little People, Big World 4am A
7pm European Seniors Tour Golf 11pm Planet Speed 11.30pm AFL 8pm How It’s Made 9pm Gold
World’s Strictest Parents 3.35am Baby Story 5am-6am Bringing
8pm Live Prizefighter Boxing Review Show 12.30am ESPN Rush 10pm Deadliest Catch
Two Pints Out-Takes Home Baby
11pm Poker 1am Prizefighter Press Pass 1am NBA Action 11pm Flying Wild Alaska 12am
4.05am-5.05am Total Wipeout
Bear Grylls: Born Survivor 1am
Boxing 4am Football Asia 1.30am Live NBA Countdown
Gold Rush 2am Deadliest Catch
SKY1
4.30am-5am Football’s Greatest 2am Live NBA Basketball 5am E4 3.50am Future Weapons
8pm Road Wars 9pm FILM
Planet Speed 5.30am-6am ICC 7pm Hollyoaks 7.30pm Friends Planet of the Apes 2001.
SKY SPORTS 3 Cricket World Magazine 9pm Smallville 10pm Cleveland
4.40am Nasa’s Greatest Missions
11.20pm Brit Cops: Frontline
7pm Edinburgh Marathon 5.30am-6am Destroyed in
Show 10.30pm Ricky Gervais Crime UK 12.20am Fringe
Festival 2011 8pm Test Cricket SKY LIVING Show 11.30pm Bob’s Burgers
Seconds
1.20am Night Cops 2.10am SUPERSIZE GRIME
10pm Golfing World 11pm Ladies 7pm CSI: Crime Scene 12am The Big Bang Theory 1am Stargate Atlantis 3.40am CHANNEL5, 8PM
European Tour Golf 12am Investigation 8pm Cougar Town How I Met Your Mother 1.45am
DISCOVERY HOME & Myths, Magic and Monsters A team cleans Twickenham Stadium
Superleague Netball 2am 8.30pm Hot in Cleveland 9pm My Name Is Earl 2.30am Ugly HEALTH 4.30am Airline 4.55am Bite Size following a Calcutta Cup tie
International Bowls 4am-5am Dating in the Dark 10pm Four Betty 3.15am Privileged 3.55am 7pm Bringing Home Baby Brainiac 5.10am-6am Don’t between England and Scotland.
FIA GT1 World Championship Weddings Revisited 11pm Reaper 4.40am-6am Switched 8pm Little People, Big World Forget the Lyrics Narrated by Neil Morrissey.

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

QUICK CROSSWORD
   

SUDOKU KAKURO
38 21 27 15 10 30 
5 11 16
16 8   
34 9
Place the numbers from 1 to 9 in each empty cell so that each 15
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 45
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 13 7 8
   
above or to the left of it. 12 11
You can only use the digits 1-9 10 17  
 and you must not use the
28 39 22
29 11  
same digit twice in a block. 35
     The same digit may occur 15 13 
24 13 10
  more than once in a row or
column, but it must be in a
12
20
21
3
7
  
45
  separate block.
23 16
  4 10 16
 

    ACROSS DOWN
1 Upstanding or 1 Intimation of

    WORDWHEEL M A
highborn (5)
3 Labours (5)
dismissal (6)
2 Allow (3)
Using only the letters in the Wordwheel, you have 7 Walk silently (6) 4 Eight singers who
  ten minutes to find as many words as possible,
G B 9 Type of sousaphone (4) perform together (5)
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters O 10 Severely punished or
reprimanded (10)
5 Long-necked bird (4)
6 Large, old, luminous
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N R 14 Tip of an ink pen (3) stars (3,6)

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


O E 16 Document signed by
King John in 1215 (5,5)
8 Civil or military
authority in Turkey (5)
QUICK CROSSWORD 5 9 8 9 7 9 19 Manufacturer of 11 Hostelry (3)

M E A N T A B A S E
2 3 6 8 9 7 1 5 4 SUDOKU          popular toy bricks (4) 12 The alphabet (inits) (3)
1 2 1 7 3 2
A P R R P
4 8 9 8 5 9
         20 Chatter (6) 13 White heron (5)
N A R R O W I D O L         
G O V O O D O O 7 8 1 5 2 9
        
22 Drying cloth (5) 15 Warning or proviso (6)
L A N C E R G E R M 1 4 2 3 9 6 8 5 7
23 Gush (5) 17 Item worn on
WORDWHEEL
E O S E A         
8 9 1 7 2 1
D A W N T A S S E L
1 6 2 9 8 3
         the hand (5)
R A N G E R I M         
L O D E D E B R I S
9 7 6 8 3 1 The nine-letter word was 18 Level (4)
M C N E E 9 6 8 5 1 3 7 4 2         
B A S T E A N N O Y 4 1 4 3 4 6
AMPERSAND          21 Pinnacle (3)
Lifestyle MOTOREXPO 25
LONDON
SEE TOMORROW’S
NEWSPAPER

Why there may


be no escaping Barbershop
the cyber war
Quartet: Four
GEEK
SPEAK
@steve_dinneen slick groomers
Traditional grooming
T
he cyber war has begun. Sony has been ning a special Father & Son package in
repeatedly punched in the face by hack- light of Father’s Day (Sunday 19 June). This
ers and now President Barack Obama
says any more attempts to pry into the
services are ramping includes a history and demo of wet shav-
ing, a complimentary wet shave for both,
emails of his staff will be treated as an act of
military aggression. (At this stage it’s proba- up in London, just in a gift bag full of skincare goodies, a guid-
ed tour of No 1 Savile Row and a Bloody
bly best to ignore the fact that the US’ track
record of declaring war on intangible things – time for Father’s Day, Mary, all for £140 per pair.
Gentlemen’s Tonic isn’t the only groom-
terror, drugs – have, with the best will in the
world, met with limited success.) says Timothy Barber ing venue taking note of Father’s Day.
Murdock, the groovy barbershop mini-
The number one fear is that hackers could empire that a few months ago added a
hit financial markets or transport and power flagship parlour in Covent Garden to

I
hubs, reducing us to cowering animals, gath- t stands to reason that if you’re going shops in Mayfair, Liberty’s and Shoreditch,
ering around a bonfire in the silent, deserted to sport one of the finest suits money also has a father-son package throughout Barbershop seats await you at Gentleman’s Tonic in Gieves and Hawkes
wastelands of our former cities. can buy, you’ll want the rest of your June: make an appointment for a wet-
And we don’t have long. According to one appearance to be up to scratch as shave together, and one of them will be
doom-mongering report, experts suspect well. half price – that’s £65 all in, and includes
Chinese hackers are capable of “reducing To that end, in a recent revamp of its No a couple of drams of whisky.
Britain to stone-age conditions at the press 1 Savile Row premises, tailoring giant There’s also Father’s Day action from
of a button”. Stone age. At the press of a but- Gieves & Hawkes has become host to one Carmelo Guastella, the men’s grooming
ton. Now foreign intelligence agencies can of the more splendid places a chap can get expert who has opened his plush new
not only peer into your Gmail account but a haircut and a shave in London. What Melogy salon at the St Pancras
destroy your metal tools, judicial system and was formerly a rather unsatisfactory Renaissance Hotel. The gift package for
knowledge of geometry. side corridor housing the morning lucky dads includes a haircut
With technological foes so immeasurably suits collection has been reborn and consultation, a shave, a
superior, there is no point running. All is lost. under the auspices of grooming spe- gift set of luxe shaving prod-
It’s time to bid a tearful farewell to your iPad cialist Gentlemen’s Tonic, which ucts and a glass of bubbly, for
and throw yourself under a train before the also has premises in Mayfair and £60.
entire rail network comes screeching to a Selfridges. Each old-fashioned, lux- Meanwhile, West London
final, deathly stand-still. uriously-proportioned barbers’ dads who don’t fancy the trip
Right now, somewhere in the bowels of chair has its own cubical, which into the centre of town can
the Pentagon, a team of scientists is probably comes complete with an LCD TV always drop into Carter & Bond
crafting an army of virtual warriors to beam to watch while you have your on Westbourne Park Road. The
through cyber space, draped in virtual stars coiffure coiffed and your face charming emporium of strange
and stripes, to fight the final battle with our massage and shaved. Haircuts and marvellous grooming prod-
invisible enemies. None of which is good start from around £48, while ucts (not to mention vintage
news for tech geeks. Anyone with a smart- wet shaves are £35, or get both posters, boys toys, watches,
phone will soon be viewed with suspicion and for £72. Commando comics and other fun
those with a laptop will be shot on sight, Alternatively, take along stuff) is now offering its terrifically
through the eye, just for fun. My days of your old man for a bit of relaxing in-shop barbering service
reviewing anything more high-tech than a bonding over the finer from Wednesdays through to
coffee machine will be long gone. Next week points of shaving – the thing Sundays, from £30. For beardier dad-
I’m featuring the latest edition of the we’re all taught by our dads dies there’s also its intriguing new
iAbacus (with new easy-to-slide beads). and mostly taught badly. Dude No. 1 Beard Oil (left, £50.)
Or, on the other hand, perhaps the threat For the next three Sundays Info: www.gentlemenstonic.com, www.mur-
of a cyber attack – real and worrying as it Gentlemen’s Tonic at docklondon.com, www.carterandbond.com
is – has just been blown out of all proportion. Gieves & Hawkes is run- www.melogy.com
Sport
26

HARTSON: YOUNG BOSS


BETTER FOR WEST HAM
Olympic champion Bolt Picture: GETTY
Ex- Hammers striker insists club should have hired
an up-and-coming manager instead of Allardyce
Over half of just think: West Ham, it’s a new start

EXCLUSIVE in the Championship, there’s no

applicants
BY FRANK DALLERES guarantee under Sam they’re going
to go up first time around, so why
FORMER West Ham star John not give somebody a chance?
Hartson believes the east London “They gave Gianfranco Zola his

left ticketless
club have made a mistake in appoint- opportunity. He did fairly well there.
ing Sam Allardyce as boss, insisting OK, he got one or two signings wrong
they should have put their faith in a but most managers can bring up a
young up-and-coming manager. few of those over the years. He did
Barcelona gambled on the inexpe- better than Avram Grant.”
rienced Pep Guardiola three years Hartson, who is visiting the City

OLYMPICS ago and have swept the board since, today to sign copies of his book, cites
BY JAMES GOLDMAN while Porto have reaped the rewards Mark Hughes and Roberto Martinez
of hiring rookie Andre Villas Boas. as examples of young managers who
MORE than half of those sports fans Hartson insists he is a fan of have proven they can succeed where
who applied for Olympic tickets were Allardyce, 56, but believes recently their more experienced peers fail.
left empty-handed after the opening relegated West Ham – and other “Mark Hughes was given a break at
ballot, it has emerged. clubs –ought to put more emphasis Wales, then he did very well at
Around 1.8m people attempted to on giving fresh coaching talent a Blackburn, then he went to Man City,
purchase the 6.6m tickets available to chance rather than turning to jour- and then Fulham. Sparky’s now
the general public but some 55 per neyman managers. being talked about at Chelsea,” he
cent missed out altogether. “I’ve got nothing against Big Sam – adds.
London 2012 organisers were keen I like him as a man and as a charac- “That was Mark’s big break.
to stress that those who had no joy ter, and I don’t think his record has Roberto Martinez started at Swansea,
first time around would be given pri- been bad. He hasn’t particularly then went to Wigan and now his
ority when the second ballot gets pulled up any trees but on the other stock is high. It’s like a player; if you
underway next month. hand he hasn’t been a disaster,” don’t give them a chance to join in
But there are no tickets remaining Hartson (right) told City A.M. and mix with the senior side, how
for the opening and closing cere- “But what rankles with me is on earth do you know how well
monies nor any of the athletics finals, Allardyce – and Peter Reid, they’ll do?”
featuring sprint king Usain Bolt. Micky Adams, Iain Dowie – Former Blackburn, Newcastle
A London 2012 spokesman said: they’ve had five or six and Bolton manager Allardyce
“Those who were unsuccessful in the jobs, they’ve made last week signed a two-year
initial process will have priority in the their money, contract to succeed
next round and they will be contacted they’re all multi- Grant, who was sacked
soon to inform them about next steps. millionaires. last month.
“There are still plenty of tickets There’s too John Hartson will
available to see great Olympic sport much talk about be at Waterstones,
across all price points.” giving young Leadenhall
Brits will, however, have a window managers a Market today
of opportunity to purchase tickets for chance. Why from 12 noon
the showpiece events on a first-come, don’t West until 1:30pm Allardyce took
first-served basis via Eventeam, official Ham give signing copies of over at West
ticket reseller for France. Julian Dicks his book Please Ham last week
Eventeam marketing director a chance? Don’t Go, which is
Benoit Vincent said: “We have had a “Those four or five man- now out in paper- Picture: PA
lot of interest from the UK. We can sell agers have had six or seven back through
to anybody interested in Britain.” jobs each in their careers. I Mainstream.

Ancelotti disappoints suitors by taking Federer prioritises winning


one-year sabbatical from management back his Wimbledon title
insists he is content to spend a year
Hiddink looks like

FOOTBALL

TENNIS
BY FRANK DALLERES away from the touchline. Federer’s least favourite surface, his
“I am in no hurry to coach and I BY JAMES GOLDMAN attacking game is perfectly suited to
FORMER Chelsea manager Carlo
Ancelotti has quashed talk of
don’t need to. I have not been
contacted by any club in
Chelsea’s new boss BEATEN French Open finalist Roger
Federer is relishing the start of the
grass and he is intent on regaining
the trophy he last won in 2009.
succeeding Gerard Houllier at England and I have not spoken grass court season and is focussed Federer (left), who last night
Aston Villa by announcing he to Roma. It is all fantasy,” said BOOKMAKERS last night suspended on equalling Pete Sampras’ pulled out of the pre-
intends to take a sabbatical. Ancelotti. betting on Guus Hiddink succeeding record of seven Wimbledon Wimbledon event at Halle,
The Italian (right) had “I have enjoyed this expe- Carlo Ancelotti as Chelsea’s new man- titles. said: “The huge priority
been tipped to move to the rience [of coaching in ager. The Turkish Football Federation The Swiss ace looked right now is to win
Midlands and has also been England]. I will return to have denied they have agreed terms back to somewhere near Wimbledon. That’s always
linked with QPR, Fulham London to organise my life. for the departure of the Dutchman, his best at Roland Garros the No1 goal in the season.
and Roma since being sacked Besides a six-month break, who is contracted until after next sum- –the highlight being his “This is where it all
by the Blues on the final day I have been coaching non- mer’s European Championships, but it semi-final victory over started for me back in
of last season. stop since 1995. looks increasingly likely that the 64- Novak Djokovic – where he 2003, or even with [the
But the 51-year-old, who “I will take a year off and year-old will return for his second spell made it to his first grand fourth-round win over]
has trumpeted his desire to look around, study how my at the Stamford Bridge helm. slam final since January 2010. Sampras in 2001. That’s why I
coach again in England, colleagues work.” While clay has always been always really enjoy coming back.”
27

Ghosts of Cardiff may return SPORT | IN BRIEF

to haunt Sri Lanka, says Finn


Rebels end Cipriani suspension
RUGBY UNION: The Melbourne Rebels
have lifted Danny Cipriani’s suspension
and the fly-half will be available for their
Super 15 game against the Brumbies on
Friday. Cipriani, 23, has spent a month
on the sidelines after breaching the

CRICKET Rebels’ disciplinary code.


BY JAMES GOLDMAN
Brien killed at Isle of Man TT
ENGLAND fast bowler Steven Finn MOTORSPORT: Irish rider Derek Brien

Westfield emerge has warned Sri Lanka’s batsmen they


are likely face another awkward bat-
tle for survival on the final day of the
has been killed in an accident at the Isle
of Man TT. The county Meath man, 34,
crashed on the first lap of yesterday’s
as favourites to be second Test at Lord’s.
With memories of their fifth day
opening Supersport event, which led to
the race being halted.

stadium sponsors capitulation at Cardiff still fresh in


their minds, Sri Lanka will be con-
cerned at the prospect of having to
Windies miss out on Lord’s Test
CRICKET: The West Indies will miss out
bat out potentially as much as a ses- on the opportunity to play a Test at
SHOPPING centre giant Westfield has sion-and-a-half after England domi- Lord’s next summer. The Windies will
emerged as the favourite to strike a nated yesterday’s play. play Tests at Edgbaston, Trent Bridge
deal with West Ham and take naming Finn ended with figures of 4-118, in and Cardiff in 2012 after Lord’s owners
rights to the Olympic Stadium. the process becoming the youngest Marylebone Cricket Club were outbid.
It is understood that informal talks England bowler to reach 50 Test wick- “We were expecting to have a West
have been held that could see the ets, before Alastair Cook and Indies Test in May or June,” said John
arena renamed the Westfield Stadium Jonathan Trott batted his side into a Stephenson, the MCC’s head of cricket.
when the Hammers move there after position of almost total control. “That Test match has gone to Cardiff.”
the London 2012 Games. “We’ve fought back in this game The MCC makes a profit of around
In return the cash-strapped club fantastically well, incredibly well £1.5m from a successful Test match –
could expect to receive millions of from the position we were in at the the organisation posted a loss of £2.4m
pounds, helping fund the £100m cost end of the second day,” said the 22- in 2010.
of relocating from Upton Park to year-old.
Stratford and converting the stadium. “We’re in a great position to push Opera star to advise Blatter
West Ham have made clear that on tomorrow. We’re not looking FOOTBALL: Sepp Blatter has
they intend to sell naming rights, with beyond that first hour, but we’ll look announced that Spanish opera singer
vice-chairman Karren Brady telling to consolidate in the first hour and Placido Domingo is his choice to advise
City A.M. last year: “If we did move we push on from there. FIFA on their ongoing problems.
would most certainly be looking for a “We hope it will stay overcast, and Domingo will join 88-year-old former
stadium sponsor.” there will be enough in the wicket. If US secretary of state Henry Kissinger
Westfield already have close links we get a go at them tomorrow, there and ex-Holland international Johann
with the club, having advised on plan- will definitely be enough pressure on Cruyff as Fifa’s advisers.
ning, design and construction for their them – and enough doubt in their
bid for the Olympic Stadium, in which
they saw off a rival proposal from
Tottenham.
mind to spread some fear, we hope.”
England started the day fearing
they would have to contend with a
Results
The retail group have already com- large first innings deficit but they :I@:B<K
mitted to a large presence in Stratford took the remaining seven Sri Lankan J<:FE;EGFN<IK<JKD8K:?
by building a £1.5bn shopping mall on wickets for just 107 runs. <e^cXe[mJi`CXebX;Xp+f],
the fringes of the Olympic Park. The tourists were eventually Finn became the youngest England bowler to reach 50 Test wickets Picture: GETTY CFI;ËJ1<e^cXe[c\X[Ji`CXebXYp(,-ilejn`k_\`^_kj\Z$
West Ham and Westfield declined bowled out for 479, seven adrift of fe[$`ee`e^jn`Zb\kj`e_Xe[
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while some formalities of taking over was out LBW to the second ball of his leave England on 149-2 and 156 He said: “Sri Lanka batsmen are Fm\ie`^_k*.)$*
the ground remained incomplete. side’s response. ahead. allowed to play well. Dilshan played ;AXpXnXi[\e\Z:ffbY=`ee%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%+0
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Construction Enquirer. failure behind him with a relatively formance on Sunday. well. We don’t dwell on negatives, on LN\c\^\[XiXZ9ifX[YJnXee%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%-
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convert from 80,000 to 60,000 seats, the left-arm spinner Rangan Herath, emerged stronger for their public “We go back to where we were in =Xcc1)'.#)//#*.'#*0+#*0+#+'0#+--#+.)#+.)%
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ankle injury could force him to miss Iljj`Xm:Xd\iffe-%*' %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
the tournament. Jflk_Bfi\Xm>_XeX()effe %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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to his right ankle in third round of <lifg\Xe:_Xdg`fej_`gHlXc`]p`e^>iflg8
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the French Open and has been on >iflg:
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yesterday effects. >iflg<
On day one at Queen’s there were JXeDXi`efm?le^Xip.%*' %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
Pic: ACTION wins for defending champions Sam Jn\[\em=`ecXe[.gd %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
IMAGES Querrey as well as seeds Ivan Ljubicic
and Michael Llodra. email sport@cityam.com
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